Biodiesel RINs: Common corrective actions, steps for remediation

EcoEngineers often encounters instances of RIN generation or transaction errors during the QAP review process. None of the instances to-date has been a result of fraud. However, even without fraud, RIN generation errors can result in an invalid RIN and they require corrective action. The primary cause of errors in RIN generation is inadvertent administrative error; the secondary cause is inexperience with renewable fuel standard (RFS) requirements. Regardless of the cause, all cases must be corrected in a timely and proper manner for facilities to remain compliant.

Companies who take corrective actions into their own hands may follow improper procedures to correct errors in RIN generations/transactions. This usually makes things worse because the EPA has prescribed specific corrective procedures for each type of error, which must be followed. If the error does not fall into a category in the EPA guidelines, we immediately contact the EMTS support staff with specific details about the transaction to solicit situation specific guidance. We track and analyze all cases of suspected and confirmed RIN generation/transaction errors. We routinely analyze cause, response time, and measures taken to correct and prevent the error from happening again.

The most common error type is over-generation. And administrative errors have been the top cause of over-generation events since the QAP program began. A company must regularly examine its process for RIN generation and recordkeeping to identify areas of improvement and automation. It is imperative to provide comprehensive training in RIN management protocol to new staff in order to control against administrative errors.

The most costly error for a company could be failing fuel quality results. We are seeing a trend in buyers of assigned RINs testing each railcar of fuel purchased prior to accepting title to the fuel. If the fuel fails to meet ASTM specifications, the associated RINs must be retired for the fuel. A returned railcar of off-spec product to a production facility can certainly complicate RIN recordkeeping and the compliance obligations of all parties involved and disrupt production activities. Implementing regular fuel quality testing and sample retention at a production facility is the only way to prevent these types of headaches.

Errors that result in invalid RINs can be costly for a company. Repeated errors raise the perceived risk level of a company to the QAP provider and to downstream RIN buyers. The EPA has set a cap of five over-generation corrective action events per year. If more than five qualifying corrective actions take place, it delays the remediation time for errors and may cause other compliance investigations.

Author: Karyn Jones                                                                                                            

Chief Operations Officer, EcoEngineers                                                      

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