Frequently Asked Questions

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Q.: What is a RIN?

A.: RIN is short for Renewable Identification Number and is a renewable fuel credit. A RIN credit is a serial number assigned to each gallonof renewable fuel as it is introduced into U.S. commerce. RIN credits were created by the Environmental Protection Agency’s (EPA) as part of the Renewable Fuel Standard (RFS) to track our nations progress toward reaching the energy independence goals established by the U.S. Congress. RIN credits are the currency used by obligated parties to certify compliance they are meeting mandated renewable fuel volumes. All gasoline produced for U.S. consumption must contain either adequate renewable fuel in the blend or the equivalent in RIN credits. EPA regulations require that the RIN be tracked throughout each link in the supply chain, as title is transferred from one party to the next. RINs are assigned and travel with renewable fuel until the point in time where the biofuel is blended with petroleum products to produce gasoline. Once the renewable fuel is in the gasoline,the RIN is separated and is then eligible to trade as an environmental credit.

Q.: What is renewable fuel?

A.: A renewable fuel is defined in the Energy Policy Act as a motor vehicle fuel that is produced from plant or animal products or wastes, as opposed to fossil fuel sources. Renewable fuels include ethanol, biodiesel and other motor vehicle fuels made from renewable sources.

Q.: What is RFS?

A.: RFS stands for Renewable Fuel Standard. The RFS was established as a result of the 2005 Energy Policy Act and went into effect on September 1, 2007. The RFS mandates the use of renewable fuels, such as ethanol and biodiesel, in the U.S. The first year of the RFS required that a minimum of 4.7 billion gallons of renewable fuel, prorated to the months September through December, be blended into on-road gasoline and diesel fuels. RFS is expressed as a percentage, based upon the American motorist’s fuel use in any given year. In 2007 the RFS value was 4.02% of the nation’s total on-road gasoline consumption. The Department of Energy and EPA publishes the RFS by November 30th for the upcoming year.

Q.: What is RFS2?

A.: A new RFS, known as RFS2, was enacted into law beginning in 2008 with the 2007 Energy Independence and Security Act (EISA), and signed by President Bush on December 19, 2007. RFS2 nearly doubled the 2008 value to 7.76%, or 9.0 BGY, and increases the mandated volume on an increasing schedule to 36 billion gallons per year by 2022.

The Renewable Fuel Standard for 2009 is 10.21%. This standard is used by obligated parties -- refiners, importers and blenders (other than oxygen blenders) -- to calculate their renewable volume obligation.

Q.: What is "advanced biofuel" and "biomass-based diesel"?

A.: “Advanced biofuel” and “biomass-based diesel” are new terms emerging as part the new 2009 RFS2 vocabulary.Biomass-based diesel is a specified title under “advanced biofuel.” In 2009, RFS2 mandates that 11.1 billion gallons of renewable fuels must be blended into energy supplies; 10.5 billion of which is corn-based ethanol, and the other 600 million gallons must be “advanced biofuel”, 500 million gallons of which must be biomass-based diesel. By 2012, 1 billion gallons of biomass-based diesel is required under the mandate.

Q.: Why should I use RINBROKERS to trade RIN credits?

A.: We have an extensive network of relationships with Obligated Parties, Producer, Blenders RIN brokers, energy traders and speculators who we can respresent your order to. We will consolidate your RIN order with other indications of interest in order to find the best pool of liquidity. As your broker, we are committed to representing your order in the marketplace and securing the best possible economics avilable.

Q.: What is the process of Buying RIN Credits using RINBROKERS?

A.:

It is very simple. All you have to do is tell us your EPA#, the quantity, vintage and type of RINs you want to buy and your price limit and we'll go to work on your behalf. Once we find a seller, we send you the RIN numbers so that you can review them. Upon approval, funds are wired to pay for the RINs.

Q.: What is the process for selling my RIN credits through RINBROKERS?

A.: Send us an email, call or fill out the indication of interest form on our web site with your contact information, EPA#, RIN vintage, type and limit price. We view our clients as partners and therefore hope that you view us in the same manner. If you are shopping your order through multiple brokers you are only hurting yourself. Pick a broker to represent you and give that broker a chance to get you the best price for your RINs. To proceed we ask that you send us a PTD (product transfer document) with the RINs listed (Excel spreadsheet is best) and we will run the RINs through our proprietary validation process. This makes sure they are valid RINs. Next, tell us a limit price and we will do our best to find a buyer of your RINs within your parameters.

Q.: Can RINBROKERS help me buy RIN credits disreetly?

A.: Yes, we can buy RIN credits for our own account on your behalf in order to protect your identity.

Q.: What is the new EPA Moderated Transaction System (EMTS)?

A.: The EPA is trying to simplify the process for transfering RINs and EMTS is at the core of this effort. Briefly, EMTS is a system/database maintained by the EPA to handle RIN transfer activities between interested parties. The objective is to eliminate duplicate RINs and other problems associated with the current RIN system by centralizing this aspect of the RFS. EMTS has not been implimented yet but is still under development and is being tested on a very limited basis.

Q.: What factors influence the price of RIN credits ?

A.: Demand is driven by the annual RFS standard so it is very inelastic. The price of RIN credits is affected by a number of factors in addition to the current year’s mandate of renewable fuel. The following represents a partial list factors impacting the price of RINs:Transportation cost – The cost to transport ethanol and other bio fuels plays a key role in the overall RIN value. RFS mandate – The mandated level of renewable fuel (the Renewable Fuel Standard) for the specific year establishes the demand and drives price.Vintage year – Current vintage year RINs will have more value than RINs from the prior year.Blend properties – The physical properties of bio fuels, such as octane, vapor pressure, etc., compared with that of petroleum products is a consideration.Petroleum product prices – The price of bio fuels compared with the price of petroleum products is a factor in the RIN value.Sustainability purchases – RINs purchased and then retired as a mechanism to support a sustainability initiative result in higher overall RIN prices.RIN failures – Invalid RINs in the market place result in inefficiencies and consequently higher overall RIN costs.Deadlines – The year end deadline and the overall readiness by industry can result in last hour panic and a resulting price increase.RIN prices have seen a dramatic increase from when the RFS program originally started on September 1, 2007. RIN credits originally traded at 0.25 cents each – primarily because industry did not initially understand the program. RINs values have reached as high as 10 cents each, with some speculation that the price will increase as mandates become more demanding.FUTURE VIEW: With the impending RFS2 regulations, there will be multiple types of RINs in the marketplace – each trading at a different price point. These future RIN values will be based upon similar factors as described above and as they apply to a specific type of RIN. For example cellulosic RINs (Type C™ RINs) are assured of having higher value than RINs derived from corn ethanol (Type S™ RINs -starch derived), due to availability in the market place.To receive our Daily RIN Price NewsFlash drop us an email to sales@rinbrokers.com

Q.: Why would I want to own seperated RINs (K=2)?

A.: Separated RINs, also known as renewable fuel credits, are required by domestic refiners or importers of gasoline into the United States. These obligated parties are mandated under the regulation to accumulate, either through production or acquisition, their pro rata share of RINs based on the current year’s fuel standard.Additionally, speculators may have an interest in acquiring RINs for the purpose of hedging a market position or for financial gain. This market factor has shown a small amount of activity in the early stages of the RFS program, and is sure to grow with time and understanding.The other party that RINBROKERS may also have an interest in acquiring RINs would be an individual or corporation who wishes to use RINs as a vehicle to demonstrate support for biofuel production and/or environmental stewardship. In this scenario the RIN purchaser would retire the RIN upon receipt, effectively promoting additional renewable fuel production in order to fill the void that would be created by such action.