Example RIN Holdings and RIN Holding Thresholds Calculations (40 C.F.R. 80.1435)

Example RIN Holdings and RIN
Holding Thresholds Calculations
(40 C-ER, 80*1435)
A	United States
Environ mental frotoclltn
hI	Agency

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Example RIN Holdings and RIN
Holding Thresholds Calculations
(40 C-ER, 80*1435)
Compliance Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
Environmental Protection
Agency
EPA-420-B-19-056
November 2019

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Example RIN Holdings and RIN Holding Thresholds
Calculations (40 C.F.R. 80.1435)
Beginning January 1, 2020, any party that holds RINs must comply with the RIN holding
requirements of 40 CFR 80.1435. This document outlines a series of example RIN holdings
calculations based on various simplified, hypothetical scenarios that RIN holding parties may
face. These examples are intendedfor use as a reference only, and in no way alter the regulatory
requirements at 40 CFR 80.1435. Unless otherwise noted, all RINs referenced in this document
are assumed to be separated D6 RINs.
RIN Holding Calculation Steps
Step 1: Identify your corporate affiliate group
Two RIN-holding parties are corporate affiliates if one or more of the following is true:
• One party owns or controls ownership of more than 20 percent of the other
• One parent company owns or controls ownership of more than 20 percent of both
A corporate affiliate group means a group of parties in which each party is a corporate affiliate to
at least one other party in the group.
Contractual affiliates should not be included in corporate affiliate groups.
Step 2: Identify your RIN holdings
Each party should identify its own daily separated D6 RIN holdings. These holdings are then
aggregated amongst the members of the corporate affiliate group (as applicable) in step 3.
Step 3: Identify the right primary threshold equation
The day of the year for which the RIN holdings calculations are being performed determines
which set of formulas to use. Calculations performed during the first quarter of the calendar year
(January 1 - March 31) require formulas with a 1.25 multiplier, while the calculations performed
during the rest of the year (April 1 - December 31) require formulas with no multiplier.
Step 4: Calculate holdings to market percentage (HTMP)
Every RIN-holding party must calculate the HTMP of each corporate affiliate group of which it
is a member. If there are no corporate affiliations, the RIN-holding party should calculate the
HTMP just for itself.
Step 5: Determine if secondary threshold equation is required
The secondary threshold equations are required if both of the following criteria are met:
• At least one party in the corporate affiliate group is an obligated party (OP)
• The corporate affiliate group's HTMP exceeded 3.00 percent on any day in the quarter
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If either of these criteria are not met, the corporate affiliate group does not need to calculate
HTOP and should decide whether it exceeded its RIN holdings threshold based on the results of
step 4.
Step 6: If required, calculate the conventional RVO and deficit
If the secondary threshold equations are required by step 5, each member of the corporate
affiliate group should calculate its conventional RVO and deficit (as applicable).
Step 7: If required, calculate holdings to obligation percentage (HTOP)
The results from the calculations under step 6 should then be used to calculate the group's
HTOP. As with the primary threshold equation, the day of the year the calculations are being
performed on will determine which set of formulas to use.
Step 8: Submit quarterly RFS0105 report indicating whether the applicable threshold was
exceeded during the quarter
All RIN holding parties are required to submit the quarterly RFS activity report, regardless of
whether they exceeded the applicable threshold or not.
Although this is a quarterly report, parties may choose to perform their end of day RIN holding
calculations quarterly, daily, or another sub-quarterly frequency depending on what best suits
their established business practices.
Scenario 1: One Non-Obligated Party Owns or Controls Another Non-Obligated Party
• Step 1:
25%
Company A
Non-Obligated
RIN-Holding
Company B
Non-Obligated
RIN-Holding
• Company A and Company B are in the same corporate affiliate group because A owns
more than 20 percent of B. Thus, their RIN holdings calculations should yield the same
result.
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• Step 2:

A
B
End-of-day
separated D6
RIN Holdings
750,000
10,000,000
Expected annual volume of
conventional renewable fuel for
2019 (billion gallons)
15.0
Date of calculations
February 15, 2019
•	Step 3: The calculations are being performed for the day of February 15, meaning the
equation at 40 CFR 80.1435(b)(l)(i) should be used.
•	Step 4:
HTMPd = [(750,000 + 10,000,000) / (15,000,000,000 * 1.25)] * 100
HTMPd = 0.06%
•	The AB corporate affiliate group's holdings-to-market-percentage is below 3.00 percent
and therefore both parties should use the "NPS" code on the quarterly RFS0105 report,
provided the group does not exceed the applicable thresholds on any other day during the
quarter.
•	Step 5: Both parties are non-obligated parties under the RFS, so only the primary
threshold is applicable.
•	Steps 6 & 7: N/A
•	Step 8: Submit report before June 1, 2019.
Scenario 2: One Obligated Party Owns or Controls Another Obligated Party
•	Step 1:
55%
Obligated
Party A
Obligated
RIN-Holding
Obligated
Party B
Obligated
RIN-Holding
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•	Obligated Party A and Obligated Party B are in the same corporate affiliate group
because A controls ownership of more than 20 percent of B. Thus, their RIN holdings
calculations should yield the same result.
•	Step 2:

A
B
End-of-day separated D6 RIN
Holdings
50,000,000
320,000,000
2018 Gasoline Production/Import
(million gallons)
4,000
1,750
2018 Diesel Production/Import
(million gallons)
1,500
500
2018 Renewable Fuel Deficit
Carryover (RIN-gallons)
0
0
2018 Advanced Biofuel Deficit
Carryover (RIN-gallons)
0
0
Expected annual volume of
conventional renewable fuel for
2019 (billion gallons)
15.0
Renewable fuel standard for 2018
10.67%
Advanced biofuel standard for 2018
2.37%
Date of calculations
December 1, 2019
•	Step 3: The calculations are being performed for the day of December 1, meaning the
group should start by calculating its holdings-to-market percentage using the equation at
40 CFR 80.1435(b)(l)(ii).
•	Step 4:
"AB" Corporate Affiliate Group
HTMPd = [(50,000,000 + 320,000,000) / (15,000,000,000)] * 100
HTMPd = 2.47%
•	Step 5: Both parties are obligated parties under the RFS, so both the primary and
secondary thresholds are applicable. However, AB's holdings-to-market-percentage is
below 3.00 percent, therefore the group does not need to perform the secondary RIN
holding threshold calculation at 40 CFR 80.1435(b)(2)(ii). Both parties should use the
"NPS" code on the quarterly RFS0105 report, provided the group does not exceed the
applicable thresholds on any other day during the quarter.
•	Steps 6 & 7: N/A
•	Step 8: Submit report before March 1, 2020.
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Scenario 3: One Obligated Party Owns or Controls Another Obligated Party and a Non-
Obligated Party
Step 1:
33%
25%
20%
Obligated
Party B
Obligated
RIN-Holding
Obligated
Party A
Obligated
RIN-Holding
Importer D
Obligated
RIN-Holding
RIN Generator
Non-Obligated
RIN-Holding
•	Parties A, B, and C share a corporate affiliate group because A owns or controls
ownership of more than 20 percent of B and C. Therefore, each party's RIN holding
calculations should yield the same result.
•	Importer D is not included in this corporate affiliate group because C does not own or
control more than 20 percent of D.
•	Step 2:

A
B
c
D
End-of-day separated
D6 RIN Holdings
150,000,000
100,000,000
225,000,000
80,000,000
2018 Gasoline




Production/Import
(million gallons)
3,250
1,750
N/A
400
2018 Diesel




Production/Import
(million gallons)
1,250
750
N/A
50
2018 Renewable Fuel




Deficit Carryover
(RIN-gallons)
0
0
N/A
0
2018 Advanced




Biofuel Deficit
0
0
N/A
0
Carryover
(RIN-gallons)
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Expected annual volume of
conventional renewable fuel for
2019 (billion gallons)
15.0
Renewable fuel standard for 2018
10.67%
Advanced biofuel standard for 2018
2.37%
Date of calculations
May 1, 2019
•	Step 3: The calculations are being performed for the day of May 1, meaning the group
should start by calculating its holdings-to-market percentage using the equation at 40
CFR 80.1435(b)(l)(ii).
•	Step 4:
"ABC" Corporate Affiliate Group
HTMPd = [(150,000,000 + 100,000,000 + 225,000,000) / (15,000,000,000)] * 100
HTMPd = 3.17%
Importer D
HTMPd = [(80,000,000) / (15,000,000,000)] * 100
HTMPd = 0.53%
•	Step 5: A and B are obligated parties under the RFS, so both the primary and secondary
thresholds are applicable for the ABC corporate affiliate group. ABC's holdings-to-
market-percentage is above 3.00 percent and therefore all parties must perform the
secondary RIN holding threshold calculation at 40 CFR 80.1435(b)(2)(ii).
•	Although D is an obligated party under the RFS, its holdings-to-market-percentage is
below 3.00 percent and therefore it does not need to perform the secondary RIN holding
threshold calculation at 40 CFR 80.1435(b)(2)(ii).
•	Step 6: First, the ABC group must calculate its conventional RVO using the equation at
40 CFR 80.1435(b)(2)(iii).1
CNV RVO2018 = {[0.1067 * (3,250,000,000 + 1,750,000,000 + 1,250,000,000 + 750,000,000)] -
[0.0237 * (3,250,000,000 + 1,750,000,000 + 1,250,000,000 + 750,000,000)]} + 0
CNV RVO2018 = 581,000,000 RIN-gallons
•	Since none of the obligated parties in the corporate affiliate group carried over a deficit
from 2019, there is no need to use the formula at 40 CFR 80.1435(b)(2)(iv).
•	Step 7: Once ABC s conventional RVO is calculated, the secondary RIN holding
threshold formula at 40 CFR 80.1435(b)(2)(ii) applies.
HTOPd = [(150,000,000 + 100,000,000 + 225,000,000) / (578,200,000 + 0)] * 100
1 For simplicity, this document calculates the CNVRVO for the entire corporate affiliate group using one equation.
In practice, parties should calculate their CNV RVO individually, then sum the results when calculating HTOP.
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HTOPd = 81.76%
•	Since ABC's holdings-to-market percentage is above 3.00 percent but its holdings-to-
obligation percentage is below 130.00%, all three parties should use the "PNO" code on
the quarterly RFS0105 report, provided the group does not exceed the applicable
thresholds on any other day during the quarter.
•	Since D's holdings-to-market percentage is below 3.00 percent, it should use the "NPS"
code on the quarterly RFS0105 report, provided it does not exceed the applicable
thresholds on any other day during the quarter.
•	Step 8: Submit report before September 1, 2020.
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