Posts Tagged ‘EPA’
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
Inaugural RINWorld Summit a Great Success
Inaugural RINWorld Summit a Great Success
The RINWorld Summit was a great success, with companies from all over the United States, and in every sector of the renewable fuel industry attending. RINSTAR® Members accounted for approximately 1/3 of the audience.
True to our word, the Summit was not a RINSTAR® user conference but instead a balanced perspective on the commercial implementation of the RFS. Believe it or not, we didn’t even conduct a RINSTAR® demo. The content was substantial, with every presenter delivering useful information that the entire audience was able to benefit from.
Representatives from EPA provided all of us with some great insight; including when we can expect the new RFS2 to go into effect and what how the biodiesel standard will most likely be addressed in 2009. The year 2009 will certainly be a challenging period – one that I have termed RFS1.5 as we transition between the original RFS and RFS2.
Considering the fact that the RFS is only in its first year, it was great to see all of the personal connections that were made at the event. Since the program is so new, virtually no one in the audience had met each other in person, but most knew each other just by the sound of their voice. When you consider the microcosm that the RFS professional works within, it was a great experience meeting so many people in one place who actually knew what a RIN was.
One thing that was particularly apparent is that there is a great need for more information about the RFS and the RIN program. Recognizing this need, I am considering conducting a series of courses on various related subjects – What do you think about RIN University? And I will be the RIN Master. Maybe we could get some sweat shirts made up with RIN U Graduate. In all seriousness, let me know if you are interested, I am hearing from lots of people who are.
Tags: Clayton, Clayton McMartin, Clean Fuels Clearinghouse, CompIntelligence, Compliance Report, Dr. Robert Payne, EPA, Joel Velasco, OPIS, RFS, RFS1.5, RIN University, RINSTAR, RINSummit, RINWorld Summit, Stephen Fater, Success
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
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