EPA Proposes RIN Market Reform and E15 RVP Waiver

RINAlliance is evaluating the 175-page proposed EPA rule released yesterday and will be submitting comments to the U.S. Environmental Protection Agency (EPA) regarding the Renewable Identification Number (RIN) reform changes proposed. The RIN market reform is tied into a proposal that would allow the sale of gasoline blended with up to 15% ethanol year-round.

In the proposal, EPA acknowledges no RIN market manipulation data exists. EPA is responding to President Trump’s October 11, 2018 statement on increasing transparency in the RIN market. See statement HERE. EPA is requesting input on RIN market reforms outlined by the President and EPA itself, which include:

  • Requiring public disclosure when D6 RIN holdings held by an individual actor exceed specified limits. Daily calculations required as well as corporate affiliate calculations and disclosures.
  • Requiring the retirement of RINs for the purpose of compliance be made in real time, or first three quarters of the compliance year.
  • Prohibiting entities other than obligated parties from purchasing separated D6 RINs.
  • Limiting the length of time a non-obligated party can hold RINs.
  • Requiring both parties in RIN sales transaction to enter same RIN price in EMTS enabling EPA to publicize RIN price data. Spot sales or term contract sales reporting would also be required.

On the positive side, the RIN reform proposal is coupled with a long-awaited proposal to allow E15 sales year-round, which is welcome news to marketers offering E15 and would allow the blend to be sold year-round to all vehicles 2001 and newer. Currently, during summer months (June 1-September 15), sales are not allowed in light of the statute limiting the 1-pound Reid Vapor Pressure (RVP) waiver only to E10.

Dawn Carlson, CEO of RINAlliance, stated “It is ironic that EPA would propose changes to expand sales of ethanol while simultaneously proposing reform that could undermine the RFS which was designed to expand biofuel sales. The RIN reform proposal would disincentivize marketers who are successfully blending with ethanol and biodiesel and be counterproductive to the nation’s pursuit of energy independence.” RINAlliance will continue to evaluate the details of the proposed rule and advise clients on avenues to weigh in on the rulemaking. The proposed rule can be found HERE.

RINAlliance has a long and successful track record (since 2007) of assisting RFS stakeholders with RIN management and sales. We will work with the agency and assert the transparent and efficient RIN marketing processes that are already working well. Efforts to reform a system that is working as intended have a potential of disrupting and even undermining the RFS.