www.fueloilnews.com | FUEL OIL NEWS | AprIL 2014 17
quality of RINs that party will accept.
There are a number of other steps that
can be taken to ensure that quality RINs
are being transacted, starting with side-
stepping any mistakes in management.
Ruggles recommended looking beyond
the name of the producer on the RIN and
delving deeper by examining how the RIN
was produced and whether the producer
has a solid track record in producing
a quality RIN. The RIN from a larger
biodiesel producer may have more value
attached, but that does not mean that
a smaller producer is generating lower-
quality RINs.
Marketing options
A RIN is not marketable until a "sepa-
ration act "occurs,"— meaning the biod-
iesel has been blended with the petro-
leum diesel. The separation act changes
the RIN from assigned to separated, and
then becomes a stand-alone marketable
commodity. This means that the RIN
can be sold. Prior to the separation, the
RIN itself cannot be sold and can only
be moved by being attached to a gallon
of biodiesel.
There are a number of options when
it comes to selling RINs. Let's say you
are a wholesaler and you are just buying
and selling, you are mainly going to pass
the RIN on to the next person. If you are
a jobber or a dealer, you may choose to
acquire the RIN from the producer or
distributor, and after you blend the fuel
you can sell the RIN.
"First, you can use a RIN broker.
Basically, they are clearinghouses that will
do all of the work for you and they charge
a small fee for each RIN handled. You
can also work on your own and sell them;
typically obligated parties and brokers will
purchase them," Ruggles said.
Scharingson adds that some companies
may aggregate their RINs and sell them
directly to the large oil companies and
other obligated parties. In order to do this
the company must set up an account in
the EPA Moderated Transaction System,
which manages RIN transactions.
Quality assurance
In order to help maintain quality and
integrity throughout the RINs program,
the EPA has created a quality assurance
program, simply known as the QAP.
The QAP is a voluntary program and is
intended to help large obligated parties
feel more assured that they are acquiring
qualified RINs. Currently, there are two
temporary programs under the umbrella
of the QAP — QAP-A and QAP-B.
Keeping a watchful eye on RINs from
production to retail is essential at every
level of the biodiesel industry. Whether it's
the producer, jobber or retailer, each com-
pany needs to know what
By Darrin Cline, Two rivers MarkeTing, for renewable energy group
Fuels
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