PROPOSED QAP RULE
March 12, 2013
BY Ron Kotrba
U.S. EPA released its renewable identification number (RIN) quality assurance program (QAP) proposed rule in late January. The proposal establishes guidelines for third-party auditors and provides obligated parties an affirmative defense against civil liability for retiring invalid RINs. It includes three options: Option A, Option B, and the “buyer beware” approach currently in effect. Options A and B provide obligated parties with an affirmative defense against civil liabilities. Under Option A, if the biodiesel producer were unable to replace invalid QAP-A RINs they generated, the proposal requires the QAP auditor to bear the replacement cost. Under Option B, the obligated party that retired the invalid QAP-B RINs would be responsible. Option A requires a much more rigorous and comprehensive audit procedure than Option B; the former involves near real-time, ongoing auditing and reporting while quarterly auditing suffices for the latter. QAP-A replacement by the auditor, as the proposed rule exists now, must be backstopped by one or more replacement mechanisms: a RIN escrow account, a RIN bank or a financial instrument. Byron Bunker with EPA says obligated parties want QAP-A RINs, but notes QAP-B is less oversight at less cost to producers.
Option A limits the auditor’s replacement obligation to 2 percent of RINs audited over a five-year period. Under Option B, there is a limited exemption for obligated parties (for years 2013-’14 only) to not have to replace up to 2 percent of their total renewable volume obligation if they retire invalid QAP-B RINs. This was put in the proposal to encourage obligated parties to buy RINs again.
The start date is Jan. 1 even though the rule came out in late January. Bunker says the QAP provider can do a retrospective audit back to Jan. 1 by auditing the plant’s records. This is a unique situation in that, for this year, EPA is finalizing a proposal, but for 2014 on, the actual final rule will be in effect. A public hearing will be held March 19, and comments must be posted within 30 days after the hearing. Bunker strongly suggests biodiesel industry stakeholders post comments to help make the rule as sound as possible.
Advertisement
------------------------------
Ron Kotrba
Editor
Biodiesel Magazine
rkotrba@bbiinternational.com
Advertisement
Related Stories
Effective April 1, Illinois’ biodiesel blend requirements have increased from B14 to B17. The increase was implemented via a bipartisan bill passed in 2022, according to the Iowa Soybean Association.
Agriculture Secretary Brooke Rollins on March 31 visited Elite Octane LLC, a 155 MMgy ethanol plant in Atlantic, Iowa, to announce the USDA will release $537 million in obligated funding under the Higher Blends Infrastructure Incentive Program.
The U.S. EPA on March 24 asked the U.S. District Court for the District of Columbia to dismiss a lawsuit filed by biofuel groups last year regarding the agency’s failure to meet the statutory deadline to promulgate 2026 RFS RVOs.
The USDA on March 25 announced it will release previously obligated funding under the Rural Energy for America Program To receive the funds, applicants will be required to remove “harmful DEIA and “far-left climate features” from project proposals.
The 2025 International Biomass Conference & Expo, held March 18-20 in Atlanta Georgia, featured of insightful discussions, cutting-edge technology showcases, and unparalleled networking opportunities.
Upcoming Events
