The EPA has made it publically known (although, most of the industry already knows) that they issued 24 Notices of Violations (NOVs) yesterday to obligated parties for using invalid RINs. See the below EnviroFlash update that just came through. We did briefly speak with EPA about this matter prior to the NOVs being issued. If you have specific questions or concerns, please feel free to contact us.
"On November 7, 2011, the Office of Civil Enforcement (OCE) of the U.S. Environmental Protection Agency (EPA) issued Notices of Violations (NOVs) to 24 companies alleging violations of the Clean Air Act?s Renewable Fuels Standard (RFS) program for using invalid fuel credits known as Renewable Identification Numbers (RINs) for compliance (http://www.epa.gov/compliance/civil/caa/fuel-novs.html). More than 32 million RINs are alleged to be invalid because the company, Clean Green Fuel, LLC (Fuels Programs Company ID 3460 and Facility ID 84000), generated the RINs and neither produced nor imported any renewable fuel whatsoever. Over 18 million of these RINs were used for compliance by the companies that received the NOVs.
With this Enviroflash, EPA's Office of Transportation and Air Quality (OTAQ) is notifying the RFS regulated community that the remaining 14 million RINs still in circulation may be invalid for the same reasons as stated above, and that invalid RINs may not be used for compliance with the RFS program. Pursuant to the RFS regulations, it is also a violation to trade invalid RINs. EPA is investigating whether companies in addition to Clean Green may have created and sold invalid RINs and the extent to which companies in the RFS regulated community may have used them for compliance.
As a reminder, RINs are valid only if they represent qualifying renewable fuel produced or imported for use in the RFS covered program area for the United States. Only valid RINs may be traded or used to show compliance. The EPA neither certifies the validity of RINs, nor does it make any provision for obligated parties who, despite their good faith, purchased invalid RINs. As the EPA explained when it created the RFS program, "an underlying principle of RIN ownership is still one of buyer beware. . ." Therefore, the regulated community is urged to exercise due diligence and use caution when conducting RIN transactions. EPA has provided parties the opportunity to block RINs in EMTS using the renewable producer's company and facility IDs or to lock specific RINs and prevent them from being transferred or used. For more information on using the EMTS "Block List" and locking features, please watch the "Managing the Blocked List" and "Locking RINs" tutorials posted on our web site at -
http://www.epa.gov/otaq/fuels/renewablefuels/emtshtml/emtstutorials.htm."