Opinion ID: 6317007
Heading Depth: 3
Heading Rank: 2

Heading: Renewable Identification Numbers

Text: After the obligated parties have been identified and their percentage standards have been set, there remains the matter of compliance. For every gallon of renewable fuel entering the U.S. market, producers and importers may generate a set of “Renewable Identification Numbers.” 40 C.F.R. §§ 80.1426, 80.1429(b). The number of RINs assigned to each batch corresponds to the amount of ethanol-equivalent energy per gallon in that batch. See id. § 80.1415. RINs remain attached to the renewable fuel until that fuel is purchased by an obligated party or blended into fossil fuels to be used for transportation fuel. At that point, the RINs become “separated,” meaning they are, in 3 Appellate Case: 19-9532 Document: 010110648841 Date Filed: 02/23/2022 Page: 4 effect, a form of compliance credit. A RIN may be used to demonstrate compliance during the calendar year it was generated, or the following calendar year, and thereafter is considered expired and cannot be used for compliance purposes. Id. §§ 80.1427(a)(6), 80.1428(c), 80.1431(a). Each year, obligated parties must generate or purchase enough RINs to meet their renewable fuel obligations—which they then satisfy by “retir[ing]” RINs in an annual compliance demonstration to the EPA. Id. § 80.1427(a). This system gives obligated parties flexibility in demonstrating compliance by allowing them to generate RINs in several manners: producing renewable fuel on their own for use in the United States, purchasing and blending renewable fuels themselves, or purchasing RINs reflecting renewable fuel volumes blended by other entities. 72 Fed. Reg. at 23,900, 23,942 (May 1, 2007). Obligated parties who have more RINs than they need may sell or trade their excess or they may “bank” those RINs for use to meet up to twenty percent of their obligations for the following compliance year. See 42 U.S.C. § 7545(o)(5)(B); 40 C.F.R. §§ 80.1425–29; 80 Fed. Reg. at 77,485 (Dec. 14, 2015). This system is predicated on the premise of empowering the renewable fuel market to operate “according to natural market forces,” allowing obligated parties a means to comply with the standards in the most economically efficient way by avoiding, if they wish, expenditures on infrastructure or changes in blending practices. See 72 Fed. Reg. at 23,904, 23,908, 23,930, 23,933 (May 1, 2007). 4 Appellate Case: 19-9532 Document: 010110648841 Date Filed: 02/23/2022 Page: 5