RFS2 Registration Requirements: What All Ethanol Producers Need to Know Updated May 10, 2010 Legal Disclaimer: This document is intended for informational use only and does not constitute legal advice. Please consult legal counsel and the U.S. Environmental Protection Agency with specific legal questions regarding registration of each individual facility. Copyright 2010 Renewable Fuels Association. All Rights Reserved.
Table Of Contents Page 3 Page 4 Page 8 Page 18 Page 22 Letter from RFA President Bob Dinneen Summary Checklist for Conventional Ethanol Production Registration Requirements for Conventional Ethanol Production Summary Checklist for Cellulosic Ethanol Production Registration Requirements for Cellulosic Ethanol Production Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 2
March 22, 2010 Dear Ethanol Producer: With full implementation of the Renewable Fuels Standard (RFS2) now in full swing, each of you will be required to register with the U.S. Environmental Protection Agency (EPA). In an effort to provide you with information you will need before you register, the RFA is providing detailed explanations of the steps necessary for both grain ethanol and cellulosic ethanol production to help guide you through the process. Enclosed, you will find key steps and dates that all ethanol producers must take to register and begin generating Renewable Identification Numbers (RINs) necessary to track the required use of ethanol. Please be aware that many of the dates for registration are fast approaching. This document is not intended to constitute official legal advice and I encourage you to consult your own legal counsel with specific questions as they relate to your operations. If the RFA can provide you with any other assistance, please do not hesitate to contact us at 202.289.3835. Sincerely, Bob Dinneen, President and CEO Renewable Fuels Association Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 3
Summary Checklist for Registration for Conventional Ethanol Production The following is a summary checklist and more detailed description of the process by which conventional (corn based) ethanol producers must register with the EPA in accordance with the Renewable Fuels Standard. Required Action Timing Citation Small Producers (less than 10,000 gallons a year) are not required to generate RINs. ( 80.1426(c)(2)) Step 1: Determine whether renewable fuel produced at facility is eligible for an RFS2 D Code. ( 80.1426) a. Is there an applicable approved pathway for conventional ethanol (D Code of 6): Corn ethanol produced using one of the following processes: Dry mill using natural gas, biomass or biogas that uses one of the following: At least two advanced technologies (Advanced technologies include: Corn oil fractionation; Corn oil extraction; Membrane separation; Raw starch hydrolysis; Combined heat and power. Advanced technologies must apply to 100% of the facility s production.); At least one advanced technology and dries no more than 65% of distiller grains annually Dries no more than 50% of distiller grains annually OR Wet mill that uses biomass or biogas for process energy YES, go to Step 2. NO, go to b. Ethanol from starches from crop residues and annual cover crops qualifies if the facility uses fermentation using natural gas, biomass or biogas for process energy May 2010 80.1426(a), (f) Table 1, Table 2 Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 4
YES, go to Step 2. NO, go to b. Required Action Timing Citation Does the facility produce another fuel that meets the pathway (see Table 1)? (While EPA is working on a lifecycle analysis, grain sorghum does not currently apply under any of EPA s approved pathways.) YES, go to Step 2. NO, go to b. b. Can the ethanol facility still generate a D Code of 6? (a) Facility commenced construction prior to December 19, 2007 (grandfathered) or (b) after December 19, 2007 but on or before December 31, 2009 and uses natural gas, biomass or both for process energy (deemed compliant*) Construction was not delayed for more than 18 months Construction was completed by December 19, 2010 for grandfathered facilities or within 36 months of commencing construction for deemed compliant facilities May 2010 80.1426(f)(6), 80.1403 *Only applies to ethanol produced from deemed compliant facilities, not any renewable fuel. NOTE: Any volume above baseline volume must meet an EPA approved pathway. YES, go to Step 2. NO. STOP. Facility must seek approval from EPA ( 80.1416). Step 2: Determine whether renewable fuel is produced from renewable biomass. ( 80.1426, 80.1401, 80.1451, 80.1454) a. Is the feedstock used planted crops or crop residues grown in the United States? May 2010 80.1426(a)(1)(ii)(A), 80.1454(g) YES, go to Step 3, the Facility must register. NO, go to b. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 5
Required Action Timing Citation May 2010 b. Does the facility use other feedstock and can it comply with the recordkeeping and reporting requirements in 80.1451 and 80.1454 or is it participating in an approved tracking program under 80.1454(h)? YES, go to Step 3, the facility must register. NO, STOP, the facility cannot generate RINs at this time. Step 3: (Re)Registration with EPA ( 80.1450) Obtain CDX Account Prepare Registration Forms through EPA CDX System Required Information General registration information Fuels produced and applicable D Code(s) Feedstocks that may be used Required documentation, if any Production processes Co-products produced A process heat fuel supply plan (types of process heat fuel and identification of suppliers) Required documentation, if use biogas Records that support facility s baseline volume (permitted capacity if available, otherwise actual peak capacity) For permitted capacity, applicable air permits If air permits do not reflect maximum rated annual volume output of renewable volume, documents demonstrating facility s annual peak capacity For grandfathered or deemed compliant facilities, evidence demonstrating when construction of the facility commenced 80.1426(a)(1)(ii), 80.1451, 80.1454 May 2010 80.1450(b)(1), 80.1401, 80.1403 On-Site Engineering Review and Report by Independent Third-Party Engineer Hire an independent third party engineer Licensed based on the law of the State in which the facility is located Professional engineer with work experience in the chemical engineering field or related renewable fuel production May 2010** **For grandfathered or deemed compliant facilities, must be 80.1450(b)(2) Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 6
Required Action Timing Citation No financial relationship with facility and no disbarment or suspension proceedings Engineer Report and Verification On-site inspection Document review Proof of the engineer s qualifications submitted by December 31, 2010 Submit Completed Documents to EPA early-june 2010 Do I have any additional registration 80.1450(a), (c) requirements as a fuel exporter or importer? EXCEPT AS NOTED, REGISTRATION MATERIALS MUST BE SUBMITTED TO AND ACCEPTED BY EPA BY JULY 1, 2010 (or 60 days prior to generation of RINs) Step 4: Obtain EMTS Account from EPA ( 80.1452) Training on system is available from EPA TODAY EMTS ACCOUNT MUST BE OBTAINED BY JULY 1, 2010 (or 60 days prior to engaging in any RIN transactions) Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 7
Registration Requirements for Conventional Ethanol Producers Under the RFS2 Program 1 Effective date of program: July 1, 2010 Except as noted, registration materials must be submitted and accepted by EPA by July 1, 2010 to generate RINs. Facilities must start today. What does this mean? Step 1. Identifying the appropriate D Code, if any. Unless the facility is a small producer (less then 10,000 gallons per year), facilities must determine whether their fuel qualifies to generate an RFS2 RIN. ( 80.1426(a)) The first step is to determine whether EPA has approved a D Code for the fuel being produced or, if not, whether the facility is eligible to use a D Code of 6 (renewable fuel) as a grandfathered or deemed compliant facility. ( 80.1426(f)). Available D Codes under RFS2 are: 6 for renewable fuel (20% reduction requirement); 5 for advanced biofuels (50% reduction requirement); 4 for biomass-based diesel (50% reduction requirement); and 3 for cellulosic biofuels except cellulosic diesel which has a D Code of 7 (60% reduction requirement). Step 1.a.: Does my fuel meet one of the EPA approved pathways (listed in Table 1 to 80.1426)? Ethanol from corn starch can only be eligible for a D Code of 6. The facility s feedstock and production process must be included in the approved pathway. If not, operational adjustments may be needed or approval from EPA sought. (a) Corn ethanol produced from a facility that uses one of the following processes qualifies: (i) (ii) Drymill process, using natural gas, biomass, or biogas for process energy and at least two advanced technologies Dry mill process, using natural gas, biomass, or biogas for process energy and at least one of the advanced 1 While providing some general information, this paper focuses on domestic production of ethanol from corn. Facilities must ensure that each feedstock they use complies with the requirements under the regulations. The rule provides for additional requirements for importers and exporters of renewable fuel. This document is intended to be a guide, and parties should review the regulations themselves. The final rule was published in the Federal Register at 75 Fed. Reg. 14,670 (Mar. 26, 2010). On April 30, 2010, EPA approved technical amendments to the final rule, which will become effective on July 1, 2010 unless EPA withdraws the final rule based on adverse comments it receives. The rules are available at http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm. This paper has been updated to reflect EPA s technical amendments. Key changes are noted in red. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 8
technologies plus drying no more than 65% of the distillers grains with solubles it markets annually (iii) (iv) Dry mill process, using natural gas, biomass, or biogas for process energy and drying no more than 50% of the distillers grains with solubles it markets annually Wet mill process using biomass or biogas for process energy Advanced technologies for purposes of this provision include: Corn oil fractionation; Corn oil extraction; Membrane separation; Raw starch hydrolysis; Combined heat and power. Advanced technologies must apply to 100% of the facility s production. (b) Ethanol from starches from crop residues and annual cover crops qualifies if the facility uses fermentation using natural gas, biomass or biogas for process energy If more than one pathway applies, the facility must look to 80.1426(f)(3). If YES, then the facility must identify the D Code for registration and next determine whether its feedstock meets the renewable biomass requirement. Go to Step 2. If NO, then the facility must determine whether it meets the requirements for a grandfathered or deemed compliant facility in order to use a D Code of 6. Go to Step 1.b. Step 1.b.: Is my facility grandfathered from or deemed compliant with the 20% GHG reduction requirement for renewable fuel to generate a D Code of 6 ( 80.1426(f)(6))? A grandfathered facility ( 80.1403(c)) is a renewable fuel facility and any expansions that: Commenced construction ( 80.1403(a)(4)) on or before December 19, 2007 Did not discontinue construction for a period of 18 months after commencement and completed construction by December 19, 2010 A deemed compliant facility ( 80.1403(d)) is an ethanol facility and any expansions that: Is fired with natural gas, biomass or a combination thereof (and continues to do so) Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 9
Commenced construction ( 80.1403(a)(4)) after December 19, 2007 but on or before December 31, 2009 Did not discontinue construction for a period of 18 months after commencement and completed construction within 36 months Only ethanol from these facilities will be considered compliant with the 20% requirement for renewable fuel. For any expansion of the facility or changes which result in volumes above the baseline volume of the facility ( 80.1403(a)), that additional volume must meet one of EPA s approved pathways under Step 1.a. above. ( 80.1403(e)) If YES, then the facility must determine whether its feedstock meets the renewable biomass requirement. Go to Step 2. If NO, then STOP, the facility cannot generate RINs at this time, and must seek approval from EPA pursuant to the petition process under 80.1416. Note: EPA has indicated it is working on a lifecycle analysis to approve grain sorghum and woody pulp ethanol. Until these pathways are approved by EPA (or the facility is grandfathered or deemed compliant), however, RINs cannot be generated. Step 2. Identifying whether the feedstock used meets the renewable biomass requirements. In order to generate an RFS2 RIN, the facility must also be able to demonstrate that the fuel is produced from renewable biomass. ( 80.1426(a)(1)(ii)). Corn is a planted crop and must be from existing agricultural land that, on December 19, 2007, was cleared or cultivated, nonforested and either actively managed or fallow ( 80.1401) Step 2.a.: Does my feedstock qualify for the aggregate compliance approach, which is deemed to meet the renewable biomass requirements? EPA has established an aggregate compliance approach under 80.1454(g) for planted crops and crop residue grown in the United States. The aggregate compliance approach essentially exempts facilities from recordkeeping and reporting requirements for renewable biomass certification until the EPA identified 2007 baseline level of 402 million acres of existing agricultural land in the U.S. is exceeded. EPA will monitor these lands annually and provide notice if the requirements are triggered. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 10
If the corn (or planted crop or crop residue) was grown in the United States, then EPA has determined it meets the renewable biomass requirements. If YES, then the facility must register for the RFS2. Go to Step 3. If NO, then the facility must determine if it can certify the feedstock meets the renewable biomass definition. Go to Step 2.b. Step 2.b.: Does my feedstock meet the renewable biomass requirements? EPA requires that the facility be able to comply with the recordkeeping and reporting requirements in 80.1451 and 80.1454 for all other feedstocks, including imported corn. If the corn was grown outside of the United States, the facility must determine whether it has sufficient information to comply with the requirements or obtain such information. This is likely to require changes in any contracts and tracing information back to 2007 to establish that the land from which the corn was harvested was cleared or cultivated, nonforested, and actively managed or fallow on December 19, 2007. Required records depend on the type of feedstock used. EPA also established an alternative feedstock tracking approach, which requires third-party surveys and an EPA-approved plan ( 80.1454(h)). If YES, and the facility can certify that the feedstock it uses meets the renewable biomass requirement, then it must generate RINs for the fuel and must register by July 1, 2010. Go to Step 3. If NO, then STOP, the facility cannot generate RINs at this time. Step 3: Register or Re-register your facility ( 80.1450). The RFS2 program is effective July 1, 2010. Prior to generating RFS2 RINs, the facility must register and have its registration accepted by EPA under the RFS2 program. This must occur by July 1, 2010 (or 60 days prior to generating RINs). The facility must register even if it has already registered under the RFS1 program. No one may own RINs unless it is registered with EPA. Registration links and information can be found at http://www.epa.gov/otaq/regs/fuels/fuelsregistration.htm. What do I need to register? The RFS2 (re)registration process includes new requirements that a facility must begin to comply with well before July 1, 2010. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 11
(1) Collect information needed to support registration. This includes information on the following: General registration information, such as company information, responsible corporate officer information, and facility information Types of fuel that may be produced (and applicable D Code(s)) Feedstocks that may be used in production, including specific documentation if the feedstock used is separated food or yard waste or separated municipal solid waste Production processes and co-products that are produced A process heat fuel supply plan (types of process heat fuel and identification of suppliers), including specific documentation if the facility uses biogas for process heat Records that support the facility s baseline volume The baseline volume as defined in 80.1401 (105% of maximum permissible production capacity as specified in applicable air permits or, if not so specified, actual peak capacity as defined in 80.1401) Records include, for permitted capacity, applicable air permits, or, if applicable, documents demonstrating actual peak capacity If the facility must register as a grandfathered facility under 80.1403(c) or as a deemed compliant facility under 80.1403(d), it also needs evidence demonstrating when construction of the facility commenced including, but not limited to, contracts with construction and other companies. (2) Hire an independent third party engineer to conduct on-site engineering review of production facility and prepare written report. Registration requires an independent third party engineering review, which includes a site visit and review of relevant documents, and written report and verification of the information provided in the facility s registration. The on-site engineering review must be conducted by an independent third party who is licensed based on the law of the State in which the facility is located and is a professional engineer with professional work experience in the chemical engineering field or related to renewable fuel production. Proof of the engineer s qualifications must be provided to EPA and the engineer must retain all records pertaining to verification for a period of five years. Includes attest engagement requirements. ( 80.1464(b)(4)). For grandfathered or deemed compliant facilities, the engineering review need not be submitted by July 1, 2010 to Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 12
register, but must be submitted by December 31, 2010. ( 80.1464(b)(2)(iv)) Note: The facility must retain all documents related to registration for a period of five years. ( 80.1454(b)). Note: The registration, including on-site engineering review, must be updated every 3 years, at least 60 days prior to production of a renewable fuel not in its current registration information (i.e., a renewable fuel using a new D code), and at least 7 days prior to any other changes that do not affect the current D code(s) on file with EPA but that will affect the producer s registration information. ( 80.1450(d)). Responsible corporate officer changes and any corrections or additions to information must be updated within 30 days of change or when the information supplied becomes incomplete or inaccurate. How do I register? Registration starts by obtaining an account with EPA s CDX program and submitting information to EPA through the producer s CDX account. Submitting a registration through CDX does not equal registration. Completed forms must be printed and signed by a Responsible Corporate Officer and mailed along with required documentation to: US Mail*: U.S. Environmental Protection Agency Fuels Programs Registration (6406J) 1200 Pennsylvania Avenue, NW Washington, DC 20460 *EPA has noted that US Mail to the EPA offices must first be irradiated, which may delay receipt. Commercial Delivery: U.S. Environmental Protection Agency Fuels Programs Registration Room 647C 1310 L Street, NW Washington, DC 20005 Phone: (202)343-9038 Approval of registration by EPA occurs once the engineering review is used to validate the registration information. EPA has clarified that acceptance of the registration is sufficient to generate RINs, and that grandfathered and deemed compliant facilities have until December 31, 2010 to submit the engineering reviews. EPA has noted that time for registration processing will depend on the number of pending registrations and the degree of completeness of the submission. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 13
IMPORTANT NUMBERS: CDX Help Desk: 888-890-1995 RFS Help Desk: 202-343-9755 EPAFuelsPrograms@epa.gov Step 4: Obtain EMTS Account from EPA ( 80.1452). Proper registration is required in order for producers to be able to participate in the EPA Moderated Transaction System (EMTS). Starting July 1, 2010, domestic producers of renewable fuel must submit information to EMTS within five (5) business days of the date of RIN assignment. Starting July 1, 2010, each RIN transaction must be reported to EPA via the EMTS within five (5) business days of the reportable event. The reportable event for a RIN purchase or sale occurs on the date of transfer per 80.1453(a)(4). The reportable event for a RIN separation or retirement occurs on the date of separation or retirement as described in 80.1429. EMTS information can be found at http://www.epa.gov/otaq/fuels/renewablefuels/epamts.htm. Training can and should begin now. Account must be obtained by July 1, 2010 or at least 60 days prior to engaging in any RIN transactions. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 14
In addition to registration and similar to RFS1, there are numerous additional recordkeeping and reporting requirements for renewable fuel producers Recordkeeping Requirements for domestic producers of renewable fuel ( 80.1454): Beginning July 1, 2010, any domestic producer of a renewable fuel must keep all of the following records for a period of 5 years (except as noted): (1) Product transfer documents ( 80.1453) (2) Copies of all reports required to be submitted to EPA (3) Records related to the generation and assignment of RINs for each facility (4) Records related to each RIN transaction, including EMTS information (5) Records related to the production, importation, ownership, sale or use of any volume of renewable fuel for which RINs were generated or blend of renewable fuel for which RINs were generated and gasoline or diesel fuel that any party designates for use as transportation fuel, jet fuel, or heating oil and the use of the fuel or blend as transportation fuel, jet fuel, or heating oil without further blending, in the designated form (6) Copies of registration documents (7) Unless the producer can use the aggregate compliance approach under 80.1454(g) or uses the alternative renewable biomass tracking approach under 80.1454(h), documents associated with feedstock purchases and transfers that identify where the feedstocks were produced and are sufficient to verify that feedstocks used are renewable biomass. Specific requirements are outlined for feedstocks that are planted crops or crop residues from existing foreign agricultural lands, planted trees or tree residue from actively managed tree plantations, slash and pre-commercial thinnings from forestlands or biomass obtained from areas at risk of wildfire, and separated yard and food waste, biogas or electricity (recordkeeping will be required for planted crops or crop residues from the United States if the requirements are subsequently triggered and required by EPA and separate requirements apply to the alternative tracking approach) ( 80.1454(d), (g), (h)) (8) For grandfathered facilities under 80.1403(c) and deemed compliant facilities under 80.1403(d), must keep all of the following: detailed engineering plans for the facility; Federal, State, and local (or foreign governmental) preconstruction approvals and permitting; and procurement and construction contracts and agreements. These documents must be kept through year 2022 ( 80.1454(e)) Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 15
Reporting requirements for domestic renewable fuel producers ( 80.1451): (1) RIN Generation Reports ( 80.1451(b)(1)) Quarterly Reports due May 31 (Jan.-Mar.), August 31 (Apr.-June), November 30 (July-Sept.), and February 28 (Oct.-Dec.) - First Report Due November 30, 2010. Reporting information is similar to that required under RFS1 ( 80.1152(b)(1)), including certification by responsible corporate officer, except now also includes: The types and volumes of feedstocks used. The process(es) and feedstock(s) used and proportion of renewable volume attributable to each process and feedstock. The type of co-products produced with each batch of renewable fuel. The volume of co-products produced in each quarter. A list of the RINs generated and an affirmation that the feedstock(s) used for each batch meets the definition of renewable biomass. Additional requirements apply for fuel made from municipal solid waste. Producers of renewable fuel that use biogas for process heat must identify the supplier of the biogas and report the energy content produced and supplied to the renewable fuel facility. Includes attest engagement requirements ( 80.1464(b)(1)). (2) RIN Transaction Reports ( 80.1451(b)(2), (c)(1)) Quarterly Reports due May 31 (Jan.-Mar.), August 31 (Apr.-June), November 30 (July-Sept.), and February 28 (Oct.-Dec.) - First Report Due November 30, 2010. Reporting information is similar to that under RFS1 ( 80.1152(c)(1)), including certification by responsible corporate officer, except now parties have to report the per gallon RIN price and/or the per gallon price of renewable fuel price with RINs included Includes attest engagement requirements ( 80.1464(b)(2)). (3) RIN Activity Reports ( 80.1451(b)(3), (c)(2)) Quarterly Reports due May 31 (Jan.-Mar.), August 31 (Apr.-June), November 30 (July-Sept.), and February 28 (Oct.-Dec.) - First Report Due November 30, 2010. Reporting information is similar to that under RFS1 ( 80.1152(c)(2)), including certification by responsible corporate officer Includes attest engagement requirements ( 80,1464(b)(3)). (4) Renewable Biomass Reports ( 80.1451(d), (e)) Quarterly Reports due May 31 (Jan.-Mar.), August 31 (Apr.-June), November 30 (July-Sept.), and February 28 (Oct.-Dec.) - First Report Due November 30, 2010. Applies to producers of renewable fuel made from feedstocks that are planted crops and crop residue from existing foreign agricultural land, planted trees or tree residue from actively managed tree plantations, slash and pre-commercial thinnings from forestlands or biomass obtained from areas at risk of wildfire (and for planted crops and crop residues grown in the United States, if EPA determines that the reporting requirements have been triggered pursuant to 80.1454(g)). Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 16
Reports must include the following information: A summary of the types and volumes of feedstocks used in that quarter. Electronic data identifying the land by coordinates of the points defining the boundaries from which each type of feedstock listed was harvested. If electronic data identifying a plot of land have been submitted previously, producers and RIN-generating importers may submit a cross-reference to that electronic data. (5) Production Outlook Reports ( 80.1449) Annual Report due by March 31 of each year, EXCEPT REPORT FOR 2010 IS DUE SEPTEMBER 1 Reports must include the following information based on the reporting party s best estimates for the five following calendar years: The type, or types, of renewable fuel expected to be produced or imported at each facility owned by the renewable fuel producer or importer. The volume of each type of renewable fuel expected to be produced or imported at each facility. The number of RINs expected to be generated by the renewable fuel producer or importer for each type of renewable fuel. Information regarding existing and planned production capacity, including information on expanded production planned or underway. Long-range plans for expansion of production capacity at existing facilities or construction of new facilities. Feedstocks and production processes to be used at each production facility. Changes to the facility that would raise or lower emissions of any greenhouse gases from the facility. Whether capital commitments have been made or are projected to be made. Updates of the progress of these activities. Production outlook reports shall be sent to one of the following addresses: For US Mail: U.S. EPA, Attn: RFS Program- Production Outlook Reports, 6406J, 1200 Pennsylvania Avenue, NW, Washington, DC 20460. For overnight or courier services: U.S. EPA, Attn: RFS Program- Production Outlook Reports, 6406J, 1310 L Street, NW, 6th floor, Washington, DC 20005. (202) 343-9038. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 17
Summary Checklist for Registration for Cellulosic Ethanol Production The following is a summary checklist and more detailed description of the process by which cellulosic ethanol producers must register with the EPA in accordance with the Renewable Fuels Standard. Required Action Timing Citation Small Producers (less than 10,000 gallons a year) are not required to generate RINs. ( 80.1426(c)(2)) Temporary New Producers (less than 125,000 gallons a year) are not required to generate RINs for a maximum of three years. ( 80.1426(c)(3), 80.1455(c), (d)). Step 1: Determine whether renewable fuel produced at facility is eligible for an RFS2 D Code. ( 80.1426) a. Is there an applicable approved pathway for cellulosic ethanol (D Code of 3 for Cellulosic Biofuel - 60% GHG reduction): Cellulosic ethanol production using one of the following feedstocks: Crop residues, slash, pre-commercial thinnings and tree residues, annual cover crops Switchgrass, and miscanthus Cellulosic components of separated yard wastes Cellulosic components of separated food wastes Cellulosic components of separated municipal solid wastes (Ethanol produced from non-cellulosic portions of separated food wastes is eligible as an Advanced Biofuel - D Code of 5.) YES, go to Step 2. NO, go to b. to generate D Code of 6 and/or seek approval from EPA to use D Code of 3 ( 80.1416). Does the facility produce another fuel that meets the pathway (see Table 1)? YES, go to Step 2. NO, go to b. May 2010 80.1426(a), (f) Table 1, Table 2 Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 18
Required Action Timing Citation b. Can the ethanol facility still generate a D Code of 6 (renewable fuel)? (a) Facility commenced construction prior to December 19, 2007 (grandfathered) or (b) after December 19, 2007 but on or before December 31, 2009 and uses natural gas, biomass or both for process energy (deemed compliant*) Construction was not delayed for more than 18 months Construction was completed by December 19, 2010 for grandfathered facilities or within 36 months of commencing construction for deemed compliant facilities May 2010 80.1426(f)(6), 80.1403 *Only applies to ethanol produced from deemed compliant facilities, not any renewable fuel. NOTE: Any volume above baseline volume must meet an EPA approved pathway. YES, go to Step 2. NO. STOP. Facility must seek approval from EPA ( 80.1416). Step 2: Determine whether renewable fuel is produced from renewable biomass. ( 80.1426, 80.1401, 80.1451, 80.1454) a. Is the feedstock used planted crops or crop residues grown in the United States? May 2010 80.1426(a)(1)(ii)(A), 80.1454(g) YES, go to Step 3, the facility must register. NO, go to b. b. For other feedstock, can the facility comply with the recordkeeping and reporting requirements in 80.1451 and 80.1454? Do I need documentation regarding location where feedstocks were produced? Do I need documentation regarding May 2010 80.1426(a)(1)(ii), (f)(5), 80.1451, 80.1454 Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 19
Required Action Timing Citation whether land was cleared prior to and actively managed or fallow on December 19, 2007? Do I need documentation regarding separation of yard waste, food waste or municipal solid waste? Do I have appropriate certification and documents from supplier of feedstock? Am I participating in an approved tracking program under 80.1454(h)? YES, go to Step 3, the facility must register. NO, STOP, the facility cannot generate RINs at this time. Step 3: (Re)Registration with EPA ( 80.1450) Obtain CDX Account Prepare Registration Forms through EPA CDX System Required Information May 2010 General registration information Fuels produced and applicable D Code(s) Feedstocks that may be used Do I need to identify where feedstock is obtained from, such as for separated yard waste, food waste and municipal solid waste? Do I have any required documentation, such as for separated yard waste, food waste and municipal solid waste? Production processes Co-products produced A process heat fuel supply plan (Process energy fuel types and identification of suppliers) Do I have any required documentation, such as for biogas used as process fuel? 80.1450(b)(1), 80.1426(f)(5), 80.1401, 80.1403 Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 20
Required Action Timing Citation Records that support facility s baseline volume (permitted capacity if available, otherwise actual peak capacity) For permitted capacity, applicable air permits If air permits do not reflect maximum rated annual volume output of renewable volume, documents demonstrating facility s annual peak capacity For grandfathered or deemed compliant facilities, evidence demonstrating when construction of the facility commenced On-Site Engineering Review and Report by Independent Third-Party Engineer Hire an independent third party engineer Licensed based on the law of the State in which the facility is located Professional engineer that with professional experience in the chemical engineering field or related renewable fuel production No financial relationship with facility and no disbarment or suspension proceedings Engineer Report and Verification On-site inspection Document review Proof of the engineer s qualifications May 2010 (For grandfathered and deemed compliant facilities, engineering review must be submitted by December 31, 2010) 80.1450(b)(2) Submit Completed Documents to EPA Early-June 2010 Do I have any additional registration 80.1450(a), (c) requirements as a fuel exporter or importer? EXCEPT AS NOTED, REGISTRATION MATERIALS MUST BE SUBMITTED TO AND ACCEPTED BY EPA BY JULY 1, 2010 (or 60 days prior to generation of RINs) Step 4: Obtain EMTS Account from EPA ( 80.1452) Training on system is available from EPA TODAY EMTS ACCOUNT MUST BE OBTAINED BY JULY 1, 2010 (or 60 days prior to engaging in any RIN transactions) Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 21
Registration Requirements for Cellulosic Ethanol Producers Under the RFS2 Program 2 Effective date of program: July 1, 2010 Except as noted, registration must be submitted to and accepted by EPA by July 1, 2010 to generate RINs. Facilities must start today. What does this mean? Step 1. Identifying the appropriate D Code, if any. Unless the facility is a small producer (less then 10,000 gallons per year), facilities must determine whether their fuel qualifies to generate an RFS2 RIN. ( 80.1426(a)) The first step is to determine whether EPA has approved a D Code for the fuel being produced or, if not, whether the facility is eligible to use a D Code of 6 (renewable fuel) as a grandfathered or deemed compliant facility. ( 80.1426(f)). Available D Codes under RFS2 are: 6 for renewable fuel (20% reduction requirement); 5 for advanced biofuels (50% reduction requirement); 4 for biomass-based diesel (50% reduction requirement); and 3 for cellulosic biofuels except cellulosic diesel which has a D Code of 7 (60% reduction requirement). Step 1.a.: Does my fuel meet one of the EPA approved pathways (listed in Table 1 to 80.1426)? Cellulosic ethanol may be eligible for a D Code of 3 (cellulosic biofuel). The facility s feedstock and production process must be included in the approved pathway. If not, operational adjustments may be needed or approval from EPA sought. Cellulosic ethanol production qualifies if it uses one of the following types of feedstocks: (a) Crop residues, slash, pre-commercial thinnings and tree residues, annual cover crops (b) Switchgrass, and miscanthus 2 While providing some general information, this paper focuses on domestic production of cellulosic ethanol. Facilities must ensure that each feedstock they use complies with the requirements under the regulations. The rule provides for additional requirements for importers and exporters of renewable fuel. This document is intended to be a guide, and parties should review the regulations themselves. The final rule was published in the Federal Register at 75 Fed. Reg. 14,670 (Mar. 26, 2010). On April 30, 2010, EPA approved technical amendments to the final rule, which will become effective on July 1, 2010 unless EPA withdraws the final rule based on adverse comments it receives. The rules are available at http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm. This paper has been updated to reflect EPA s technical amendments. Some key changes are reflected in red type. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 22
(c) (d) (e) Cellulosic components of separated yard wastes Cellulosic components of separated food wastes Cellulosic components of separated municipal solid wastes Ethanol produced from non-cellulosic portions of separated food wastes is eligible as an Advanced Biofuel - D Code of 5. If more than one pathway applies, the facility must look to 80.1426(f)(3). If YES, then the facility must identify the applicable D Code for registration and next determine whether its feedstock meets the renewable biomass requirement. Go to Step 2. If NO, then the facility must determine whether it meets the requirements for a grandfathered or deemed compliant facility in order to use a D Code of 6 or seek approval from EPA ( 80.1416). Go to Step 1.b. Step 1.b.: Is my facility grandfathered from or deemed compliant with the 20% GHG reduction requirement for renewable fuel to generate a D Code of 6 ( 80.1426(f)(6))? A grandfathered facility ( 80.1403(c)) is a renewable fuel facility and any expansions that: Commenced construction ( 80.1403(a)(4)) on or before December 19, 2007 Did not discontinue construction for a period of 18 months after commencement and completed construction by December 19, 2010 A deemed compliant facility ( 80.1403(d)) is an ethanol facility and any expansions that: Is fired with natural gas, biomass or a combination thereof (and continues to do so) Commenced construction ( 80.1403(a)(4)) after December 19, 2007 but on or before December 31, 2009 Did not discontinue construction for a period of 18 months after commencement and completed construction within 36 months Only ethanol from these facilities will be considered compliant with the 20% requirement for renewable fuel. For any expansion of the facility or changes which result in volumes above the baseline volume of the facility ( 80.1403(a)), that additional volume must meet one of EPA s approved pathways under Step 1.a. above. ( 80.1403(e)) If YES, then the facility must determine whether its feedstock meets the renewable biomass requirement. Go to Step 2. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 23
If NO, then STOP, the facility cannot generate RINs at this time, and must seek approval from EPA pursuant to the petition process under 80.1416. Note: EPA has indicated it is working on a lifecycle analysis to approve grain sorghum and woody pulp ethanol. Until these pathways are approved by EPA or the facility is grandfathered or deemed compliant, however, RINs cannot be generated. Step 2. Identifying whether the feedstock used meets the renewable biomass requirements. In order to generate an RFS2 RIN, the facility must also be able to demonstrate that the fuel is produced from renewable biomass. ( 80.1426(a)(1)(ii)). Renewable Biomass includes: Planted crops and crop residue harvested from existing agricultural land cleared or cultivated prior to December 19, 2007 and that was nonforested and either actively managed or fallow on December 19, 2007. Planted trees and tree residue from a tree plantation located on non-federal land (including land belonging to an Indian tribe or an Indian individual that is held in trust by the U.S. or subject to a restriction against alienation imposed by the U.S.) that was cleared at any time prior to December 19, 2007 and actively managed on December 19, 2007. Animal waste material and animal byproducts. Slash and pre-commercial thinnings from non-federal forestland (including forestland belonging to an Indian tribe or an Indian individual, that are held in trust by the United States or subject to a restriction against alienation imposed by the United States) that is not ecologically sensitive forestland. Biomass (organic matter that is available on a renewable or recurring basis) obtained from the immediate vicinity of buildings and other areas regularly occupied by people, or of public infrastructure, in an area at risk of wildfire. Algae. Separated yard waste or food waste, including recycled cooking and trap grease, and materials described in 80.1426(f)(5)(i). Step 2.a.: Does my feedstock qualify for the aggregate compliance approach, which is deemed to meet the renewable biomass requirements? EPA has established an aggregate compliance approach under 80.1454(g) for planted crops and crop residue grown in the United States. The aggregate compliance approach essentially exempts facilities from recordkeeping and reporting requirements for renewable biomass certification until the EPA identified 2007 baseline level of 402 million acres of existing agricultural land in the U.S. is exceeded. EPA will monitor these lands annually and provide notice if the requirements are triggered. If the crop residue was grown in the United States, then EPA has determined it meets the renewable biomass requirements. For all other feedstocks, the Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 24
facility must carefully review and determine the applicable reporting and recordkeeping requirements. If YES, then the facility must register for the RFS2. Go to Step 3. If NO, then the facility must determine if it can certify the feedstock meets the renewable biomass definition. Go to Step 2.b. Step 2.b.: Does my feedstock meet the renewable biomass requirements? EPA requires that the facility be able to comply with the recordkeeping and reporting requirements in 80.1451 and 80.1454 for all other feedstocks (including crop residues grown outside the United States). The facility must determine whether it has sufficient information to comply with the applicable recordkeeping or reporting requirements or obtain such information. This is likely to require changes in any contracts and may require tracing information back to 2007 to determine the location of the land from which it was obtained and whether the land meets the applicable requirements (e.g., actively managed on December 19, 2007). EPA requires additional documentation to determine whether separated yard waste, food waste and municipal solid waste was properly managed and separated. Required records depend on the type of feedstock used. EPA also established an alternative feedstock tracking approach, which requires third-party surveys and an EPA-approved plan ( 80.1454(h)). If YES, and the facility can certify that the feedstock it uses meets the renewable biomass requirement, then it must generate RINs for the fuel and must register by July 1, 2010. Go to Step 3. If NO, then STOP, the facility cannot generate RINs at this time. Step 3: Register or Re-register your facility ( 80.1450). The RFS2 program is effective July 1, 2010. Prior to generating RFS2 RINs, the facility must register and have its registration accepted by EPA under the RFS2 program. This must occur by July 1, 2010 (or 60 days prior to generating RINs). The facility must register even if it has already registered under the RFS1 program. No one may own RINs unless it is registered with EPA. Registration links and information can be found at http://www.epa.gov/otaq/regs/fuels/fuelsregistration.htm. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 25
What do I need to register? The RFS2 (re)registration process includes new requirements that a facility must begin to comply with well before July 1, 2010. (1) Collect information needed to support registration. This includes information on the following: General registration information, such as company information, responsible corporate officer information, and facility information Types of fuel that may be produced (and applicable D Code(s)) Feedstocks that may be used in production, including specific documentation if the feedstock used is separated food or yard waste or separated municipal solid waste Production processes and co-products that are produced A process heat fuel supply plan (types of process heat fuel and identification of suppliers), including specific documentation if the facility uses biogas for process heat Records that support the facility s baseline volume The baseline volume as defined in 80.1401 (105% of maximum permissible production capacity as specified in applicable air permits or, if not so specified, actual peak capacity as defined in 80.1401) Records include, for permitted capacity, applicable air permits, or, if applicable, documents demonstrating actual peak capacity If the facility is seeking to register as a grandfathered facility under 80.1403(c) or as a deemed compliant facility under 80.1403(d), it also needs evidence demonstrating when construction of the facility commenced including, but not limited to, contracts with construction and other companies (2) Hire an independent third party engineer to conduct on-site engineering review of production facility and prepare written report. Registration requires a an independent third party engineering review, which includes a site visit and review of relevant documents, and written report and verification of the information provided in the facility s registration. The on-site engineering review must be conducted by an independent third party who is licensed based on the law of the State in which the facility is located and is a professional engineer with professional work experience in the chemical engineering field or related to renewable fuel production. Proof of the engineer s qualifications must be provided to EPA and the engineer must retain all records pertaining to verification for a period of five years. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 26
Includes attest engagement requirements. ( 80.1464(b)(4)). For grandfathered or deemed compliant facilities, the engineering review need not be submitted by July 1, 2010 to register, but must be submitted by December 31, 2010. ( 80.1464(b)(2)(iv)) Note: The facility must retain all documents related to registration for a period of five years. ( 80.1454(b)). Note: The registration, including on-site engineering review, must be updated every 3 years, at least 60 days prior to production of a renewable fuel not in its current registration information (i.e., a renewable fuel using a new D code), and at least 7 days prior to any other changes that do not affect the current D code(s) on file with EPA but that will affect the producer s registration information. ( 80.1450(d)). Responsible corporate officer changes and any corrections or additions to information must be updated within 30 days of change or when the information supplied becomes incomplete or inaccurate. How do I register? Registration starts by obtaining an account with EPA s CDX program and submitting information to EPA through the producer s CDX account. Submitting a registration through CDX does not equal registration. Completed forms must be printed and signed by a Responsible Corporate Officer and mailed along with required documentation to: US Mail*: U.S. Environmental Protection Agency Fuels Programs Registration (6406J) 1200 Pennsylvania Avenue, NW Washington, DC 20460 *EPA has noted that US Mail to the EPA offices must first be irradiated, which may delay receipt. Commercial Delivery: U.S. Environmental Protection Agency Fuels Programs Registration Room 647C 1310 L Street, NW Washington, DC 20005 Phone: (202)343-9038 Approval of registration by EPA occurs once the engineering review is used to validate the registration information. EPA has clarified that acceptance of the registration is sufficient to generate RINs, and that grandfathered and deemed compliant facilities have until December 31, 2010 to submit the engineering reviews. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 27
EPA has noted that time for registration processing will depend on the number of pending registrations and the degree of completeness of the submission. IMPORTANT NUMBERS: CDX Help Desk: 888-890-1995 RFS Help Desk: 202-343-9755 EPAFuelsPrograms@epa.gov Step 4: Obtain EMTS Account from EPA ( 80.1452). Proper registration is required in order for producers to be able to participate in the EPA Moderated Transaction System (EMTS). Starting July 1, 2010, domestic producers of renewable fuel must submit information to EMTS within five (5) business days of the date of RIN assignment. Starting July 1, 2010, each RIN transaction must be reported to EPA via the EMTS within five (5) business days of the reportable event. The reportable event for a RIN purchase or sale occurs on the date of transfer per 80.1453(a)(4). The reportable event for a RIN separation or retirement occurs on the date of separation or retirement as described in 80.1429. EMTS information can be found at http://www.epa.gov/otaq/fuels/renewablefuels/epamts.htm. Training can and should begin now. Account must be obtained by July 1, 2010 or at least 60 days prior to engaging in any RIN transactions. Copyright 2010 Renewable Fuels Association. All Rights Reserved. Page 28