Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

V. What Acts Are Prohibited And Who Is Liable for Violations?
The prohibition and liability provisions applicable to this proposed RFS program
would be similar to those of other gasoline programs. The proposed rule identifies
certain prohibited acts, such as a failure to acquire sufficient RINs to meet a party’s
renewable fuel obligation (RVO), producing or importing a renewable fuel that is not
assigned a proper RIN, creating or transferring invalid RINs, or transferring RINs that are
not identified by proper RIN numbers. Any person subject to a prohibition would be held
liable for violating that prohibition. Thus, for example, an obligated party would be
liable if the party failed to acquire sufficient RINs to meet its RVO. A party who
produces or imports renewable fuels would be liable for a failure to assign proper RINs to
batches of renewable fuel produced or imported. Any party, including an obligated party,
would be liable for transferring a RIN that was not properly identified.
In addition, any person who is subject to an affirmative requirement under the
RFS program would be liable for a failure to comply with the requirement. For example,
an obligated party would be liable for a failure to comply with the annual compliance
reporting requirements. A renewable fuel producer or importer would be liable for a
failure to comply with the applicable batch reporting requirements. Any party subject to
recordkeeping or product transfer document requirements would be liable for a failure to
comply with these requirements. Like other EPA fuels programs, the proposed rule
provides that a party who causes another party to violate a prohibition or fail to comply
with a requirement may be found liable for the violation.
The Energy Act amended the penalty and injunction provisions in section 211(d)
of the Clean Air Act to apply to violations of the renewable fuels requirements in section
211(o). 38 Accordingly, under the proposed rule, any person who violates any prohibition
or requirement of the RFS program may be subject to civil penalties for every day of each
such violation and the amount of economic benefit or savings resulting from the
violation. Under the proposed rule, a failure to acquire sufficient RINs to meet a party’s
renewable fuels obligation would constitute a separate day of violation for each day the
violation occurred during the annual averaging period.
As discussed above and in Section III.D, the regulations would prohibit any party
from creating or transferring invalid RINs. These invalid RIN provisions would apply
regardless of the good faith belief of a party that the RINs were valid. These enforcement
provisions are necessary to ensure the RFS program goals are not compromised by illegal
conduct in the creation and transfer of RINs.
As in other motor vehicle fuel credit programs, the regulations would address the
consequences if an obligated party was found to have used invalid RINs to demonstrate
compliance with its RVO. In this situation, the refiner or importer that used the invalid
RINs would be required to deduct any invalid RINs from its compliance calculations.
38 Sec. 1501(b) of the Energy Policy Act of 2005.
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