SUPPORTING STATEMENT FOR 

RENEWABLE FUELS STANDARD (RFS2) VOLUNTARY RIN QUALITY ASSURANCE 

PROGRAM (PROPOSED RULE)

A. JUSTIFICATION

1. Identification of the Information Collection

a. Title: RFS2 Voluntary RIN Quality Assurance Program, EPA ICR No. xxxx.xx, OMB 

Control Number xxxx-NEW.

b. Short characterization:

The Renewable Fuel Standard (RFS) program began in 2006 pursuant to the requirements 

in Clean Air Act (CAA) section 211(o) which were added through the Energy Policy Act of 2005 

(EPAct). The statutory requirements for the RFS program were subsequently modified through 

the Energy Independence and Security Act of 2007 (EISA), resulting in the promulgation of 

major revisions to the regulatory requirements on March 26, 20101. 

The RFS program requires that specified volumes of renewable fuel be used as 

transportation fuel, heating oil, and/or jet fuel each year. To accomplish this, EPA publishes 

applicable percentage standards annually that apply to the sum of all gasoline and diesel 

produced or imported. The percentage standards are set so that if every obligated party meets the 

percentages, then the amount of renewable fuel, cellulosic biofuel, biomass-based diesel, and 

advanced biofuel used will meet the volumes required on a nationwide basis. 

Obligated parties demonstrate compliance with the standards through the acquisition of 

unique Renewable Identification Numbers (RINs) assigned by the producer or importer to every

batch of renewable fuel produced or imported. Validly generated RINs show that a certain 

volume of qualifying renewable fuel was produced or imported. The RFS program also includes 

provisions stipulating the conditions under which RINs are invalid, the liability carried by a party 

that transfers or uses an invalid RIN, and how invalid RINs must be treated.

The RIN system within the RFS program contains unique features that make it more 

challenging for the obligated parties that need RINs for compliance purposes to verify that those 

RINs have been validly generated. Several cases of fraudulently generated RINs have compelled 

some obligated parties to limit their business relationships to only those parties that appear most 

trustworthy. This reaction by the obligated parties has made it more difficult for smaller 

renewable fuel producers to sell their RINs and has reduced the overall liquidity of the RIN 

market. In order to ensure that RINs are validly generated, individual obligated parties are now 

conducting their own audits of renewable fuel production facilities, potentially duplicating one 

another's efforts. These circumstances have created inefficiencies in the RIN market, prompting 

 

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75 FR 14670
requests for an additional regulatory mechanism that would reduce the risk of potentially invalid 

RINs, return liquidity to the RIN market, and reduce the cost of verifying the validity of RINs.

In this action we are proposing a voluntary quality assurance program intended to provide 

a more structured way to assure that the RINs entering commerce are valid. The proposed 

program would also provide an affirmative defense against violations under certain conditions 

for the transfer or use of invalid RINs, and would specify both the conditions under which 

invalid RINs must be replaced with valid RINs, and by whom. The voluntary program would 

enable smaller renewable fuel producers to demonstrate that their RINs are valid, reducing the 

risk that obligated parties believe is associated with such RINs.

The voluntary quality assurance program for RINs would provide a means for regulated

parties to ensure that RINs are properly generated, through audits of production facilities 

conducted by independent third parties using quality assurance plans (QAPs). To this end, we 

are proposing the following:

• Minimum requirements for QAPs, including such things as verification of type of 

feedstocks, verification that volumes produced are consistent with amount of 

feedstocks processed, and verification that RINs generated are appropriately

categorized and match the volumes produced

• Qualifications for independent third-party auditors

• Financial instruments that would provide assurance than invalid RINs are replaced 

with valid RINs

• Requirements for audits of renewable fuel production facilities, including minimum 

frequency, site visits, review of records, and reporting

• Changes to EMTS that would accommodate the quality assurance program

We are proposing a number of options that would be available to regulated parties 

seeking to verify that RINs are validly generated. These options would provide flexibility in 

how parties choose to balance the risk of transferring or using invalid RINs and costs. We 

believe that the costs associated with this voluntary quality assurance program are warranted to 

ensure the viability of the renewable fuel and RIN markets. This cost assessment includes the 

cost of performing audits, to both the fuel producer and the auditor, the added costs of the 

financial instruments which some RIN producers and verifiers may choose, and the cost to the 

Agency in implementing this program.

There are approximately 485 biofuel producers operating more than 600 biofuel 

production facilities. These numbers are expected to increase as the biofuel market expands. 

While it is unlikely that all biofuel producers will opt to implement a QAP, that was the 

assumption for these cost estimates in order to reflect the maximum potential cost of the 

program.
2. Need For, and Use of, the Collection

a. Authority for the Collection

Sections 114 and 208 of the Clean Air Act (CAA), 42 U.S.C. §§ 7414 and 7542, 

authorize EPA to require recordkeeping and reporting regarding enforcement of the provisions of 

Title II of the CAA. 

b. Practical Utility/Uses of the Data

The recordkeeping and reporting requirements of this regulation will allow EPA to 

monitor compliance with the RFS program. The quality assurance program would help to ensure 

that the RIN system operates as originally intended. The primary impacts of the quality

assurance program would be improved liquidity in the RIN market and improved opportunities 

for smaller renewable fuel producers to sell their RINs. The data generated by the QAP program 

will assist obligated parties and smaller renewable fuel producers comply with the requirements 

of the RFS program by supporting the validity of RINs.

The quality assurance program that we are proposing would be voluntary. As a result, 

there would be no obligatory costs. There would be costs associated with an individual party's 

participation in the quality assurance program, and in Section XX we have provided estimates of 

the costs of participation. These estimates are supported by data provided by several potential 

QAP vendors. It is worthwhile to note that, as this is a voluntary program intended to support a 

current market system, any costs incurred would only be borne if the industry believed that those 

costs were less than current costs in the marketplace resulting from efforts to verify, acquire, and 

trade RINs. 

3. Non-duplication, Consultation, and other Collection Criteria

a. Non-duplication

Efforts have been made to eliminate duplication in this information collection. The QAP 

may substitute for data previously required in RFS data collection and reporting regulations.

b. Public Notice

We are describing the proposed recordkeeping and reporting in the notice of proposed 

rulemaking and are providing this draft supporting statement in order to assist parties potentially

affected by RFS2 Voluntary Quality Assurance Program to comment upon recordkeeping and 

reporting burdens. 

c. Consultations
We have met with seven (7) parties who are already developing RIN validation programs 

for the biofuels industry. We have also met with several industry groups and obligated parties 

which have been affected by RIN fraud. These parties all provided informal estimates of the 

costs associated with this type of quality assurance program which was used to inform the cost 

calculations made for this statement.

d. Effects of Less Frequent Data Collection

We have designed the reporting schedule to coincide with existing reporting deadlines 

applicable to many of the same parties under such programs as RFG and anti-dumping and diesel

fuel. Because this is a quality assurance program, more frequent data collection is more likely to 

ensure the validity of the RINs audited. The program is structured to allow the market to balance 

the benefits of the program with the costs. Less frequent collection of data would jeopardize the 

validity of audited RINs and would negatively impact the entire RIN market. 

e. General Guidelines

All Office of Management and Budget (OMB) guidelines are met.

f. Confidentiality

We inform respondents that they may assert claims of business confidentiality (CBI) for 

information they submit. We have proposed that actual RINs should not be treated as 

confidential business information under RFS2, as they are necessary identifiers to accompany

renewable fuels. In order to ensure transparency in the RIN validation program, as much of the 

associated data as possible should be made publicly accessible. Any information claimed as 

confidential will be treated in accordance with 40 CFR Part 2 and established Agency

procedures. Information that is received without a claim of confidentiality may be made 

available to the public without further notice to the submitter under 40 CFR § 2.203.

g. Sensitive Information

This information collection does not require submission of any sensitive information.

4. The Respondents and the Information Requested

a. Respondents/with NAICS and SIC Codes

The respondents to this information collection fall into the following general industry categories: 

petroleum refineries (324110/2911), ethyl alcohol manufacturers (325193/2869), other basic 

organic chemical manufacturing (325110/2869), chemical and allied products merchant 

wholesalers (426990/5169), petroleum bulk stations and terminals (422710/5171), petroleum and 

petroleum products merchant wholesalers (422720/5172), and other fuel dealers (454319/5989). 

b. Information Requested
For those biofuel producers who opt into the QAP, each biofuel production facility must 

be visited and assessed as part of any audit conducted under the proposed quality assurance 

program. An auditor would use an approved QAP as the basis for the verification of biofuel 

produced and RINs generated at a facility. In order to verify production, the auditor must 

conduct site visits, review documents, and contact entities that do business with the facility. The 

proposed components of audits are discussed below.

Elements of a QAP Audit:

 Physical Examination of Facility and Operations

The goal of the onsite visit is to verify that plant has the technology to produce, store, and 

blend biofuels at registered levels. The auditor will likely use plant maps and photos as 

part of this analysis, and should compare and contrast the plant’s infrastructure with the 

third party engineering review reports on file with EPA. The auditor should note the size 

and number of storage and blending tanks, and observe the measurement of volume in the 

tanks. The auditor should determine whether the process rate is consistent with annual 

production of the facility, and whether the facility has quality process controls in place.

We believe that mass and energy balances on the facility are critical components of any

audit. Because integrated facilities will likely have energy usage that is not directly

related to biofuel production, the auditor should have alternate means of assessing and 

correlating energy usage to production.

 Document Review

The auditor should ensure that the producer has and is fulfilling the EPA record-keeping 

requirements at §80.1454(c)(1)(i)(A)-(B) and (ii). We expect the auditor to evaluate 

reports submitted to EPA, and propose that these be reports year-to-date, as applicable, 

and from the previous year, for comparison. These include Activity Reports, RIN 

transaction reports, RIN generation reports, and Renewable Fuel producer Co-product 

reports. The third-party engineering review and annual attestation report should also be 

reviewed. 

Reports submitted to EPA should be cross-checked with other records. For instance, the 

auditor should have access to certificates of analysis for all batches of feedstocks. The 

auditor might consider spot-checking recent feedstock receipts (if the producer uses a 

variety of feedstocks, then the auditor should be provided with receipts for each 

feedstock). Integrated facilities may not have internal sales receipts for feedstock usage, 

so an alternative paper trail will likely be required. Similar to the feedstock document 

review and crosscheck, renewable fuel and co-product delivery documentation should be 

part of any audit. 

 Review and Reporting
We expect the auditor to contact the biofuel producer’s customers and suppliers in order 

to verify sales and purchases. This will likely require ongoing monitoring of the biofuel 

production facilities by auditor staff or consultants. In addition, auditors are likely to 

need to track RINs on EMTS. This will ensure that the verified RINs are being reported 

accurately. Auditors will be responsible for preparing the QAP and submitting it to EPA. 

5. The Information Collected, Agency Activities, Collection Methodology, and Information 

Management

a. Agency Activities

 Respond to inquiries on QAP requirements and options

 Provide copies of the regulations

 Acknowledge receipt of qualifying QAPs

 Assist EMTS users with new functions in system related to QAPs

 Refer violations to enforcement personnel

 Contact reporting parties if there is a problem with their submission

b. Collection and Methodology and Management

We anticipate receiving data in a simplified and secure fashion via the Agency's CDX. 

Information claimed as CBI will be stored in appropriately controlled areas. Auditors will 

collect data in a wide variety of ways, as is appropriate to the specific production facility, as 

indicated in the Information Collected section above. Many of the auditors consulted plan to use 

electronic, remote sensing, and web-based systems to make data collection as efficient as 

possible.

c. Small Entity Flexibility

This collection will not adversely affect small entities. The notice of proposed 

rulemaking describes flexible provisions available to small entities. This program was 

specifically designed with the small biofuel producer in mind, as they have been the most 

negatively impacted by the RIN fraud to date.

d. Collection Schedule

We are proposing that an auditor conduct at least four (4) onsite visits per year, or every 

three (3) months. We are proposing that new production facilities should be audited before 

startup and, subsequently, according to the standard quarterly schedule. We expect that each visit 

could take from one to several days, depending on the size and complexity of the facility, the 

availability of records, changes since the last audit, etc. For some components of the audit we 

propose to require real-time, or batch-level monitoring. The QAP would be required to provide 

details of the means for collection and evaluation of the data collected in real-time.
6. Estimating the Burden and Cost of Collection

a. Estimating the Respondent Universe 

We based our estimated respondent numbers on the number of registered biofuel 

producers and facilities in EMTS. In order to estimate the maximum cost of this data collection 

request, we assumed that all parties would opt to use the QAP. It is highly unlikely that all 

biofuel producers will make this choice, and therefore the costs will in reality to be lower than 

those estimated here. Note that the costs are expected to be linear; i.e. there are no economies of 

scale assumed, based on the number of respondents. 

b. Estimating the Respondent Burden and Cost

Three labor categories are involved: managerial, technical/professional, and clerical. The 

estimates use the Bureau of Labor Statistics mean average wages for relevant employee 

categories (May 2011). The following wages and benefits apply by category:

Wages and Benefits

Managerial $55.04 per hour

Technical $47.81 per hour

Clerical $18.35 per hour

Doubling for company overhead beyond wages and benefits, and for convenience, rounding up 

to the dollar, gives the following rates for this ICR:

Total Employer Cost

Managerial $110 per hour

Technical $96 per hour

Clerical $37 per hour

We have estimated the amount of time needed for each labor category, and for each expected 

step in the QAP development process. These time estimates are shown in the attached Excel 

spreadsheet.

c. Estimating the Agency Burden and Cost 

EPA must check each QAP submission for completeness. EPA will be reviewing the 

qualifications of the QAP providers. Reporting parties must be contacted if there is a problem 

with their submission. It is anticipated that the QAP will require minimal additional burden and 

cost on EPA, relatively to the effort already undertaken for previous RFS reporting requirements.

This supporting statement considers costs associated with accepting QAP submissions. 

We anticipate that each QAP will require just 2 hours of review by one full time GS-13 technical 

employee at a current pay rate of $44.65 per hour. Doubled to account for overhead and 
benefits, the hourly agency burden is estimated at $89. These costs are included in Excel 

spreadsheet.

 

d. Estimating the Respondent Universe

We were able to estimate the number of regulated entities drawing upon experience 

regulating the same or similar entities. The maximum number of respondents for this program 

was estimated using the current number of producers registered in EMTS. It is unlikely that all 

biofuel producers will choose to utilize the QAP, in which case the number of respondents would 

be less then the number assumed here.

e. Bottom Line Burden Hours and Costs

We estimate the following totals:

TOTAL NO. OF RESPONDENTS: 485

TOTAL BURDEN HOURS: 194,670

TOTAL COST TO RESPONDENTS: $ 4,062,000

f. Reason for Change in Burden

The change in burden is due to proposed regulations that allow additional RFS reporting.

g. Burden Statement 

The annual public reporting and recordkeeping burden for this collection of information 

is shown in the attached Excel spreadsheet. Burden means the total time, effort, or financial 

resources expended by persons to generate, maintain, retain, or disclose or provide information 

to or for a Federal agency. This includes the time needed to review instructions; develop, 

acquire, install, and utilize technology and systems for the purposes of collecting, validating, and 

verifying information, processing and maintaining information, and disclosing and providing 

information; adjust the existing ways to comply with any previously applicable instructions and 

requirements; train personnel to be able to respond to a collection of information; search data 

sources; complete and review the collection of information; and transmit or otherwise disclose 

the information. An agency may not conduct or sponsor, and a person is not required to respond 

to, a collection of information unless it displays a currently valid OMB control number. The 

OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. 

To comment on the Agency's need for this information, the accuracy of the provided 

burden estimates, and any suggested methods for minimizing respondent burden, including the 

use of automated collection techniques, EPA has established a public docket for this ICR under 

Docket ID number EPA-HQ-OAR-2005-0161, which is available for online viewing at 

www.regulations.gov, or in person viewing at the Air Docket in the EPA Docket Center in 

Washington, DC (EPA/DC). The docket is located in the EPA West Building, 1301 Constitution 

Avenue, NW, Room 3334, and is open from 8:30 a.m. to 4:30 p.m., Eastern Standard Time, 
Monday through Friday, excluding legal holidays. The telephone number for the Reading Room 

is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742. 

You may use www.regulations.gov to submit or view public comments, access the index 

listing of the contents of the public docket, and to access those documents in the public docket 

that are available electronically. When in the system, select “search,” then key in the Docket ID 

Number EPA-HQ-OAR-2005-0161. Also, you can send comments to the Office of Information 

and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, 

D.C. 20503, Attention: Desk Officer for EPA. Please include the EPA Docket ID Number EPAHQ-OAR-2005-0161 and OMB Control Number 2060-NEW in any correspondence.