RFS2 White Paper Now Available

The Energy Independence and Security Act of 2007 (EISA) mandated the use of renewable fuels from four different categories of fuels, each with their own standard, and each based on a performance threshold measured in terms of Greenhouse Gas (GHG) reductions. The RFS2 regulations contain the rules that industry will abide by in meeting these requirements. This new White Paper will help you make sense of it all.

RINSTAR® Members should review this paper before our next Webinar

Download RFS2 White Paper

To say the RFS2 rule is complex would be a huge understatement. In reality this rule is much more complex than RFS1. Recognizing this, and the fact that thousands of companies throughout the industry will need to understand how the new rules impact their businesses, I teamed up with Graham Noyes from the law firm Stoel Rives to collaborate on this White Paper. The title of the paper is America Advances to Performance Based Biofuels - The Advanced Renewable Fuel Standard / RFS2. And here is the best part; we are presently making it available to you for FREE. All you need to do is sign up in the space provide on this page. Once you sign up you will receive an e-mail in your inbox with a link to download the document. We all have a lot of ground to cover between now and July 1, 2010 and I just thought it would be a good idea to share some of this basic foundational work with you. If you have questions or if we can be of assistance with your own efforts, please let me know. It would also be great to learn where you heard about the White Paper - so take a second and leave a comment and let me know where you heard about it and what you think.

Tags: , , , , ,

EPA Feedback Survey

Tags: , , , , ,

Stakeholder Survey Results

To following graphs summarize the results from a recent stakeholder feedback survey.  These results are being shared with EPA in an effort to assist with proposed changes to the Renewable Fuel Standard.

Let EPA know what you think!

Need More Details?
Complete Details Are Available Here!

Let EPA know what you think!

Tags: , , , , , ,

Introducing RFS2 Video Updates

Have a look at this short video to learn more about what we are doing at RINSTAR® to prepare for the New Advance Renewable Fuel Stanard (RFS2). You might want to also want to get a copy of “America Advances to Performance Based Fuels” White Paper in order to establish a good overall understanding of the program.

Tags: , , , ,

New RIN Certificate™

The New RFS2 program requires a number of modifications to existing business practices.  One of the most significant changes is in the area of product transfer documentation.   Literally thousands of companies throughout the renewable fuel supply chain receive RIN CertificatesTM from their suppliers operating on RINSTAR®.  Recognizing how important it is that your business operations not be hindered by regulatory changes, we are introducing the new RIN CertificatesTM to the market place well in advance of the July 1 effective date for RFS2.  The video above provides you with the information you and your counterparties need to understand as we all prepare for RFS2.

BTW - the video can be viewed full screen by selecting the appropriate button on the player menu bar.

Tags: , , , , ,

RFS2 Workshop in Iowa

The Iowa Renewable Fuels Association is co-hosting a workshop on RFS2 along with the National Biodiesel Board, the Renewable Fuels Association, Growth Energy, and the American Coalition for Ethanol on April 6th in Des Moines Iowa. I have been invited to present on the subject of RINs and the transition to the new EMTS database. Two EPA representatives will be present, along with industry experts to answer questions about RFS2 and the transition that is currently underway.

View a copy of the agenda here:

The deadline for registration is Friday, April 2. The form is available here:

If you are in Iowa at the conference, be sure an look me up.

Tags: , , , , ,

Educational Series: A Recap of the RFS & RINS

RFS Educational Series Briefing No. 11: A Recap of the RFS & RINS

Written by Clayton McMartin for Televent DTN

Profitability of today’s fuel supplier is impacted by how well they understand the regulations that they operate within. Recognizing this, we have provided a series of briefings to help you better understand the regulatory arena you are operating in today, and that you face tomorrow.

Over the past several weeks we have covered several topics related to the renewable fuel standard (RFS) and the credit known as the Renewable Identification Number (RIN). In this wrap-up briefing we will recap the key points and hopefully tie many of these concepts and principals together, giving you a better understanding of how to profit from your new found knowledge.

In Briefing #1 we started with an explanation of what the renewable fuel standard (RFS) is and learned that it is a mandate for the use of renewable fuels.

Briefing #2 then explained the principal behind the 38-digit Renewable Identification Number (RIN) and the important information that can be found in those digits.

In Briefing #3 we started at the beginning of the supply chain to learn that RINs come from producers and importers of renewable fuels. We then focused our attention to the end of the supply chain in Briefing #4 to see how obligated parties would use RINs to satisfy their obligations.

Since in reality, renewable fuel often moves through numerous parties before reaching the end of the supply chain, we moved our attention in Briefing #5 to how RINs are tracked. We saw how the RIN is carried from one party to the next through the supply chain and how EPA utilizes this information to assure compliance.

Since RINs can exist in two different states, either assigned to physical fuel or separated from fuel, we covered this important subject in Briefing #6. We covered the criteria necessary to separate RINs from the fuel and therefore make them a tradable paper credit.

In Briefing #7, Briefing #8 and Briefing #9 we focused more on the market for RINs, investigating who would want to own RINs for investment purposes, what vintage year RINs are valid and their limitations. And then we moved on finally to the market factors that influence RIN prices.

In our most recent Briefing #10, we took our first high level look at how the advanced renewable fuel standard (RFS2) came to be and how it will bring even more complexities and opportunities to those in the motor fuel industry.

As you recognized, the involvement of government in your business is becoming more prevalent with each coming year. Regulatory changes like we have seen with the renewable fuel standards present challenges but also opportunities for those who take the initiative to learn about the factors impacting their business. These fuel standards are a part of business today and will be well into the foreseeable future.

Click here to download a PDF of Educational Series Briefing No 11: A Recap of the RFS & RINS.

Past briefings are available by clicking here.

Tags: , , , , ,

Educational Series: The Proposed Advanced Fuel Standard (RFS2)

RFS Educational Series Briefing No. 10: The Proposed Advanced Fuel Standard

Written by Clayton McMartin for Televent DTN

Congress passed the Energy Independence and Security Act (EISA) in December of 2007 and as President Bush signed the ACT a new and advanced renewable fuel standard started what has turned out to be a long road to the marketplace. In fact, the regulatory process, where EPA codifies the Congressional Act into regulations, is over 2 years behind the deadline established through EISA.

The tardiness of the advance renewable fuel standard (RFS2) can be attributed to numerous factors, including such items as a Presidential election, special interest group lobbying, indirect land use assessments, and overall complexity of the new laws. Regardless of the delays, industry still anticipates an eventual RFS2 and will therefore need to be prepared for the changes.

The high level changes brought about by RFS2 when compared to the original RFS1 are:

  • Under RFS2 mandated volumes apply to both gasoline and diesel used in both on-road and off-road application in the United States. RFS1 obligations apply only to on-road gasoline.
  • RFS2 mandates increased dramatically over RFS1, 36 Billion by 2022 gallons/year vs. 7.5 BGY by 2012.
  • RFS2 provides for “carve outs” for specific fuel types, namely biodiesel and cellulosic biofuels.
  • RFS1 places a 15 BGY cap on the mandates for corn starch derived ethanol.
  • RFS2 addresses greenhouse gas (GHG) contribution by establishing four categories of fuels and requiring threshold performance requirements to be met. RFS1 did not address GHG reduction.
  • RFS2 places restrictions on land use in an attempt to address the food vs. fuel argument. These restrictions require renewable fuel producers to qualify their feedstocks each time they generate RINs.

This list represents the highest level of changes brought about by RFS2. Although not comprehensive, these basic changes should provide a good indication to the change in complexity that the industry faces as the legislators and the regulators become more involved with the daily business of transportation fuels.

To illustrate just one area of the new RFS2 program, consider the obligated party. You may recall from Briefing #4 How are RINs Used? that it is primarily refiners who would have a use for RINs. Under RFS2 there are 4 categories of renewable fuels, each with their own distinct RIN type. What this means to the obligated party is that they will now have to meet 4 different standards instead of just one renewable fuel standard as today. They will need to acquire and balance 4 different RIN types to be assured of compliance with the regulations. As you can see, the added degrees of freedom bring with them at least an order of magnitude in complexity.

Click here to download a PDF of Educational Series Briefing No 10: The Proposed Advanced Fuel Standard.

Past briefings are available by clicking here.

Tags: , , , , , ,

Educational Series: Market Factors Influencing RIN Values

RFS Educational Series Briefing No. 9: Market Factors Influencing RIN Values

Written by Clayton McMartin for Televent DTN

RIN values are affected by a number of factors, ranging from the current year’s mandate of renewable fuel to the level of overall confidence in the marketplace. The following would represent a partial list of contributing factors to the value of a RIN:

  • Transportation cost – The cost to transport ethanol and other biofuels play a key role in the overall RIN value.
  • RFS mandate – The mandated level of renewable fuel, the Renewable Fuel Standard, for the specific year establishes the demand and therefore influences price.
  • Waiver petitions and other uncertainties that await EPA’s ruling have proven to have a dramatic impact on RIN prices.
  • Vintage year – Current vintage year RINs will have more value than RINs from the prior year due to limitations on the use of prior year RINs.
  • Blending Margins – The net economic margin considering petroleum product price, biofuel price, and other blending tax credits has a direct impact on the availability of RINs and consequently the price.
  • RIN failures – Invalid RINs in the market place result in oversupply of RINs and consequently drive the price of RINs down and with it the demand for physical product.
  • Deadlines – The year end deadline and the overall readiness by industry can result in last hour panic and a resulting price increase.

Since the inception of the RFS program, RIN prices have seen a dramatic increase from when RIN trading originally started on Sept. 1, 2007. RIN credits originally traded at 0.25 cents each – primarily because industry did not initially understand the program. RINs have since traded for over 25 cents each, a multiple of 100 times.

FUTURE VIEW: With the impending RFS2 regulations, there will be several types of RINs in the marketplace – each trading at a different price point and in some cases driven by technology specific issues. These future RIN values will be based upon similar factors as described above and as they apply to a specific type of RIN. For example cellulosic RINs (Type C RINs) will have a different value than RINs derived from say corn ethanol (Type R RINs – also known as renewable fuel RINs), due to their availability in the market place.

In fact, due to a special consideration in the 2007 Energy Independence and Security Act (EISA), RINs derived from cellulosic biofuels (Type C RINs), bring a new twist to RIN values. Type C RINs will have a floor price of not less than 25 cents per RIN, and possibly more depending upon the rack price of gasoline in any given year. This is a subject we will explore more in future briefings.

Click here to download a PDF of Educational Series Briefing No 9: Market Factors Influencing RIN Values.

Past briefings are available by clicking here.

Tags: , , , , , ,

Educational Series: What is the Lifetime of a RIN?

RFS Educational Series Briefing No. 8: What is the Lifetime of a RIN?

Written by Clayton McMartin for Televent DTN

A RIN is generated whenever renewable fuel is produced or imported into the United States, as we discussed in Briefing No. 3 in this Educational Series. Established within the RIN is a vintage year at the time that it is generated. The vintage year is embedded in the RIN number at the time it is produced and can be found in digits two through five. As an example consider the following RIN number:


In this example the RIN has a vintage year of 2008.

According to the regulations a RIN can be used to demonstrate compliance in the year in which it was generated or the year that follows its year of generation. In the case of our example, this 2008 vintage year RIN could be applied to an obligated party’s 2008 obligation or to their 2009 compliance year obligation.

Although a RIN having a vintage year of one year earlier than the current compliance year can be used to demonstrate compliance, there remains a volumetric limitation. This limitation is addressed in Section 80.1127 of the RFS regulations and states that RINs submitted from the prior year vintage cannot exceed 20 percent of the total RIN submission for the current compliance year.

Another important factor to keep in mind is that a 2008 RIN could actually trade up until the last day of February 2010 – two years and two months after its earliest possible generation. The reason for this is the fact that compliance year 2009 reports are not due into EPA until the last day of February and therefore EPA permits the trading of the prior compliance year RINs up until the deadline. In our example, the 2008 RIN would then be automatically expired on March 1, 2010 if it was not already applied to a party’s obligation. More about this later.

The qualification of RINs based on vintage year is an important consideration and should be well understood by anyone electing to trade in this market or otherwise a regulated party under the RFS program.

Click here to download a PDF of Educational Series Briefing No 8: What is the Lifetime of a RIN?

Past briefings are available by clicking here.

Tags: , , , , ,