On February 21st, EPA proposed new rules
under the Renewable Fuel Standard Program (RFS) intended to improve market conditions for Renewable Identification Numbers (RINs). The RFS allows producers and importers of renewable fuel to generate RINs to sell to petroleum refiners and importers, which the latter uses to show compliance with renewable fuel requirements. Under the existing program, RIN purchasers are held strictly liable if the RINs prove fraudulent. This has led purchasers to audit their vendors or to buy only from well-known and trusted sources. EPA is concerned that the current program is therefore damaging the liquidity of RINs and erecting entry barriers to the market.
In response, EPA proposes a voluntary quality assurance program that if adopted by vendors would offer protection for purchasers. The level of rigor involved is substantial and will be expensive to achieve. Still, there may be a market advantage to RIN sellers that adopt strong programs in advance of EPA action. Comments on the new rules are due April 8th.