EPA sets final rule for biofuel blending

The Environmental Protection Agency (EPA) has published a final rule (40 CFR Part 80) that finalizes regulations designed to ensure that refiners, blenders, and importers of gasoline will use enough renewable fuel each year so that the total volume requirements of the Energy Policy Act are met, according to information published in the Federal Register May 1.

The program will be based on the use of unique renewable identification numbers (RINs) assigned to batches of renewable fuel by renewable fuel producers and importers. These RINs can then be sold or traded, and ultimately used by any obligated party to demonstrate compliance with the applicable standard.

Companies expected to be covered by the rule include those involved with the production, distribution, and sale of gasoline motor fuel or renewable fuels such as ethanol and biodiesel. Regulated categories and entities could include petroleum refineries, ethyl alcohol manufacturing, other basic organic chemical manufacturing, chemical and allied products merchant wholesalers, petroleum bulk stations and terminals, petroleum and petroleum products merchant wholesalers, and other fuel dealers.

The regulations establish the RIN trading program that will be an integral aspect of the overall program, allowing renewable fuels to be used where they are most economical while providing a flexible means for obligated parties to comply with the standard.

EPA is to establish a renewable fuel standard annually, expressed as a percentage of gasoline sold or introduced into commerce, that will ensure that overall a specified total national volume of renewable fuels will be used in gasoline in the United States. The legislation that led to the regulation does not require each obligated party to necessarily do the blending themselves in order to comply with this obligation. Rather, under the credit trading program required, each obligated party is allowed to satisfy its obligations either through its own actions or through the transfer of credits from others who have more than satisfied their individual requirements.

Penalties that apply include:

•Any person who is liable for a violation is subject to a civil penalty of up to $32,500 for every day of each such violation and the amount of economic benefit or savings resulting from each violation,

•Any person liable for a violation of for failure to meet a renewable volume obligation, or for causing another party to fail to meet a renewable volume obligation, during any averaging period, is subject to a separate day of violation for each day in the averaging period.

•Any person liable for failure to meet, or causing a failure to meet, a requirement of any provision of this subpart is liable for a separate day of violation for each day such a requirement remains unfulfilled.

The final rule becomes effective September 1, 2007.

To see the rule in its entirety, click here.

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