Modular Systems
What Is a Renewable Identification Number (RIN) – Renewable Fuel Standard
September 29, 2020 Welcome
With increased awareness of the effects of fossil fuel use, environmental litigation has begun to focus more and more on renewable energy. Renewable energy provides an alternative to petroleum-based fuels and has a smaller carbon footprint.
In the US, the Environmental Protection Agency (EPA), mandates the inclusion of a fraction of renewable fuel in the total volume transported across the country.
What Is a Renewable Identification Number?
A renewable identification number (RIN) is a 38-character number used by the EPA to track the compliance of all concerned parties (fuel refiners, blenders, and transporters) with its renewable fuel mandate. An RIN is awarded as a credit when a fuel blender meets the EPA’s renewable volume obligation (RVO) by including a certain amount of renewable fuels in each batch of diesel or gasoline they supply.
The RIN from fuel blenders can be traded to fuel transporters to help meet yearly RIN obligations set by the EPA. This obligation is dynamic and is reflective of the current predictions of US fuel demands. An additional factor that determines the number of RIN credits fuel refiners and importers should have is the EPA’s target for renewable energy for a particular production year.
What Is the Format for An RIN?
Each gallon of renewable fuel produced and distributed within the US is given a 38-character number in the format below.
- RIN format: KYYYYCCCCFFFFFBBBBBRRDSSSSSSSSEEEEEEEE
- K differentiates a RIN that is attached to a gallon from one that is detached
- YYYY: year renewable fuel was produced
- CCCC: Production company’s ID
- FFFFF: Facility/plant ID
- BBBBB: Biofuel batch number
- RR: Biofuel equivalence value
- D: Category the renewable fuel belongs to
- SSSSSSSS: Indicates the start number for the batch of biofuel
- EEEEEEEE: Indicates the end number for the batch of biofuel
What Is the Renewable Fuel Standard (RFS) Program?
The RFS program is a national policy implemented by the EPA under amendments of the Clean Air Act. This program is run in partnership with the U.S Department of Agriculture and the Department of Energy.
The RFS makes it compulsory for energy producers to replace a fraction of their products (petroleum-based transport fuels, jet fuel, and heating oils) with renewable fuel. Acceptable renewable fuels include:
- Cellulosic biofuel
- Advanced biofuel
- Biomass-based diesel
- Total renewable fuel
Types of Renewable Identification numbers
There are four different types of EPA RIN designations for each gallon of fuel supplied within the U.S.
Renewable Fuel RIN (D6)
This is the most basic RIN type with the largest volume inclusion requirement. This RIN is awarded when corn-based ethanol is blended into gasoline.
Advanced Biofuel RIN (D5)
This RIN is gotten when ethanol, biobutanol, or bionaptha derived from sugarcane is mixed into gasoline.
Biomass-Based Diesel RIN (D4)
Biomass RINs are created by blending fuel derived from soybean oil, canola oil, or animal fats into conventional petroleum-based diesel.
Cellulosic Biofuel RIN (D3)
Combining ethanol made from cellulosic materials such as corn waste and wood chips, with gasoline creates a D3 RIN.
Who Is Required to Use RINs?
Under EPA regulations governing the use of RINs, the following categories of market participants are required to use RINs:
- All obligated parties (fuel refiners and importers)
- Renewable fuel producers
- Renewable fuel exporters
- Registered RIN market participants
How Are RIN Transactions Tracked?
The EPA moderated transaction system (EMTS) is an extensive database of all transactions involving RINs. The EMTS platform acts as a middleman between two obligated parties in agreement to trade RINs. Once the EMTS matches a buy and sell record between the two parties, the RINs are transferred accordingly.
Unintended Consequences of the RFS Compliance
Legislature for the Renewable Fuel Standard program was drafted to transition the U.S from dependence on traditional energy types to more environmentally friendly fuels, in a stable manner with consumers bearing the cost of blending subsidy. However, years later its implementation has been less than perfect with a big question mark hanging over how effectively it has achieved its aims.
There is little evidence that end users are bearing the cost of biofuel subsidy rather the financial burden on fuel refiners has soared, according to RealClear Energy, an energy and policy news outlet. The effects are particularly worse on smaller-scale operators who cannot generate adequate RINs to meet the EPA’s requirement and have to purchase them in the open market.
Unless an urgent reform of the EPA’s biofuel mandate is conducted to accommodate smaller scale refineries, they might be forced to shut down their operations. This will lead to an exclusive refining market with little competition for the big industry players and a corresponding surge in pump prices for drivers with diesel or gasoline vehicles.
IFS Can Simplify Your Processes for Fewer Headaches
Compliance with the ever-increasing industry standards can be difficult. IFS reduces the number of process headaches by providing reliable process skid manufacturing for your renewable energy market needs. Our team of engineers has devised a comprehensive line of Engineered-to-Order process skids to help lighten your load.
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