U.S. Environmental Protection Agency

 January 17, 2011

Submitted via electronic mail to:

John Weihrauch, Weihrauch.John@epamail.epa.gov

Jeff Kodish, Kodish.Jeff@epamail.epa.gov

Karl Simon, simon.karl@epa.gov

Paul Machiele, Machiele.Paul@epamail.epa.gov 

RE: RFS2 Date of RIN Transfer

Dear Mr. Weihrauch, Mr. Kodish, Mr. Simon, and Mr. Machiele:

Thank you for your continued interest in resolving the important issue of EMTS RIN transaction 

reporting for RFS2 compliance. 

As a follow-up to our letters of July 31, 2010 and December 14, 2010 (attached), and in response to the 

EPA request during our recent teleconference on January 13, 2011, this letter explains how the integrity 

of the EMTS process would be compromised if the EPA decides to retain the renewable fuel title transfer 

date as the sole means of substantiating a RIN transaction. 

To best understand why this issue is so important to such a wide range of regulated parties under RFS2, it 

is useful to give a brief summary of how the regulated parties’ systems evolved to where they are today. 

Under RFS1, EPA had a very similar requirement for specifying the RINs transfer date. As the 

implementation of RFS1 approached, a group of representatives from regulated industries worked with 

EPA to address this major impediment to the seamless flow of information. Whether the appropriate 

EPA personnel were involved in the decision or not, EPA agreed that the regulations allowed the use of 

the invoice date as the RINs transfer date, provided that both parties used the same date to memorialize 

the transaction. Over the past 3 years, almost every accounting/RINs processing system used by the 

regulated industries has been built to work off of the invoice date, as is evident by the intense interest and 

alignment of the overwhelming majority of regulated/obligated parties on this issue. It is noteworthy that 

the issue at hand was not discussed in EPA’s Notice of Proposed Rulemaking for RFS2 because EPA’s 

proposed wording was left virtually identical to that of RFS1 on this matter and no indication was given 

that EPA would reverse its longstanding allowance of the invoice date.

It is also important for EPA to understand that the information EMTS requires for a RIN transaction is 

mostly in the exclusive possession of the renewable fuel seller. For this reason, regulated parties have set 

up EMTS reporting systems based on seller-initiated transactions. Any resolution to the RIN transfer 

date issue needs to support the continuation of seller-initiated transactions. 

With this background in mind, the resolution of the RIN transfer date is critical to the continued success 

of the current EMTS entry system. The seller-initiated, invoice- based accounting systems cannot work 

efficiently with the renewable fuel title transfer date because that date is unknown to the seller in most 
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cases, and is unknown on a real-time basis even to the buyer in many cases. In order to accommodate the 

use of the actual title transfer date, a new business process and significant system changes would be 

necessary across the industry. Aside from the considerable expense and burden involved in making these 

conversions, we believe there will be some fundamental changes in the quality of the inputs into EMTS, 

as explained below.

 In most cases, without the use of the invoice date or some approximate date as proposed, no 

single trading partner possesses enough information to generate a RINs trade in EMTS. 

Title transfer for much of the renewable fuel transactions occurs upon delivery of the product as 

opposed to the point a bill of lading is generated. While tools exist to approximate the exact 

timing of delivery, per our proposal to EPA in our earlier letters, none of them short of the 

buyer’s receiving terminal records would identify the actual fuel title transfer date. The buyer of 

the renewable fuel would have to assemble the receipt dates of the renewable fuel and transmit 

that information to the renewable fuel seller so the seller has the final piece of data it needs to 

generate the EMTS trade. It is likely that every buyer and seller in the industry would devise a 

separate process for capturing and transmitting this information, and that in some cases, it could

even be unique to each terminal receiving product for a buyer since the third-party storage

facilities will have their own distinct process for relaying the information back to the inventory 

holder. (And as mentioned above, beyond the transfer date, the buyers do not possess most of the 

information an EMTS entry requires.) The additional layer(s) of communication between people 

and systems before the data is introduced into EMTS will most likely result in a larger number of 

errors in the trades submitted to EMTS and potentially unavoidable delays in the information 

being received by EMTS. As the EPA is fully aware, even a small decrease in accuracy can have

major effects on the number of transactions that would be impacted in EMTS. 

 The completeness of quarter-end reporting would be further complicated by the higher 

number of unmatched trades in EMTS. There is a known discrepancy between EMTS and 

RFS2 in that the quarterly and annual reports in EMTS work from the date EMTS trades are 

matched instead of the date the counterparties transferred the RINs and renewable fuels. 

Admittedly, this situation does not create a material discrepancy in the reporting because of the 

tight requirements EPA has on the timeliness of reporting and matching trades. The significance 

of this discrepancy, however, is directly correlated to the number of unmatched trades within 

EMTS (and the number of un-submitted transactions outside of EMTS), and will grow as it takes 

regulated parties longer to synchronize the information between themselves.

EPA mentioned during the January 13, 2011 conference call that extending the same allowance for RINs

Transfer Date under RFS2 as was provided under RFS1 would complicate enforcement efforts. The 

industry is not aware of how the proposed technical amendment could create opportunities for abuse of 

the system or create significant additional complexity around enforcement. We believe that such 

problems will be prevented by the fact that both buyer and seller would use the same transfer date 

methodology for any given transaction, which (by definition) has to match in EMTS. If EPA knows of 

specific instances or examples that raise concerns about enforcement, we would appreciate discussing 

them so we can arrive at a mutually agreeable solution. 
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EPA has stated repeatedly that it does not wish to interfere with existing business accounting practices.

This can be accomplished by allowing the requested flexibility, and we respectfully ask EPA to 

reconsider offering our proposed technical amendment for proposed rulemaking.

We look forward to discussing and resolving this issue with you in the near future. Thank you very much 

for your consideration.

Sincerely, 

Geoff Cooper 

Renewable Fuels Association 

Greg Krissek 

Growth Energy 

Patrick Kelly

American Petroleum Institute

Tim Hogan

National Petrochemical and Refiners 

Association

cc: 

Tony Miller, Miller.Anthony@epa.gov 

David Korotney, Korotney.David@epa.gov 

Paul Argyropoulos, Argyropoulos.Paul@epamail.epa.gov 

Chet France, France.Chet@epamail.epa.gov