RINs improved as part of RFS2

By Holly Jessen
Posted February 18, 2010, at 4:45 p.m. CST

RINs improved as part of RFS2
By Holly Jessen

Posted Feb. 18, 2010

The U.S. EPA has come up with a new system for renewable identification number (RINs) that should be easier to use as well as cut down on the possibility of human error. A group of hearty conference-goers learned about RINs during a 7 a.m. sunrise session Feb. 17 at the National Ethanol Conference in Florida. "This is very important for this industry," said Jim Redding, vice president of industry relations for the Renewable Fuels Association. "I think it will simplify the process."

Tony Miller, an EPA chemical engineer, laid out the new, and hopefully improved, EPA Moderated Transaction System (EMTS), a Web-based reporting system. It will be used to generate, sell, buy, separate or retire RINs under the renewable fuels standard final rule (RFS2) released in early February. With RFS1, "a RIN was a RIN was a RIN," Miller said. The new system will track advanced biofuels, cellulosic ethanol, biomass-based diesel and renewable fuels.

One change is that all transactions must be submitted within five business days, rather than three business days. In addition, the new system will be easier to use and provide more readable information. "(There will be) a little bit more at your fingertips," he said.

Under RFS1, screening or trading RINs involved a 38-digit number that was often a headache. Now, that number is no more. "There were many issues with handling 38-digit RINs," Miller said.

RFS2 won't officially go into effect until July 1, which means RINs1 will continue to be traded. However, Miller and other presenters repeatedly urged ethanol producers to sign up early to test EMTS, the transaction system for RINs2. At the latest, producers must be registered for the new system 60 days prior to production of fuel or by July 1. "Please try to register as early as possible," he said. "Make sure you're not waiting until the last minute."

EMTS has internal quality assurance checks that will give users instant feedback, Miller said. If an error is made, the system will notify the user and won't move on until the error is corrected. With RINs1, there was no indication that anything was wrong until the EPA called.

Kelly O'Farrell, supervisor of RIN compliance for Minnesota-based Christianson & Associates, said the company was analyzing RFS2 and how it would impact their clients as they transition from RFS1 to RFS2. O'Farrell was hopeful that the new transaction system could help reduce human error common with the old system. "There was a need for something to be done," she said.

For Christianson & Associates clients, there was no improvement with errors associated with RINs from 2008 to 2009. In fact, in some cases the problems got worse, not better, she said. There were many cases where production numbers didn't match the RIN. The 38-digit number sometimes had numbers transposed, had an extra number or was a duplicate number. "No more, whoops, I sent you a wrong RIN number, please send it back," she said.

Another change is that EMTS will generate quarterly reports, rather than requiring the regulated party to produce those reports, Miller said. Those reports will still have to be examined for possible mistakes and certified as accurate. "Hopefully, they will be a little more accurate from the start," O'Farrell said.

Those already using RINs1 can register for RINs2 and begin testing in 24 to 72 hours, Miller said. Those not registered can also do pretesting but the process to get them registered will take longer. All parties must register for EMTS, regardless if they are currently registered for RINs1, as there is no import mechanism for the old system to the new.

O'Farrell also encouraged ethanol producers to get registered for ETMS and learn the new system as early as possible. "A set up from the beginning is going to work for you in the end," she said.

To ask questions or to register, e-mail [email protected] or call (202) 343-9755.