EPA seeks input on RIN quality assurance plan ICR

By Erin Voegele | June 05, 2015

The U.S. EPA recently published a notice in the Federal Register soliciting public comments on a proposed information collection request (ICR) related to the voluntary renewable identification number (RIN) quality assurance program under the renewable fuels standard (RFS).

The notice explains that obligated parties demonstrate compliance with the RS through the acquisition of RINs assigned by the biofuel producer or importer to every batch of renewable fuel produced or imported. Validly generated RINs show that a certain volume of qualifying renewable fuel was produced or imported. The notice also indicates the RFS program includes provisions stipulating the conditions under which RINs are invalid, the liability carried by a party that transfers or uses an invalid RIN, and how invalid RINs must be treated.

“The RIN system within the RFS program contains unique features that make it somewhat challenging for the obligated parties that need RINs for compliance purposes to verify that those RINs have been validly generated,” said the EPA in the notice. “Several cases of fraudulently generated RINs have compelled some obligated parties to limit their business relationships to only those parties that appear most trustworthy. This reaction by the obligated parties made it more difficult for smaller renewable fuel producers to sell their RINs and reduced the overall liquidity of the RIN market. To ensure that RINs are validly generated, individual obligated parties are now conducting their own audits of renewable fuel production facilities, potentially duplicating one another's efforts. These circumstances have created inefficiencies in the RIN market, prompting requests for an additional regulatory mechanism that would reduce the risk of potentially invalid RINs, return liquidity to the RIN market, and reduce the cost of verifying the validity of RINs.”

The notice goes on to note that the regulation would allow EPA to monitor compliance with the RFS program and the quality assurance program would help to ensure that the RIN program operates as originally intended. “The primary impacts of the quality assurance program would be improved liquidity in the RIN market and improved opportunities for smaller renewable fuel producers to sell their RINs,” the EPA continued. “The data generated by the QAP program will assist obligated parties and smaller renewable fuel producers comply with the requirements of the RFS program by supporting the validity of RINs. This regulation will allow regulated parties to voluntary submit Quality Assurance Plans (QAPs) to EPA to demonstrate the validity of the RINs they generate. This is a new collection with no industry cost for comparison.”

An ICR is currently approved through Dec. 31 2017. The EPA notice relates to a proposed extension. The EPA is soliciting public comments on the before submitting the ICR to the Office of Management and Budget. According to the EPA, it will consider the comments received and amend the ICR appropriately before submitting it to OMB for review and approval. At that time, the EPA will issue another Federal Register notice announcing the opportunity to submit additional comments to OMB.

Comments are due July 27. Additional information on the ICR and specific areas in which the EPA is seeking public input is available on the Federal Register website.