RINSTAR releases RIN validation study

By Anduin Kirkbride McElroy | June 02, 2008
The Clean Fuels Clearinghouse, which operates the RINSTAR Renewable Fuels Registry, performed a study on the number of valid renewable identification numbers (RINs) transacted on the registry between April 8 and June 10. When company President Clayton McMartin announced the study during a webinar on RIN validation that his company hosted in May, he said final results from the study would be available for purchase around June 17.

"The study will serve to provide statistically relevant insight into the [renewable fuels standard (RFS)] program," McMartin said. It's an internal survey of all transactions made on the registry, which includes 59 companies that interact with than 400 other companies. They average approximately 1,200 transactions daily. McMartin said halfway through the study, there had been 14,154 individual off-system RIN purchases—transactions between a RINSTAR member and a nonmember—representing 150 million gallons of ethanol.

In preliminary study results of off-system RIN transactions, McMartin said the daily average of errors was between 4 percent and 5 percent. "I think actual failure rates outside of RINSTAR could be double," he said, estimating as much as an 8 percent failure rate across the entire supply chain. At this rate, he said the financial impact from lost product value and administrative costs could total more than $70 million at the 2008 RFS level of 9 billion gallons per year.

The RINSTAR registry validates and certifies that each RIN is the correct number and isn't a duplicate of another. It does so by comparing it against the regulations and all of the RINs that have been transacted within RINSTAR. Between Sept. 1, 2007— when the RFS went into effect—and May 13, the registry had processed the sale of 130,000 RINs, which represent more than 2 billion gallons. "Our initial emphasis was to keep bad RINs out of the registry," McMartin said. "Once we got our feet under us, we started capturing the invalid RINs and the types of failures."

He said typical failure types are incorrect identification numbers, duplicate RINs, different companies having titles to the same RIN, too many or too few numbers within the actual RIN, and failure to split the RIN after sub-batches are created. Some of these errors are simple typos or administrative errors, while others are a result of late transfers or bad bookkeeping.

RINSTAR recently introduced a certification program for RINs. It gives a silver star certification to RINs that have been validated against the regulations and the RINSTAR database. RINs receive a gold star certification if they have a complete history of title, meaning that all transactions took place among RINSTAR members. This represents the highest level of accuracy.

The creation and transfer of RINs began Sept. 1, in accordance with regulations set forth by the U.S. EPA. RINs are mechanisms the EPA created to ensure compliance with the RFS in the Energy Policy Act of 2005. A RIN is a unique, 38-digit serial number assigned by producers and importers to each gallon or batch of renewable fuel produced. Within the 38 numbers are sections that identify the year produced, the company and facility that produced the fuel, the nature of the fuel, and how many gallons the number represents. The number stays attached to the fuel until it's blended into gasoline or diesel. An obligated party acquires RINs when blending with a renewable fuel, or it can purchase RINs to satisfy blending requirements.