EPA Issues Notice of Intent to Revoke Genscape's RIN Verification Authorization

By U.S. Environmental Protection Agency.

On January 4, 2017, the EPA issued a notice of intent to revoke the ability of Genscape to verify Renewable Identification Numbers (RINs) as a third-party auditor under the Renewable Fuel Standard (RFS) Quality Assurance Program. Under RFS, obligated parties and exporters must obtain and retire RINs to meet their compliance obligations and demonstrate the RFS program’s renewable fuel mandates are met. EPA is taking this action to hold Genscape accountable for failing to meet all elements of its approved Quality Assurance Plan, and for verifying millions of RINs that were fraudulently generated by two companies, Gen-X Energy Group, Inc. (Gen-X), and Southern Resources and Commodities, LLC (SRC). EPA is aggressively pursuing bad actors in the RFS program to maintain a level playing field for firms that play by the rules. Genscape has 60 days to submit written comments to EPA in response to this notice. The EPA will review and consider these comments before taking final action concerning the proposed revocation of Genscape’s ability to verify RINs under the RFS. EPA is also requiring Genscape to retire valid RINs within 60 days to replace the approximately 68 million invalid A-RINs they verified, which were then used for compliance.

In response to requests from obligated parties including refiners, EPA created a voluntary program that allows third parties to audit RINs according to EPA approved Quality Assurance Plans (QAPs) to help verify that they are valid. This program provides a supplement to the “buyer beware” liability for obligated parties under the RFS program, and also provides clarity regarding which party is obligated to replace invalid RINs. Roughly 12% of the total volume of RINs generated under the RFS program are audited by a third party under a QAP.