(a) Responsibility for replacement of invalid verified RINs.

(1) The generator of the A-RIN and the independent third-party auditor that verified the A-RIN are required to replace invalidly generated A-RINs with valid RINs pursuant to the procedures specified in paragraph (b) of this section.

(2) The generator of the B-RIN and the obligated party that owns the B-RIN are required to replace invalidly generated B-RINs with valid RINs pursuant to the procedures specified in paragraph (b) of this section.

(3) The generator of the Q-RIN and the obligated party that owns the Q-RIN are required to replace invalidly generated Q-RINs with valid RINs pursuant to the procedures specified in paragraph (b) of this section.

(4) The generator of an unverified RIN and the obligated party that owns an unverified RIN are required to replace invalidly generated and unverified RINs pursuant to the procedures specified in paragraph (b) of this section.

(b) Identification and treatment of potentially invalid RINs (PIRs).

(1) Any RIN can be identified as a PIR by the RIN generator, an independent third-party auditor that verified the RIN, or the EPA.

(2) For PIRs identified by the RIN generator, the generator is required to notify the EPA via the EMTS support line ([email protected]) within five business days of the identification, including an initial explanation of why the RIN is believed to be invalid, and is required to take any of the following corrective actions within 30 days:

(i) Retire the PIR.

(ii) Retire a valid RIN meeting the requirements of paragraph (d) of this section.

(3) For PIRs identified by the independent third-party auditor that verified the RIN, the independent third-party auditor is required to notify the EPA via the EMTS support line ([email protected]) and the RIN generator in writing within five business days of the identification, including an initial explanation of why the RIN is believed to be invalid.

(4) Within 30 days of being notified by the EPA or the independent third-party auditor that verified the RIN that a RIN is a PIR, the RIN generator is required to take one of the following actions:

(i) In the event that the EPA identifies a RIN as a PIR, do one of the following:

(A) Retire the PIR.

(B) Retire a valid RIN following the requirements of paragraph (d) of this section.

(C) Submit a demonstration in writing to the EPA via the EMTS support line ([email protected]) that the PIR is valid.

(1) If the EPA determines that the demonstration is satisfactory, the RIN will no longer be considered a PIR.

(2) If the EPA determines that the demonstration is not satisfactory, the PIR will be deemed invalid and the PIR generator must retire the PIR or a valid RIN following the requirements of paragraph (d) of this section within 30 days of notification by the EPA.

(ii) In the event that the independent third-party auditor identifies a RIN as a PIR, do one of the following:

(A) Retire the PIR.

(B) Retire a valid RIN following the requirements of paragraph (d) of this section.

(C) Submit a demonstration in writing to the independent third-party auditor and the EPA via the EMTS support line ([email protected]) that the PIR is valid.

(1) If the independent third-party auditor determines that the demonstration is satisfactory, the PIR will be deemed to be a valid RIN; however, the EPA reserves the right to make a determination regarding the validity of the RIN.

(2) If the independent third-party auditor determines that the demonstration is not satisfactory, the EPA will then make a determination whether the demonstration is not satisfactory, and if so, the PIR will be deemed invalid and the PIR generator must retire the PIR or a valid RIN following the requirements of paragraph (d) of this section within 30 days of notification by the EPA.

(5) Within 60 days of receiving a notification from the EPA that a PIR generator has failed to perform a corrective action required pursuant to this section:

(i) For A-RINs, the independent third-party auditor that verified the PIR is required to retire valid RINs meeting the requirements of paragraph (d) of this section.

(ii) For Q-RINs, B-RINs, and unverified RINs, the party that owns the invalid RIN is required to do one of the following:

(A) Retire the invalid RIN.

(B) If the invalid RIN has already been used for compliance with an obligated party's RVO, correct the RVO to subtract the invalid RIN.

(c) Failure to take corrective action. Any person who fails to meet a requirement under paragraph (b)(4) or (b)(5) of this section shall be liable for full performance of such requirement, and each day of non-compliance shall be deemed a separate violation pursuant to §80.1460(f). The administrative process for replacement of invalid RINs does not, in any way, limit the ability of the United States to exercise any other authority to bring an enforcement action under section 211 of the Clean Air Act, the fuels regulations at 40 CFR part 80, or any other applicable law.

(d) The following specifications apply when retiring valid RINs to replace PIRs or invalid RINs:

(1) When a RIN is retired to replace a PIR or invalid RIN, the D code of the retired RIN must be eligible to be used towards meeting all the renewable volume obligations as the PIR or invalid RIN it is replacing, as specified in §80.1427(a)(2).

(2) The number of RINs retired must be equal to the number of PIRs or invalid RINs being replaced, subject to paragraph (e) or (f) of this section if applicable, and §80.1470(c).

(e) Limited exemption for invalid B-RINs verified during the interim period.

(1) In the event that an obligated party is required to retire or replace an invalid RIN that is a B-RIN pursuant to paragraph (b) of this section, the obligated party will be afforded a “limited exemption” (LE) equal to two percent of its annual Renewable Volume Obligation (RVO) for calendar years 2013 and 2014 during the interim period.

(2) Limited exemptions are calculated as follows:

LECB,i = 0.02 × RVOCB,i

LEBBD,i = 0.02 × RVOBBD,i

LEAB,i = 0.02 × RVOAB,i

LERF,i = 0.02 × RVORF,i

(3) If the number of invalidly generated B-RINs required to be retired or replaced in a calendar year is less than or equal to LE as calculated in paragraph (d)(2) of this section, the entire RIN retirement obligation is excused.

(4) If the number of invalidly generated B-RINs required to be retired or replaced in a calendar year is greater than LE as calculated in paragraph (d)(2) of this section, the retirement of a number of B-RINs equal to two percent of the obligated party's RVO is excused.

(5) The limited exemption for B-RINs applies only in calendar years 2013 and 2014 during the interim period.

(f) Limited exemption for invalid Q-RINs.

(1) In the event that an obligated party is required to retire or replace an invalid RIN that is a Q-RIN pursuant to paragraph (b) of this section, the obligated party will be afforded a “limited exemption” (LE) equal to two percent of its annual Renewable Volume Obligation (RVO) for calendar years 2014, 2015, and 2016.

(2) Limited exemptions are calculated as follows:

LECB,i = 0.02 × RVOCB,i

LEBBD,i = 0.02 × RVOBBD,i

LEAB,i = 0.02 × RVOAB,i

LERF,i = 0.02 × RVORF,i

(3) If the number of invalidly generated Q-RINs required to be retired or replaced in a calendar year is less than or equal to LE as calculated in paragraph (d)(2) of this section, the entire RIN retirement obligation is excused.

(4) If the number of invalidly generated Q-RINs required to be retired or replaced in a calendar year is greater than LE as calculated in paragraph (d)(2) of this section, the retirement of a number of Q-RINs equal to two percent of the obligated party's RVO is excused.

(5) The limited exemption for Q-RINs applies only in calendar years 2014, 2015, and 2016.

(g) All parties who retire RINs under this section shall use the forms and follow the procedures prescribed by the Administrator.

[79 FR 42123, July 18, 2014]