Posts Tagged ‘EPA’
Educational Series: How are RINs Tracked?
RFS Educational Series Briefing No. 5: How Are RINs Tracked?
Written by Clayton McMartin for Televent DTN
The RFS regulations require that accurate records pertaining to RIN activity be maintained and summary reports be submitted to EPA each quarter (1). In principle this is a simple concept; in practice it is much more complex.
As title to product and the associated RINs are transferred from one party to the next the supplier (transferor) is required to generate and deliver documentation to their customer (transferee). As the transferee then sells to their customer, and so on down the line, the same type of documentation is required each time title is transferred. Now that each of these events has been documented, each party is required to keep the records in an organized manner and report to EPA every quarter on their activity. These standardized reports are due two months after the quarter closes (1). EPA staff members can then process the data to track the movement of renewable fuel through the supply chain and determine if all parties are in compliance.
EPA utilizes a post-audit approach to the program, where they gather data pertaining to literally millions of transactions and then process, looking for discrepancies and inconsistencies among the data. The shortcoming of this approach is the fact that possible violations are revealed months after they have occurred, making for considerable challenges in the area of enforcement and overall exposure.
An alternative approach is for companies to voluntarily participate on the renewable fuel registry where they take a proactive approach to RIN tracking and validation. By utilizing a third party verifier, companies are able to manage massive amounts of data on one standardized computing system (2). Through a centralized registry, companies are also able to conduct a more through job of due diligence and minimize ownership issues before they occur. The RIN program is “Buyer Beware” and any liability resulting from title defects fall to the current owner.
(1)Future View: As discussed in Briefing #2, the reporting frequency will increase under RFS2, first to monthly then to within three days of the transaction.
(2)Future View: EPA has proposed a centralized and closed system for clearing RIN transactions known as the EPA Moderated Transaction System (EMTS). EPA has stated that they hope to bring increased confidence to the marketplace with EMTS – schedule to go into effect in 2011. More details will be provided about EMTS in future briefings.
Click here to download a PDF of Educational Series Briefing No 5: How are RINs Tracked?
Past briefings are available by clicking here.
Tags: Clayton McMartin, Educational Briefing Series, EMTS, EPA, EPA Moderated Tracking System. RINs, RFS
Editorial: EPA Appears Caught in a Catch 22
Two key timing issues have essentially paralyzed the Environmental Protection Agency at this point regarding the Renewable Fuels Standard. The first is the pending issuance of the much awaited final rules for RFS2 and the second is the Nov. 30th deadline for the 2010 mandates. It appears that EPA cannot issue one without the other.
Why is this? Because it is essentially a “Catch 22” leaving EPA in the unenviable position of establishing a mandate with what some will challenge they have no authority to do.
In fact, during the comment period for RFS2 notice of proposed rulemaking, the American Petroleum Institute in comments from Al Manato delivered to the docket on Sept. 25 made the following comments on this subject:
a. EPA cannot enforce EISA RFS volume mandates without final regulation.
“It is API’s position that EPA cannot lawfully establish renewable fuel standards (either general or fuel-type specific) based on the volumes set forth in the Energy Independence and Security Act of 2007 (EISA) without completing the rulemaking specified in the final sentence of CAA 211(o)(2)(A)(i). In addition, EPA cannot lawfully extend the RFS program to fuels other than gasoline. API is concerned that the Agency has imposed the EISA-mandated total renewable volume in 2009. EPA should not attempt to enforce a 17 percent greater mandate in 2010 until the RFS2 rulemaking is finalized. The rules that were finalized according to the Administrative Procedures Act procedures which implemented the Energy Policy Act of 2005 (EPACT05) require no more than 6.8 billion gallons of renewables in 2010.”
Nov. 30th came and went without EPA issuing the much awaited 2010 mandates for renewable fuels. The 2005 Energy Policy Act requires EPA to work with the Department of Energy and establish the coming year’s renewable fuel standard, which then allows obligated parties to establish their volumetric targets for the coming year. According to statutes, this report is due no later than Nov. 30th of the year prior to the compliance year in which the mandates are being established.
Of course, the mandates also serve as a floor to renewable fuel demand and allow producers, distributors, marketers, blenders, and importers to establish their strategic plans for the coming year. Even in the best of cases, there is little time to make final operational and commercial modifications. And now with less than a month remaining in 2009, companies are left wondering what the final targets will be.
Obviously, not everyone sees this important issue the same way. However, the bottom line is the fact that this constant uncertainty combined with delays will take its further toll on all who operate in the renewable fuels business arena.
Tags: Clayton McMartin, EPA, renewable fuel mandates, RFS2, RFS2 notice of proposed rulemaking
Coming Up Short
Coming Up Short
By: Kris Bevill
From the November 2009 Ethanol Producer Magazine
Tags: Clayton McMartin, Clean Fuels Clearinghouse, Energy Independence and Security Act of 2007, Environmental Protection Agency, EPA, Renewable Fuel Standard, Renewable Identification Number, RFS2, RIN, RINSTAR, RINStar Renewable Fuels Registry
RIN Credits, Ethanol Blending and the 800-pound Gorilla
RIN Credits, Ethanol Blending and the 800-pound Gorilla
By: Ron Kotrba
From the April 2009 Ethanol Producer Magazine
Renewable energy credit prices are on the rise as ethanol blend economics remain poor and the year-end reporting date looms. EPM talks with Clayton McMartin, president of Clean Fuels Clearinghouse, about renewable identification number credits, industry consolidation, and the oil industry’s 800-pound gorilla, Valero Energy Corp., which can no longer be ignored.
The 800-pound gorilla in the room finally announced itself in early February. For months, speculators have been trying to figure out which ethanol companies will buy out which ethanol plants during this period of crushing economic recession and potential ethanol industry consolidation. Aside from food companies, what other industry made record profits in 2008 and could logically purchase distressed ethanol production facilities? The oil refiners—they who are obligated to blend ethanol into their supplies as mandated under the federal renewable fuels standard (RFS). On Friday, Feb. 6, VeraSun Energy Corp. “took out the trash”—that’s public relations lingo for releasing bad news on a Friday, with the understanding that there will be little coverage of it until at least Monday. The same day, VeraSun issued a press release titled, “VeraSun Energy Obtains ‘Stalking Horse’ Bid From Valero for Five Facilities; Files Motion Seeking Authority to Sell Substantially All Assets by March.” Read the rest of this entry »
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Ethanol-Producer Magazine, Fuel, Gasoline, McMartin, press, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, Ron, Ron Kotrba
EPA rolls out RINs Moderated Tracking System
EPA Rolls Out RINs Moderated Tracking System
By: Ron Kotrba
From the March 2009 Web Exclusive Ethanol Producer Magazine
The U.S. EPA held a Webinar on Feb. 25 to explain its development of a Moderated Tracking System that will accurately and securely track renewable identification number (RIN) credits.
A RIN is a 38-character numeric code that’s generated by the producer or importer of renewable fuel; it represents gallons of renewable fuel produced/imported and is assigned to batches of renewable fuel that are transferred (change of ownership) to others. RINs are valid for the calendar-generated, or the following year.
RINs currently apply to the ethanol industry; however beginning in 2010 RINS will also apply to the biodiesel industry.
The EPA is developing MTS to track the generation, distribution and sale of RINs as a way to help accurately enforce the mandates under the renewable fuels standard enacted in the Energy Independence & Security Act of 2007. The market-based renewable fuels registry RINSTAR has been working with the EPA to help develop a federal register through which all RIN transactions would flow to ensure accurate and honest reporting. Read the rest of this entry »
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Ethanol-Producer Magazine, Fuel, Gasoline, McMartin, press, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, Ron, Ron Kotrba
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
Spot Ethanol Prices Flat as Supply, Demand in Balance
Spot Ethanol Prices Flat as Supply, Demand in Balance
By: George Orwel
February 2009 DTN Refined Fuels
NEW YORK (DTN) — Spot ethanol prices rose slightly on Friday from the levels seen Thursday, but there wasn’t much change for the week as traders weighed lower corn prices against higher gasoline values.
In fact, in the ethanol swaps market, prices came off about 3cts, driven largely by the weaker corn market. But physical cargoes of ethanol for late January to early February delivery to Chicago traded at $1.57 and $1.59 gal, reflecting a session gain of 2cts and up 1.5cts for the week.
In the New York Harbor, physical cargoes traded 3cts higher for the session and 1.5cts higher for the week. Houston prices were discussed between $1.68 and $1.70 a gal, although no trade was reported. In the West Coast, most of the discussions on cargoes going to Las Vegas and a few to Phoenix, Ariz., with just a few to California. Read the rest of this entry »
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, DTM Refined Fuels, DTN, Environmental, EPA, Ethanol, Ethanol Prices, Fuel, Gasoline, Gorge Orwel, McMartin, Orwel, press, Refined Fuels, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN
RIN Registry, Trades, Prices Continue to Grow
RIN Registry, Trades, Prices Continue to Grow
By: Ron Kotrba
January 2009 Ethanol Producer Magazine Web exclusive post Feb. 2, 2009
Clayton McMartin, president of Clean Fuels Clearinghouse and the RINSTAR renewable fuel registry, was a guest on Bob Taylor’s live webcast show Jan. 27. Prior to the interview, more than 200 questions were submitted for McMartin to answer.
A year ago, McMartin said RINSTAR’s member companies totaled approximately 25, and since then, the registry has grown to include more than 140 members. In 12 months, RINSTAR has validated more than 500,000 trades, and renewable identification number (RIN) prices have gone from the 2 to 3 cent range to 15 cents on the market. “Most importantly, we’ve helped companies throughout the industry profit from this emerging market,” McMartin said.
Taylor placed the submitted questions in one of four categories: general program, compliance and penalties, the new renewable fuels standard (RFS2) and renewable fuels standard 1.5 (RFS1.5), and the economy and marketplace. Taylor then chose questions to ask McMartin during the one-hour show based on frequency. Read the rest of this entry »
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Environmental, EPA, Ethanol, Ethanol-Producer Magazine, Fuel, Gasoline, McMartin, press, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, Ron, Ron Kotrba
DJ Trading Of RIN Credits Increases As Ethanol Production Slows
Trading Of RIN Credits Increases
By: Ian Berry
From January 2009 Dow Jones Newswires
CHICAGO (Dow Jones)–Prices for a newly created renewable fuels credit have spiked recently, as refiners decide the credits make better economic sense than purchasing ethanol itself.
The credits, called renewable identification numbers, or RINs, started out trading at less than a penny after their 2005 creation, but now are at 12 to 13 cents for 2008 credits, having climbed during the past couple of weeks. The credits are administered by the Environmental Protection Agency as a way of tracking renewable fuel production.
The EPA had expected that production of renewable fuel would exceed the federal fuel mandate requirements “by a large margin,” creating a surplus of RINs “for at least the first few years of the program” and preventing a shortage, according to the agency’s Web site. But with ethanol plants closing or cutting back production, some analysts say the production could soon fall behind the mandate, which for 2009 is 11.1 billion gallons. Read the rest of this entry »
Tags: Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, Dow Jones, DowJones, Environmental, EPA, Ethanol, Fuel, Gasoline, Ian Berry, McMartin, Newswires, press, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN
Transition Period
Transition Period
By: Ron Kotrba
From the November 2008 Biodiesel Magazine
The federal renewable fuels standard calls for 500 million gallons of biomass-based diesel to be used in 2009. Many questions remain as to how this will play out.
2009 will be interesting with respect to implementation of the new renewable fuels standard, which many refer to as RFS2. New terms such as “advanced biofuel” and “biomass-based diesel” were never part of the 2005 RFS and just this year emerged as part of the new national energy-policy vernacular. Biomass-based diesel is a specified title under “advanced biofuel.” In 2009, RFS2 mandates that 11.1 billion gallons of renewable fuels must be blended into energy supplies; 10.5 billion of which is corn-based ethanol, and the other 600 million gallons must be “advanced biofuel,” 500 million gallons of which is to be biomass-based diesel. By 2012, 1 billion gallons of biomass-based diesel is required under the mandate.
Since the signing of the Energy Independence & Security Act of 2007—the Energy Bill that RFS2 was part of—speculation has run rampant as to how events will play out. There are a lot of unknowns left, especially since U.S. EPA delayed provisional rulemaking on implementation of RFS2 until January. Read the rest of this entry »
Tags: Biodiesel, Biodiesel Magazine, Biofuel, Biomass, Cellulosic, Clayton, Clayton McMartin, Clean Fuels Clearinghouse, Compliance, EBS, Environmental, EPA, Ethanol, Fuel, Gasoline, McMartin, November, Regulations, Renewable Fuel Standard, Renewable Identification Number, RFS, RIN, Ron Kotrba