Guidance for Remedial Actions for the Renewable Fuel Standard (RFS)

• Situation 1: Transfer of assigned RINs to incorrect party
• Situation 2: Transfer of assigned RINs with no transfer of renewable fuel
• Situation 3: Missed Separation
• Situation 4: Under Generation
• Situation 5: Over-generation of RINs
• Situation 6: Missed Generation of a RIN Batch

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Situation 1: Transfer of assigned RINs to incorrect party

Party A intends to transfer a volume of renewable fuel with assigned RINs to Party B.
Instead, the volume of renewable fuel ends up with Party C.
Assigned RINs are transferred in EMTS to Party B since it is assumed that the fuel went to Party B.

Problem:

The regulations specify that "an assigned RIN cannot be transferred without simultaneously transferring a volume of renewable fuel to the same party." See 80.1428(a)(3). In addition, the regulations state that "no person shall: transfer to any person a RIN with a K code of 1 without transferring an appropriate volume of renewable fuel to the same person on the same day." See 80.1460(b)(4). Thus, a transfer of assigned RINs without a volume of fuel is a violation under EPA regulations, and Party B may not keep the assigned RINs. In order to mitigate the harm caused by the violation, the parties should take the following remedial actions.

Remedial Actions:

• Action can be taken without prior EPA approval, but parties must notify EPA of remedial actions taken.
• Party B may transfer equivalent RINs to Party A in EMTS and on a Product Transfer Document.
  The RIN and transaction elements that must exactly match the original improper trade are: The PTD must include the statement Remedial Action - No volume of renewable fuel actually transferred., and the new transfer elements are:
  • RIN D Code,
  • RIN year,
  • RIN assignment,
  • Volume of renewable fuel transferred,
  • RIN price
  • Transfer Date,
  • PTD Number (if desired), and
  • Reason Code: Improper Trading Partner (30)
• In addition, Party A must submit a buy transaction (or confirmation) with the same RIN and transaction elements.
• Party A may sell appropriate RINs to Party C using a PTD that refers the original transfer of renewable fuel. Party A may transfer these RINs to Party C after or prior to receiving the RINs back from Party B.
• All parties must maintain documentation and records for this situation and remedial action including, but not limited to:
  • The transactional information for the improper transaction
  • Remedial action buy/sell transactional information
  • Product Transfer Documents
• All parties must notify EPA at the EPA Fuels Programs Support Line of actions taken to remediate the situation. Parties must send the following information in the notification:
  • Company Name
  • EPA company ID
  • The EMTS transaction ID number(s) for the original transaction
  • The EMTS transaction ID number(s) for any remedial action
  • The D code of the RINs affected
  • The number of RINs affected
  • The RIN Year of RINs affected
  • An explanation of how the violation occurred

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Situation 2: Transfer of assigned RINs with no transfer of renewable fuel

Party B accepts assigned RINs from Party A, but no renewable fuel was transferred to Party B.

Problem:

The regulations specify that "an assigned RIN cannot be transferred without simultaneously transferring a volume of renewable fuel to the same party." See 80.1428(a)(3). In addition, the regulations state that "no person shall: transfer to any person a RIN with a K code of 1 without transferring an appropriate volume of renewable fuel to the same person on the same day." See 80.1460(b)(4). Thus, a transfer of assigned RINs without a volume of fuel is a violation under EPA regulations, and Party B may not keep the assigned RINs. In order to mitigate the harm caused by the violation, the parties should take the following remedial actions.

Remedial Actions:

• Action can be taken without prior EPA approval, but parties must notify EPA of remedial actions taken.
• Party B may transfer equivalent RINs to Party A in EMTS and on a Product Transfer Document.
  The RIN and transaction elements that must exactly match the original improper trade are:
  • RIN D Code,
  • RIN year,
  • RIN assignment,
  • Volume of renewable fuel transferred,
  • RIN price
• The PTD must include the statement Remedial Action - No volume of renewable fuel actually transferred., and the new transfer elements are:
  • Transfer Date,
  • PTD Number (if desired), and
  • Reason Code: Remedial Action Incorrect Trade (80)
• In addition, Party A must submit a buy transaction (or confirmation) with the same RIN and transaction elements.
• All parties must maintain documentation and records for this situation and remedial action including, but not limited to:
  • The transactional information for the improper transaction
  • Remedial action buy/sell transactional information
  • Product Transfer Documents
• All parties must notify EPA at the EPA Fuels Programs Support Line of actions taken to remediate the situation. Parties must send the following information in the notification:
  • Company Name
  • EPA company ID
  • The EMTS transaction ID number(s) for the original transaction
  • The EMTS transaction ID number(s) for any remedial action
  • The D code of the RINs affected
  • The number of RINs affected
  • The RIN Year of RINs affected
  • An explanation of how the violation occurred

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Situation 3: Missed Separation

A party has a qualifying RIN separation event pursuant to 80.1429, but neglects to submit the separation information to EPA via EMTS within 5 business days of the separation event.

Problem:

The regulations at 80.1452(c) require that each time a party is involved in a transaction of RINs (buy, sell, separate, or retire) they submit information to EPA via EMTS within 5 business days. Therefore, parties may not separate RINs in EMTS for any renewable fuel blended if separation information was not submitted to EPA via EMTS within 5 days of the qualifying separation event, as required. In order to mitigate the harm caused by the violation, the party should take the following remedial actions.

Remedial Actions:

• Action can be taken without prior EPA approval, but parties must notify EPA of remedial actions taken.
• The party may separate up to 2.5 RINs per gallon of renewable fuel the next time they have a valid separation event pursuant to 80.1429, provided the party submits the separation information to EMTS within 5 days of the separation event as required in 80.1452(c).
• All parties must maintain documentation and records for this situation and remedial action including, but not limited to:
  • The transactional information for the improper transaction
  • Product Transfer Documents
• The party must notify EPA at the EPA Fuels Programs Support Line of actions taken to remediate the situation. The party must send the following information in the notification:
  • Company Name
  • EPA company ID
  • The date of the original RIN separation event
  • The type of separation event and specific regulation covering the event per 80.1429
  • The D code of the RINs affected
  • The number of RINs affected
  • The RIN year of RINs affected
  • An explanation of how the violation occurred

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Situation 4: Under Generation

A party has generated a batch of RINs pursuant to 40 CFR 80.1426, but discovers, within 10 business days of the RIN generation, that they generated too few RINs.

Problem:

The regulations at 80.1426(f) require that number of RINs must be calculated using specific equations and correct values. Therefore, the party did not appropriately generate RINs per 80.1426 when the party incorrectly calculated the number of RINs that should be generated for a batch of renewable fuel. In order to mitigate the harm caused by the violation, the party should take the following remedial actions.

Remedial Actions:

• Action can be taken without prior EPA approval, but parties must notify EPA of remedial actions taken.
• The party may generate the appropriate number of RINs to make up the difference between the initial generation and the number of RINs that should have been generated. This remedial action does not allow parties to generate whole batches that were never generated.
• All RINs generated per this remedial action will have a Batch Number Text in EMTS that begins with UND-, and ends with the original batch number.
• All parties must maintain documentation and records for this situation and remedial action including, but not limited to:
  • The transactional information for the improper transaction
  • Remedial action generation transactional information
  • Product Transfer Documents
• The party must notify EPA at the EPA Fuels Programs Support Line of actions taken to remediate the situation. The party must send the following information in the notification:
  • Company name
  • EPA company ID
  • The date of the original generation
  • The EMTS Transaction ID of the original generation
  • The D code of the RINs affected
  • The number of RINs affected
  • The RIN Year of RINs affected
  • The EMTS Transaction ID of the generation with RIN Batch Number UND
  • An explanation of how the violation occurred

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Situation 5: Over-generation of RINs

A RIN generator produces too many RINS for a volume of fuel

• Broken meter,
• Temperature correction error, or
• Multiple RIN batch generation (different batch numbers, but two batch-RIN generations for one real batch of renewable fuel).

Problem:

Pursuant to 80.1431(a)(1)(ii) and (ix), improperly generated RINs are invalid.

Remedial Actions:

Remedial actions may not be taken for this situation until EPA has been notified and has instructed the parties on what action to take.

The RIN generator must contact EPA Fuels Programs Support Line via e-mail immediately with the details of the improper generation. Remedial actions will be assessed by EPA on a case by case basis. The RIN generator must not take action to remediate the situation until EPA has provided instructions, except that the RIN generator should not sell or transfer any of the RINs associated with that batch and should also notify any purchasers or transferees that received the RINs prior to discovering the over-generation of RINs.

The RIN generator must include the following information:

• Company name;
• EPA company ID;
• The date the fuel was produced;
• The date RINs were generated;
• Number of RINs generated;
• Number of RINs invalidly generated;
• RIN year;
• D codes of generated RINs;
• Batch numbers;
• Transaction ID(s);
• Applicable facility information, including but not limited to: Facility name, EPA assigned facility ID, and address;
• Whether the specific RINs have been sold or if they are still in the RIN generators account
• Times the generator is available to remediate the over-generation
• The sections(s) of 40 CFR Part 80 subpart M that the RIN generator failed to comply with,
• An explanation of how the RIN generator failed to comply RFS2 regulations, and
• Steps taken to prevent this violation from occurring again.

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Situation 6: Missed Generation of a RIN Batch

A party has produced or imported a batch of renewable fuel, but neglects to submit the RIN batch generation information to EPA via EMTS within 5 business days of the RIN assignment.

Problem:

The regulations at 80.1452(b) require that each time a party assigns RINs to a batch of renewable fuel they submit information to EPA via EMTS within 5 business days.

Remedial Actions:

Remedial actions may not be taken for this situation until EPA has been notified and has instructed the parties on what action to take.

The RIN generator must contact the EPA Fuels Programs Support Line via e-mail immediately with the details of the missed generation. Remedial actions must be assessed by EPA on a case by case basis. The RIN generator must not take action to remediate the situation until EPA has provided instructions.

The renewable fuel producer or importer must include the following information:

• Company name;
• EPA company ID;
• The date the fuel was produced;
• Number of RINs that should have been generated;
• D code(s) of RINs that should have been generated;
• QAP code of the RINs (verified or unverified);
• Batch number(s);
• Applicable facility information, including but not limited to: Facility name, EPA assigned facility ID, and address;
• An explanation of how the RIN generator failed to comply with RFS2 regulations; and
• Steps taken to prevent this violation from occurring again.