EPA is proposing - Petroleum Equipment Institute

III.What are the Major Elements of the Program Required Under EISA?While EISA made a number of changes to CAA section 211(o) that must bereflected in the RFS program regulations, it left many of the basic program elementsintact, including the mechanism for translating national renewable fuel volumerequirements into applicable standards for individual obligated parties, requirements for acredit trading program, geographic applicability, treatment of small refineries, andgeneral waiver provisions. As a result, we propose that many of the regulatoryrequirements of the RFS1 program would remain largely or, in some cases, entirelyunchanged. These provisions would include the distribution of RINs, separation of RINs,use of RINs to demonstrate compliance, provisions for exporters, recordkeeping andreporting, deficit carryovers, and the valid life of RINs.The primary elements of the RFS program that we propose changing toimplement the requirements in EISA fall primarily into the following five areas:1) Expansion of the applicable volumes of renewable fuel2) Separation of the volume requirements into four separate categories ofrenewable fuel, with corresponding changes to the RIN and to theapplicable standards3) Changes to the definition of renewable fuels and criteria for determiningwhich if any of the four renewable fuel categories a given renewable fuelis eligible to meet4) Expansion of the fuels subject to the standards (and applicable to refiners,blenders, and importers of those fuels) to include diesel and certainnonroad fuels5) Inclusion of specific types of waivers and EPA-generated credits forcellulosic biofuel.EISA does not change the basic requirement under CAA 211(o) that the RFSprogram include a credit trading program. In the May 1, 2007 final rulemakingimplementing the RFS1 program, we described how we reviewed a variety of approachesto program design in collaboration with various stakeholders. We finally settled on aRIN-based system for compliance and credit purposes as the one which met our goals ofbeing straightforward, maximizing flexibility, ensuring that volumes are verifiable, andmaintaining the existing system of fuel distribution and blending. RINs represent thebasic framework for ensuring that the statutorily required volumes of renewable fuel areproduced and used as transportation fuel in the U.S. The use of RINs is predicated on thefact that once renewable fuels are produced or imported, there is very high confidencethat, setting aside exports, all but de minimus quantities will in fact be used astransportation fuel in the U.S. Focusing on production of renewable fuel as a surrogatefor the later actual blending and use of such fuel has many benefits as far as streamlining43