Keeping up with RFS compliance in a ever-changing RNG industry

 

RFS Registration Addendums to amend RNG physical and contractual pathways

 

By Karyn Jones, EcoEngineers

 

The current state of the renewable natural gas (RNG) industry is one of constant change and growth. It’s always in flux, changing contractual partners and adding new LNG fleets, and CNG/LNG fueling stations. The U.S. Environmental Protection Agency (USEPA) governs the Federal Renewable Fuel Standard (RFS). In order to generate RFS Renewable Identification Numbers — or RINs — RNG pathways must demonstrate a physical and contractual pathway of biogas from production to qualifying end use as transportation fuel in the U.S.  The RFS registration of each RNG production facility must be constantly amended to show these changes, per §80.1450(d).

One of the current compliance challenges with the RNG pathway is there is no capability of the USEPA’s Central Data Exchange (CDX) registration system to track and activate all major changes to the pathway. Many RIN Generators in industry are left wondering, “When can I generate valid RINs after I make an update to my contractual partners?”

EcoEngineers recently sat down with the USEPA to discuss expectations related to registration addendums.  Below is a summary of our current understanding, though this is subject to change. Ultimately, it is the RIN Generator who is responsible for ensuring that compliance is maintained, and RINs are generated according to the regulation.

How should I file RFS Registration Addendums?

If the change is major, as per §80.1450(d)(1), such as:
  • New contractual partners
  • Adding an LNG production facility to the pathway
  • Adding a trucking interconnect to the pathway
  • Any change which impacts the CDX registration information (registered capacity or pathway)

Registration steps: Engage a third-party professional engineer to complete a third-party engineering review addendum for the facility.  Submit the report to the USEPA and create a CDX facility update request (as applicable).  If there is no change to the facility CDX registration, submit an email to fuelsprogramsupport@epa.gov requesting review of the submitted materials.

RIN Generation:

  • If the CDX facility update request was created, wait until the USEPA activates the request. You can begin dispensing fuel using the new pathway beginning on that approval date moving forward. This means that RIN Generation using this pathway or partner will typically begin in the following month.
  • If a CDX facility update request was not created, then:
  • Conservative approach: Wait until you receive USEPA acknowledgement of your email prior to dispensing fuel using the new pathway. We especially recommend having a discussion with the USEPA if you are doing something novel.  This means that RIN Generation will likely occur in the month following this acknowledgement, which could take 60 days or more.
  • Less Conservative Approach: Wait seven days from submission prior to dispensing fuel using the new pathway (assuming you have not heard a response from the USEPA). This means that RIN Generation will likely occur in the following month.
If the change is minor, as per §80.1450(d)(2), such as:
  • Adding a new CNG station to an existing contractual pathway*
  • Contract renewals with existing partners*

*where changes do not impact the registered capacity of the pathway

Registration steps: Submit the information to the USEPA though DC fuels application and email fuelsprogramsupport@epa.gov requesting review of the submitted materials.

RIN Generation: Wait seven days from submission prior to dispensing fuel using the new pathway (assuming you have not heard a response from the USEPA). This means that RIN Generation will likely occur in the following month.

Example: Registration addendum submitted to the USEPA on Sept. 22, 2021, seven days later is Sept. 29, 2021.  Recommend beginning dispensing RNG at those new stations in the calendar month, Oct. 1, 2021.  RINs generated on October dispensing by Nov. 27, 2021, and according to the RIN Generation Protocol filed with the USEPA.

Gas Storage: A gas storage position may be used to store volumes prior to the USEPA pathway activation.  This gas storage contract and physical pathway demonstration must be included in the third-party engineering review addendum in order to be used.

Timeline: If a third-party engineering review is required, please account for time for this report to be prepared in your RIN Generation timeline.  The sooner you can communicate the changes to your third-party professional engineer and QAP provider, the better.

EcoEngineers is dedicated to maintaining a professional relationship with the USEPA and bringing regulation changes and clarification to the forefront of our clients’ minds. The clean energy market is a rapidly evolving sector, and Regulatory Engagement is the best strategy when your investment is high and the regulatory requirements are unclear. Our Regulatory Engagement team has advised on more than 100 projects since 2010, and we’d be happy to consult for you.

 

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Karyn Jones

Karyn Jones is a Senior Regulatory Consultant and Team Lead of the Regulatory Engagement team at EcoEngineers. She is an expert on the RFS and RNG projects and has been working in the industry for over a decade. For more information about low-carbon fuels, regulatory engagement, or EcoEngineers, contact Karyn at kjones@ecoengineers.us.