Quality assurance plans bring confidence to RIN markets

QAP provides additional value not just for producers with smaller balance sheets or for producers who are new to the industry, but also for larger, well-established producers.
By NBB Staff | March 08, 2014

The renewable fuel standard (RFS) continues to be the driving force behind record biodiesel production volumes in the industry, and as the volumes grow, the integrity of the compliance mechanism of RINs becomes increasingly important. There are a number of private sector RIN integrity programs, but the Genscape RIN Integrity Network, developed with the support of the National Biodiesel Board and its members, is one of the most robust quality assurance plans (QAP) for RIN verification.

Genscape provides U.S. EPA preregistered QAP services and a number of other RIN integrity, RFS and low carbon fuel standard services to more than 40 renewable fuel producers, obligated parties, and midmarketers across three continents.

QAP has translated into increased RIN value for Genscape producers. QAP provides additional value not just for producers with smaller balance sheets or for producers who are new to the industry, but also for larger, well-established producers. In one example, a longstanding biodiesel producer looked to Genscape to provide RIN integrity guidance and proof of RIN assurance to two new buyers. This is an indicator that buyers are starting to rely more on third-party RIN integrity, like QAP, even for larger, more well-established producers.

One of the biggest successes of the Genscape QAP service is that its clients observed a premium to the cash price midpoint. In November, the premium was more than 15 cents to the midpoint for Genscape QAP clients. Prior to QAP, these same producers were regularly getting paid a deficit of 5 to 15 cents to the midpoint. QAP has made a huge difference in the overall ability of producers to get the best prices for RINs, secure longer-term deals, grow their buyer base, and meet the increasing demand for QAP RINs in counterparty agreements.

Once the rule becomes final, Genscape expects another large market push for QAP assurance. There are still companies that are skeptical about QAP and only the final rule with assurance of affirmative defense will make those skeptics believers. For more information on the program, please visit www.genscape.com/rin.

 
 
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