Beginning January 1, 2020, any party that holds RINs must comply with the requirements of this section.

(a) RIN holdings calculation.

(1) Each party must calculate daily end-of-day separated D6 RIN holdings by aggregating its end-of-day separated D6 RIN holdings with the end-of-day separated D6 RIN holdings of all corporate affiliates in a corporate affiliate group and use the end-of-day separated D6 RIN holdings as specified in paragraph (b) of this section.

(2) Each party must calculate, as applicable, the holdings-to-market percentage under paragraph (b)(1) of this section and the holdings-to-obligation percentage under paragraph (b)(2) of this section quarterly in accordance with the schedule specified in Table 1 to §80.1451.

(3) For a corporate affiliate group containing at least one obligated party that has a holdings-to-market percentage greater than 3.00 percent for any calendar day in a compliance period, as determined under paragraph (b)(1) of this section, each party must calculate the corporate affiliate group's holdings-to-obligation percentage as specified in paragraph (b)(2) of this section.

(4) Each party must individually keep copies of all calculations and supporting information for separated D6 RIN holding threshold calculations required under this section as specified in §80.1454(u).

(b) RIN holding thresholds calculations.

(1) Primary test calculations. For each day in a compliance period, each party that owns RINs must calculate the holdings-to-market percentage for their corporate affiliate group using the method specified in paragraph (b)(1)(i) or (b)(1)(ii) of this section, as applicable.

(i) For each day beginning January 1 through March 31, calculate the holdings-to-market percentage for a corporate affiliate group as follows:

HTMPd = [(ΣD6RINd)a/(CNV__VOLTOT,i * 1.25)] * 100

(ii) For each day beginning April 1 through December 31, calculate the holdings-to-market percentage for a corporate affiliate group as follows:

HTMPd = [(ΣD6RINd)a/(CNV__VOLTOT,i)] * 100

(2) Secondary threshold calculations. For each day in a compliance period where a corporate affiliate group is required to calculate with the secondary threshold requirement under paragraph (a)(3) of this section, each party must calculate the holdings-to-obligation percentage for their corporate affiliate group using the methods at paragraph (b)(2)(i) or (b)(2)(ii) of this section, as applicable.

(i) For each day beginning January 1 through March 31, calculate the holdings-to-obligation percentage as follows:

HTOPd = [(ΣD6RINd)a/{[(ΣCNV__RVOi-1)a + (ΣCNV__DEFi-1)a + (ΣCNV__DEFi-2)a] * 1.25}] * 100

(ii) For each day beginning April 1 through December 31, calculate the holdings-to-obligation percentage as follows:

HTOPd = {(ΣD6RINd)a/[(ΣCNV__RVOi-1)a + (ΣCNV__DEFi-1)a]} * 100

(iii) As needed to calculate the holdings-to-obligation percentage in paragraphs (b)(2)(i) and (b)(2)(ii) of this section, calculate the conventional RVO for an individual corporate affiliate as follows:

CNV__RVOi = {[RFStdRF,i * (GVi + DVi)]—[RFStdAB,i * (GVi + DVi)]} + ERVORF,i

(iv) As needed to calculate the holdings-to-obligation percentage in paragraphs (b)(2)(i) and (b)(2)(ii) of this section, calculate the conventional deficit for an individual corporate affiliate as follows:

CNV__DEFi = DRF,i—DAB,i

(c) Exceeding the D6 RIN holding thresholds.

(1) Primary threshold test. A non-obligated party or corporate affiliate group that does not contain an obligated party and that has a holdings-to-market percentage greater than 3.00 percent for any calendar day in a compliance period, as determined under paragraph (b)(1) of this section, has exceeded the primary threshold.

(2) Secondary threshold test. Any party or corporate affiliate group required to calculate a holdings-to-obligation percentage under paragraph (a)(3) of this section and that has a holdings-to-obligation percentage greater than 130.00 percent for any calendar day in a compliance period, as determined under paragraph (b)(2) of this section, has exceeded the secondary threshold.

(d) Alternative gasoline and diesel production volume allowance. Parties that must calculate the secondary threshold under paragraph (b)(2) of this section may use alternative gasoline and diesel production volumes if all the following requirements are met:

(1) The party must have a reasonable basis for using the alternative production numbers (e.g., selling or acquiring a refinery or a shutdown of a refinery).

(2) When substituting the alternative production volume for the conventional RVO volume, the party must use actual production numbers for any completed quarter in the compliance period and extrapolated production numbers for any future quarters.

(3) The party must meet the applicable recordkeeping requirements of §80.1454.

(4) The party must retain documentation of the reasonable basis and the calculations used and must provide these to the auditor conducting the attest engagement under §80.1464.

(e) Exemption from aggregation requirements.

(1) A party may claim exemption from the requirement to aggregate D6 RIN holdings for any affiliate where one or more of the following apply:

(i) There is an absence of common trading-level control and information sharing with the affiliate.

(ii) The sharing of information regarding aggregation with the affiliate could lead either party to violate state or Federal law, or the law of a foreign jurisdiction.

(iii) The affiliate is exempt from the regulations regarding commodities and securities exchanges under 17 CFR 150.4(b)(7).

(2) A party must retain detailed, explanatory documentation supporting its exemption and must provide this documentation to the attest auditor under §80.1464, and to EPA upon request. Such records include, but are not limited to, the following:

(i) Documents that reflect that the parties do not have knowledge of the trading decisions of the other.

(ii) Documents that demonstrate that there are developed and independent trading systems in place.

(iii) Documents that demonstrate that the parties have and enforce written procedures to preclude each from having knowledge of, gaining access to, or receiving data about, trades of the other.

(iv) Documents reflective of the risk management and other systems in place.

(v) Documents that support an exemption under 17 CFR 150.4(b)(7).

(vi) Any other documents that support the applicability of the exemption.

[84 FR 27022, June 10, 2019]