EPA Issues Final Rule to Establish a
Voluntary Quality Assurance Program
for Verifying the Validity of Renewable
Identification Numbers Under the
RFS Program
In today's action we are finalizing a voluntary quality assurance
program for verifying the validity of Renewable Identification
Numbers (RINs) under the Renewable Fuel Standard (RFS) program.
For RINs that have been verified according to an approved quality
assurance plan (QAP), the program will provide an affirmative
defense against liability for civil violations under certain conditions
for the transfer or use of invalidly generated RINs, and specifies both
the conditions under which invalid RINs must be replaced with valid
RINs, and by whom. The program includes elements to allow verifica-
tion of RINs beginning January 1, 2013.
We are also finalizing modifications to the exporter provisions of the RFS program to
ensure that an appropriate number and type of RINs are retired whenever renewable
fuel is exported. Finally, we are finalizing a number of changes to other RFS regula-
tions governing the transfer and use of RINs that become invalid downstream of the
producer.
Background
The RFS program, which was established under Energy Policy Act of 2005 (EPAct)
and subsequently modified through the Energy Independence and Security Act of
2007 (EISA), requires that specified volumes of renewable fuel be used as transporta-
tion fuel, home heating oil, and/or jet fuel each year. To accomplish this, EPA pub-
lishes applicable percentage standards annually (for advanced biofuel, biomass-based
United
Environmental Protection
Office of Transportation and Air Quality
EPA-420-F-14-042
June 2014
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diesel, cellulosic biofuel, and total renewable fuel) that apply based on the sum of all gasoline
and diesel produced or imported. RINs are generated by renewable fuel producers and importers
and represent volumes that meet the requirements for renewable fuel under the RFS program.
Once RINs have been generated, they can be transfered between parties and used by petroleum
refiners and importers ("obligated parties") to show compliance with their volume obligations.
Cases of fraudulently generated RINs, however, led to a reduction in the overall liquidity in the
RIN market and in smaller renewable fuel producers having difficulty selling their RINs.
Summary of Major Provisions
Today's action finalizes a voluntary third-party quality assurance program option for RINs that
regulated parties may exercise as a supplement to the "buyer beware" liability as prescribed under
existing regulations. The program provides a means for ensuring that RINs are properly gener-
ated through audits of renewable fuel production conducted by independent third-parties using
quality assurance plans (QAPs), provides an affirmative defense for the transfer or use of invalid
RINs that had been verified under an approved QAP, defines the conditions when RINs must be
replaced, and a process for determining who will replace the RINs.
For the interim period only, which runs from February 21, 2013 (the publication date of the
notice of proposed rulemaking) through December 31, 2014, we are finalizing both of the
proposed QAP program options, QAP A and QAP B.
Beginning January 1, 2015, after the interim period is over, the program will consist of a single
QAP option, with its associated verified RINs referred to as Q-RINs. To this end, we are final-
izing the following for the single QAP:
• Minimum requirements for a QAP, including such things as verification of feedstocks,
verification that volumes produced are consistent with amount of feedstocks processed,
and verification that RINs generated are appropriately categorized and match the
volumes produced
• Qualifications for independent third-party auditors
• Requirements for audits of renewable fuel production facilities, including minimum
frequency, site visits, review of records, and reporting
• Conditions under which a regulated party could assert an affirmative defense to civil
liability for transferring or using an invalid RIN
• Identification of the party or parties who are responsible for replacing invalid RINs with
valid RINs and the timing of such replacement
• A limited exemption for calendar years 2014, 2015, and 2016 that exempts two percent
of a party's Renewable Volume Obligation (RVO) from the replacement requirement if
the RINs were used for compliance and were verified through a QAP
• Changes to the EPA Moderated Transaction System (EMTS) that would accommodate
the quality assurance program
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We are finalizing certain provisions exclusive to QAP A in the interim period, such as the RIN
replacement mechanism that provides for invalid A'RINs to be replaced, the RIN replacement
cap for auditor replacement of invalid A'RINs, and the elements of an affirmative defense
specific to A'RINs. Additionally, we are finalizing provisions exclusive to QAP B in the interim
period, such as the elements of an affirmative defense specific to B-RINs, and a two percent
limited exemption for B'RINs for calendar years 2013 and 2014.
We are also finalizing modifications to the exporter provisions of the RFS program. These modi'
fications will help ensure that an appropriate number and type of RINs are retired whenever
renewable fuel is exported. Finally, we are finalizing a number of changes to other aspects of the
RFS regulations governing the transfer and use of RINs that become invalid downstream of the
producer.
Impacts
The voluntary quality assurance program is intended to improve RIN market liquidity and ef-
ficiency and improve the ability of smaller renewable fuel producers to sell their RINs. As the
program is voluntary, there would be no required costs. Today's action would not affect the
volumes of renewable fuel required to be produced or the associated greenhouse gas or energy
security benefits of the RFS program.
For More Information
For more information, please visit the RFS website at:
www.epa.gov/otaq/fuels/renewablefuels
To submit a question on the RFS program, and to view Frequently Asked Questions, please visit:
www.epa.gov/otaq/fuels/renewablefuels/compliancehelp/index.htm
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