Business Briefings
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
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: Clayton McMartin, Renewable Fuel, Renewable Fuel Standard, RFS2, RIN, RIN Price
EPA MTS Webinar 3-5-09
Industry Survey Reveals Need for RIN Market Confidence
306 companies participated in a webinar sponsored by RINSTAR® and the CFSAB (Clean Fuel Standards Advisory Board) on March 5, 2009. Several important issues related to EPA’s proposed Moderated Transaction System (EPAMTS) were discussed.
A sampling of the more revealing survey questions are shown here:
For your convenience the entire webinar is available for replay by selecting the Play button on the video now!—
RINSTAR® Members are addressing many of these issues today with the generation of Gold Star™ and Silver Star™ Certified RINs.
Look for even more advances in the area of RIN market confidence in the coming days.
Moderated Transaction System
EPA introduced the concept of a Moderated Transaction System (MTS) on Wednesday February 25th during a webinar to an industry audience of 200 people. The purpose of the webinar was to seek stakeholder input prior to the MTS being proposed in the Notice of Proposed Rule Making (NPRM), anticipated to be issued any day now. The print material is provided in the two files shown here.
With support of media partners, Ethanol Producer Magazine and Biodiesel Magazine, the Clean Fuel Standards Advisory Board (CFSAB) will sponsor a replay of the orginal webinar along with an interactive series of polling and commentary. This followup webinar is scheduled for Thursday March 5, 2009 from 1:00 - 2:30 EST. Interested parties are invited to register for the event by selecting this link now:
https://www2.gotomeeting.com/register/495977954
Results from the polling will be shared during the webinar with all who participate. In addition, polling results and all questions gathered througout the event will be compiled and delivered to EPA as a representative sampling of the affected industry stakeholders. Over 540 people have already registered for the event. There is a limited seating of 1,000.
Using CDX and the Exchange Network Services
EPA Will Take More Time To Respond to RFS Waiver Request
EPA Will Take More Time To Respond to RFS Waiver Request
Author: Clayton McMartin
EPA Administrator Stephen Johnson issued a press release today addressing the long awaited decision to Governor Rick Perry’s RFS waiver request filed 88 days ago. And the answer is, we need more time.
“Additional time is needed to allow staff to adequately respond to the public comments and develop a decision document that explains the technical, economic and legal rationale of our decision,” the EPA said in a news release on Tuesday July 22, 2008.
According to testimony given by Principal Deputy Assistant Robert Meyers during the July 10, 2008 Senate Environment and Public Works hearing on implementation of the Renewable Fuel Standard, over 15,000 comments had been received by EPA on the waiver request.
The administrator’s comments would indicate that EPA has yet to make a final decision on the matter, assuring the public through the press release that, “The process remains fair and open, and no agreements have been made with any party in regard to the substance and timing of the decision on the waiver request.”
According to Administrator Johnson, a final decision on the Texas Governor’s petition is expected in August. No additional details were available.
Whatever the final decision, the impact to the renewable fuel supply chain will be significant. Texas Governor Rick Perry will open the RINWorld Summit in Dallas Texas on October 16, where industry leaders and government official will convene to discuss and learn more about the cost effective implementation of the RFS.
Tags: Biodiesel, Biomass, Clayton, Compliance Report, Diesel, EPA, Ethanol, Fuel, Gasoline, Government, Governor, McMartin, Policy Act, Refueling America, Regulations, Renewable Fuel Credits, Renewable Fuel Registry, Renewable Fuel Standard, Renewable Identification Number, Response, RFS, Rick Perry, RIN, RINSTAR, waiver
Already on the Books
EPA’s Answer to Governor Perry’s RFS Waiver Request Already on the Books
Author: Clayton McMartin
[audio:http://cleanfuelsclearinghouse.com/wp-content/uploads/version-2-waiver-answer-on-the-books.mp3]
As surely everyone in the renewable fuels area has heard, Texas Governor Rick Perry petitioned EPA for a partial waiver of the RFS on April 25, 2008.
http://www.epa.gov/otaq/renewablefuels/rfs-texas-letter.pdf
What virtually no one seems to realize is that the answer to the Governor’s request has already been addressed in the existing regulations.
The answer, in the form of legal jargon and published in the federal register on May 1, 2007, can be found in the provision for “deficit carryovers” of renewable fuel credits known as RINs. The exact language can be found in the federal register, 40 CFR Section 80.1127(b), deficit carryovers. For those so inclined, the final rule is available at http://www.epa.gov/otaq/renewablefuels/rfs-finalrule.pdf
More in layman’s terms, the Act anticipated the situation and EPA actually addressed the matter in the preamble to the regulations (Federal Register page 23934) with the following:
“The Act clearly set up a credit program with a credit life, meaning Congress intended parties to use credits in some cases instead of blending renewable fuel. The Act is best read to harmonize all of its provisions. In addition, we note that other provisions of the Act may lead to less renewable fuel use in a given year than the statutorily-prescribed volumes, but Congress adopted them and intended that they could be used. For instance, the deficit carryover provision allows any obligated party to fail to meet its RVO in one year if it meets the deficit and its RVO in the next year. If several obligated parties took advantage of this provision, it could result in the nationwide total volume obligation for a particular calendar year not being met.”
There are essentially no limits to the deficit carryover provision, other than it can not have been invoked during the prior year and if invoked in 2008 can not be used again by the obligated party in 2009. If anyone used the provision in 2007 it would be a very rare, therefore it is essentially available to all obligated parties now.
This foresight, on the part of the original lawmakers, addresses both the Texas Governor’s petition as well as the uncertainty brought about by the flooding in the corn-belt areas of Iowa.
For those who are looking for EPA’s most likely response to any waiver request, consider Clayton McMartin officially on the record now. The answer will be “this issue was anticipated in the original Act and is to be addressed with the use of RINs.” Of course nothing is black and white when it comes to politics, so we will all have to wait to hear EPA’s official response later this month.
Now for some related news. Governor Perry is scheduled to open the inaugural RINWorld Summitwww.RINsummit.com in Dallas Texas on October 16, 2008. Industry leaders will convene to learn more about the emerging markets for renewable fuels, cost effective implementation of the RFS, and the future of renewable fuels in America.
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Fuel, Gasoline, Governor Perry, McMartin, Perry Waiver, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, Rick Perry, RIN, Waiver Request
Renewable Fuel Standard to be Delayed According to EPA
Renewable Fuel Standard to be Delayed According to EPA
[audio:http://cleanfuelsclearinghouse.com/wp-content/uploads/epw-testimony.mp3|titles=EPW Testimony|artists=Clayton McMartin]
Testimony from EPA Principal Deputy Assistant Administrator Robert Meyers is the first official indication that the Renewable Fuel Standard will be delayed.This development was revealed during a Senate Committee on Energy and Public Works hearing, held on July 10, 2008.
According to Mr. Meyers, “it would be difficult to meet the statutory deadline by the end of the year”. When pressed for a completion date by Majority Leader Senator Barbara Boxer, Mr. Meyers responded “according to our projections we believe we can go final next year, somewhere in the middle of the year” Presumably, we can expect to see the final rule in the June timeframe of 2009. Mr. Meyers did indicate that the notice of proposed rule making (NPRM) will be out this fall.
Delaying the final rule will have an affect on participants throughout the renewable fuel supply chain, especially in the area of advanced biofuels, such as the emerging area of cellulosic fuels, and on obligated parties such as refiners. With new mandates set to come online Jan 1, 2009, EPA will need to provide interim direction on how the RFS is to be administered in this time of transition. Look to the Clean Fuels Clearinghouse as new developments form in this area.
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Fuel, Gasoline, McMartin, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN
Survey Reveals Challenges with RFS Compliance
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?
Tags: 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