Survey Reveals Challenges with RFS Compliance
July 1, 2008 at 5:53 pm | Posted in Business Briefings | Leave a commentTags: Biodiesel, Biomass, Clayton, Clayton McMartin, Compliance Report, Diesel, EPA, Ethanol, Fuel, Gasoline, McMartin, Policy Act, Refueling America, Regulations, Renewable Fuel Credits, Renewable Fuel Registry, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, RINSTAR
Survey Indicates that 81% of Renewable Fuel Suppliers are Out of Compliance
Author: Clayton McMartin
EPA issued a guidance document pertaining to Improper and Illegal RIN Trading Practices on June 26, 2008. In this document they addressed 3 different situations pertaining to improper and illegal RIN trading practices. I would like to take a few minutes and provide you with some specific insight into Situation No. 3. In particular let’s spend a few minutes investigating the issue of transmitting ownership of assigned RINs on the same day as the transfer of title to the renewable fuel product.
To give you an idea of how widespread this problem is, consider the following graph:
The guidance document states that:
The regulations also require that assigned RINs must be recorded on the PTD used to transfer ownership of the fuel or on a separate document that is transferred to the same party on the same day as the PTD used to transfer ownership of the fuel. The regulations are clear with regard to this issue. See §80.1128(a)(7); Q&As 9.7 and 9.12.
The data comprising the pie graph was collected during one of our RINSTAR sponsored Web Seminars on January 17, 2008. 134 individual companies were in attendance and participated in the anonymous polling to this question – “What Percentage of RIN Transfers do you Receive on the Same Day as Your PTD?”. Only 19% indicated that they received data in a timely manner.
What is even more enlightening is the fact that the very same question was asked of essentially the same group of participants during our October 2007 Webinar, with those results showing that 39% of participants were receiving their data in a timely manner. That is a relative drop of 50%, which is exactly contrary to what one would hope for. It would seem that with benefit of experience this practice would have improved with time, instead it appears to have worsened.
Apparently EPA sees this as a big enough issue now to step in and render an official opinion through the guidance documents. This is certainly a step in the right direction when it comes to improving efficiencies throughout the supply chain. Now the big question – Are fines in the near future?
What are your thoughts? Do you think EPA will start issuing fines? How will this impact your business?
What is the RFS – Article No. 1 EBS
June 30, 2008 at 2:06 am | Posted in Educational Briefing Series | Leave a commentTags: Biodiesel, Biomass, Clayton, Compliance Report, Diesel, EPA, Ethanol, Fuel, Gasoline, McMartin, Policy Act, Refueling America, Regulations, Renewable Fuel Credits, Renewable Fuel Registry, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, RINSTAR
What is the RFS?
Author: Clayton McMartin
The RFS is the Nation’s Renewable Fuel Standard. The RFS was established as a result of the 2005 Energy Policy Act (EPACT) and went into effect on September 1, 2007. Fundamental to the RFS is the mandated use of renewable fuels, such as ethanol and biodiesel, across all of the United States .
The first year of the RFS required that a minimum of 4.7 billion gallons of renewable fuel, prorated to the months September through December, be blended into the Nation’s on-road gasoline and diesel fuels. The actual RFS is expressed as a percentage, based upon the American motorist’s fuel use in any given year. In 2007 the RFS value was 4.02% of the nation’s total on-road gasoline consumption. Working together with the Department of Energy, EPA is required to calculate and publish the RFS by November 30th of each preceding year.
A new RFS, known as RFS2, was enacted into law beginning in 2008 with the 2007 Energy Independence and Security Act (EISA), and signed by President Bush on December 19, 2007. The New RFS2 nearly doubles the 2008 value to 7.76%, or 9.0 BGY, and increases the mandated volume on an increasing schedule to 36 billion gallons per year by 2022. The rule making process is underway now with EPA, and according to the present schedule the final rule for RFS2 is required by December 19, 2008 and will be effective January 1st of 2009.
In our next article we will investigate the renewable identification number, also known as the RIN. For additional information about the nation’s renewable fuel registry, visit www.RINregister.com or call (575) 377-3369.
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