RIN Lifecycle

RINs are the "currency" under the current RFS program. To understand the RFS program, please see the previous page.

Important Characteristics of RINs

Renewable identification numbers (RINs) are credits used for compliance, and are the “currency” of the RFS program.

• Renewable fuel producers generate RINs

• Market participants trade RINs

• Obligated parties obtain and then ultimately retire RINs for compliance

RINs can currently be traded in two forms:

1. Assigned RINs - directly associated with a batch of fuel and that travel with that batch of fuel from party to party. Purchasers obtain both the renewable fuel and RINs together.

2. Separated RINs - formerly assigned with a batch of fuel, but are no longer assigned to a batch. Purchase only the RIN.

Examples of current typical RIN transactions include:

• Generate - when a fuel is produced, a RIN is generated

• Buy - when an assigned/separated RIN is bought/traded by a buyer from a seller

• Sell - when an assigned/separated RIN is sold/traded by a seller to a buyer

• Separate - when a RIN is separated from the fuel to which it was originally assigned

• Retire - when a RIN is used to demonstrate compliance, or required to be retired for other purposes

The typical RIN lifecycle is depicted in the following graphic:

image credit goes to epa.gov

Who Are the Current Market Participants?

The current RFS program outlines 4 types of market participant categories:

• Obligated parties (refiners and importers of gasoline or diesel)

• Renewable fuel exporters

• Renewable fuel producers

• Registered RIN market participants

Participants include both domestic and foreign companies. A company may fall under one or more categories and can change from year to year based on their trading or business activities.

Where Do RINs Currently Get Exchanged?

EPA moderated transaction system (EMTS) is the official exchange and database of record for all transactions involving RINs. The typical process involves:

1. Parties enter into a trade agreement outside of EMTS

2. Each of the trading partners then enter into EMTS a separate record (“buy”/”sell”)

3. EMTS matches the trades; if the QA check is passed RINs are transferred between accounts

The graphic below depicts the lifecycle of RINs with respect to the market participants on the EMTS:

image credit goes to epa.gov