Posts Tagged ‘Clayton’
EPA Warns Companies to Trade RINs Properly
EPA Warns Companies to Trade RINs Properly
By: Kris Bevill
From the July 2008 Ethanol Producer Magazine
Established by the U.S. EPA as a way to track the amount of renewable fuel produced in the United States, renewable identification numbers (RINs) have only been around since September 2007 and regulations for them are often overlooked or disregarded.
As a result, the EPA recently reissued a document warning companies about improper and illegal RIN trading practices. No changes have been made to the regulations. The document merely serves as a stern reminder from the EPA for companies to comply – or face fines. Violators of RIN regulations can be punished with fines established under the Clean Air Act that can be up to $32,500 per day.
The EPA document covers three commonly occurring RIN transactions that defy regulations. The first is a situation in which an error during the sale was made, either a billing or volume error, and the seller “re-bills” RINs that have already been transferred. For producers, this is illegal because renewable fuel must be transferred with the correct number of RINs attached. Also, the ownership of RINs is transferred along with the fuel, so those RINs automatically become owned by the receiving company and cannot be simply transferred back to the seller. Read the rest of this entry »
Tags: bevill, Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Ethanol-Producer Magazine, Fuel, Gasoline, kris, Kris Bevill, McMartin, press, 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
The Hidden Costs of the Renewable Fuels Standard
The Hidden Costs of the Renewable Fuels Standard
Author: Clayton McMartin
From the February 2008 Ethanol Producer Magazine
Millions of dollars in operating capital are being wasted as the ethanol industry struggles to comply with the renewable fuels standard. A survey conducted during an Oct. 30 web conference attended by 234 industry stakeholders indicates that as many as 61 percent of renewable fuel suppliers are out of compliance.
Each of these facts are directly attributable to the requirements set forth in the RFS regulations requiring new documentation for product transfers throughout the renewable fuel supply chain. Many players have attempted to satisfy these requirements by modifying their existing production account systems, resulting in a short-term solution with long-term consequences.
Although the threat of $32,500-per-day fines for Clean Air Act violations is significant, even greater daily costs have come to bear upon the entire industry by those mixing business systems with regulatory compliance systems. Millions of dollars in extra operating capital are required for those who have adopted this ill-advised operating practice, which comes at a time when most in the biofuels business are experiencing painfully low profit margins. Read the rest of this entry »
Tags: Biodiesel, Biomass, Clayton, Compliance Report, Diesel, EPA, Ethanol, Ethanol-Producer Magazine, Fuel, Gasoline, Hidden Cost of Renewable Fuel, McMartin, Policy Act, Refueling America, Regulations, Renewable Fuel Credits, Renewable Fuel Registry, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, RINSTAR