On Jan. 31 the U.S. EPA published a proposed rule that creates a structured process for buyers of renewable identification numbers (RINs) to verify their validity. Under the proposal, the EPA said that RINs would be verified through a new voluntary quality assurance program that includes alternative compliance options. Members of the public will be able to weigh in on the proposal during a 30-public comment period.

According to the EPA, the proposed program would provide an affirmative defense against liability for civil violations under certain conditions for the transfer or use of invalid RINs for RINs that have been verified according to an approved quality assurance program. The proposal also specifies the conditions under which invalid RINs must be replaced with valid RINs, and the party responsible for replacing them. In addition, the proposal includes modifications to the exporter provisions of the renewable fuel standard  (RFS) program that aim to ensure appropriate RINS are retired when fuel is exported. The proposed rule also includes provisions designed to address RINs that become invalid downstream from the biofuel producer.

The proposal includes six major provisions, including:

- The establishment of minimum requirements for quality assurance programs

- Qualifications for independent third-party auditors

- Audit requirements for biorefineries

- The establishment of conditions under which regulated parties would have an affirmative defense against liability for civil violations for using or transferring invalid RINs

- Identifying parties responsible for replacing invalid RINs

- Mechanisms to assure invalid RINs are replaced with valid RINs

Growth Energy has announced it is pleased to see the EPA is moving forward with a program to address concerns related to RIN integrity. “We look forward to reviewing the proposal and will work with EPA to ensure that the program is successful,” said Growth Energy CEO Tom Buis.

The Renewable Fuels Association also spoke out in support of the program. “We're encouraged that EPA has proposed a voluntary mechanism for obligated parties to assure the RINs they are using for compliance actually reflect a gallon produced,” said RFA President and CEO Bob Dinneen. “It addresses a major concern oil companies have raised regarding biodiesel RINs and assures the overall integrity of the RFS program. It is important to note that there have been no incidents of RIN fraud with ethanol gallons produced for the RFS in large part because ethanol producers generally do not separate the RINs from the gallons they produced, as is the case with other biofuels.”