In general, we believe that most RFS program participants will know at the beginning of the compliance year the nature of their business activities for the upcoming compliance period, and therefore will not need to worry about the impact of changing roles and responsibilities mid-way through the compliance period. However, we understand that there may occasionally be parties that did not anticipate becoming obligated parties at some point during the compliance period but, in fact, do so.
Obligated parties must separate all RINs that they receive with purchased renewable fuel, and they may separate, up to their Renewable Volume Obligation (RVO), RINs that they generate for renewable fuel which they have imported or produced. Other parties regulated under the RFS, such as renewable fuel producers, importers, and marketers, do not have the same obligations. Therefore, if a non-obligated party should become an obligated party mid-way through a compliance period without having anticipated that such a change of status would occur, the question arises as to how that party should handle RINs both before and after their change of status.
EPA believes that a party who is unsure whether or not they will become an obligated party (e.g., by importing gasoline during the compliance period) should not act as an obligated party (e.g., by separating RINs from renewable fuel) unless and until they know for certain that they will become an obligated party. In this way, if the party does not become an obligated party during the compliance year, they will not be in violation of the RFS regulations that prohibit non-blenders and non-obligated parties from separating RINs from renewable fuel (Sec. 80.1128(a)(2)). On the other hand, if a party is uncertain that they will become an obligated party during the compliance period, they will not be subject to the requirements associated with being an obligated party (e.g. the requirement to separate RINs) until they are certain of that status during the compliance period.
However, once a party is certain that they will engage in activities that will make them an obligated party within the compliance period, they should assume the obligations and requirements associated with obligated party status for the remainder of the compliance period. If a party acts as an obligated party throughout the compliance period (e.g., separating RINs with purchased renewable fuel), that party will be in violation of the RFS regulations unless , at some time during the reporting period, they meet the definition of an obligated party.
This Question and Answer was originally posted at: Questions and Answers on the Renewable Fuel Standard Program (PDF) (59 pp, 228 K, EPA420-F-08-006, April 2008, About PDF)