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§80.1431 Treatment of invalid RINs.
(a) Invalid RINs.
(1) An invalid RIN is a RIN that is any of the following:
(i) A duplicate of a valid RIN.
(ii) Was based on incorrect volumes or volumes that have not been standardized to 60 °F.
(iii) Has expired, as provided in §80.1428(c).
(iv) Was based on an incorrect equivalence value.
(v) Deemed invalid under §80.1467(g).
(vi) Does not represent renewable fuel as defined in §80.1401.
(vii) Was assigned an incorrect “D” code value under §80.1426(f) for the associated volume of fuel.
(ix) Was otherwise improperly generated.
(2) In the event that the same RIN is transferred to two or more parties, all such RINs are deemed invalid, unless EPA in its sole discretion determines that some portion of these RINs is valid.
(b) Except as provided in §80.1473, the following provisions apply in the case of RINs that are invalid:
(1) Upon determination by any party that RINs owned are invalid, the party must keep copies and adjust its records, reports, and compliance calculations in which the invalid RINs were used. The party must retire the invalid RINs in the applicable RIN transaction reports under §80.1451(c)(2) for the quarter in which the RINs were determined to be invalid.
(2) Invalid RINs cannot be used to achieve compliance with the Renewable Volume Obligations of an obligated party or exporter, regardless of the party's good faith belief that the RINs were valid at the time they were acquired.
(3) Any valid RINs remaining after invalid RINs are retired must first be applied to correct the transfer of invalid RINs to another party before applying the valid RINs to meet the party's Renewable Volume Obligations at the end of the compliance year.
(c) Notwithstanding paragraph (b) of this section, improperly generated RINs may be used for compliance provided that all of the following conditions and requirements are satisfied and the renewable fuel producer or importer who improperly generated the RINs demonstrates that the conditions and requirements are satisfied through the reporting and recordkeeping requirements set forth below, that:
(1) The number of RINs generated for a batch exceeds the number of RINs that should have been properly generated.
(2) The RINs were improperly generated as a result of a broken meter, an inadvertent temperature correction error, or an inadvertent administrative error.
(3) The renewable fuel producer or importer had in place at the time the RINs were improperly generated a quality assurance/quality control plan designed to ensure that process measuring equipment such as meters and temperature probes are properly maintained and to prevent inadvertent administrative errors.
(4) The renewable fuel producer or importer has taken any appropriate additional steps to prevent similar violations from occurring in the future.
(5) The improperly generated RINs have been transferred to another party.
(6) The renewable fuel producer or importer has not improperly generated RINs for the reasons described in paragraph (c)(2) of this section on more than five batches during any calendar year.
(7) All of the following remedial actions have been implemented within 30 days of the EMTS submission date of the improper RIN generation:
(i) The renewable fuel producer or importer retires an equal number of valid RINs with the same D Code and RIN year as the properly generated RINs, using an EMTS retire code of 110.
(ii) The renewable fuel producer or importer reports all the following information to EPA via EMTS, which EPA may make publicly available:
(A) Company name.
(B) Company ID.
(C) Facility name.
(D) Facility ID.
(E) The date the renewable fuel was produced.
(F) The date the RINs were originally generated.
(G) The number of RINs generated.
(H) The number of RINs improperly generated.
(I) RIN year.
(J) D codes of generated RINs.
(K) Batch numbers.
(L) EMTS Transaction ID of the original generation.
(M) An explanation of how the violation occurred, and why the improperly generated RINs meet the criteria in paragraph (c)(2) of this section.
(N) Steps taken to prevent similar violations from occurring in the future.
(O) Information under paragraphs (c)(3), (c)(4), and (c)(5) of this section.
(P) Any additional information the Administrator may require.
(8) The renewable fuel producer or importer maintains all records relating to the improper RIN generation and the associated remedial actions taken, including but not limited to any of the following:
(i) All information regarding the generation of invalid RINs, including information that is sufficient to demonstrate that the improperly generated RINs meet the criteria in paragraph (c)(2) of this section.
(ii) Documents demonstrating that the renewable fuel producer or importer has implemented the quality control/quality assurance plan required in paragraph (c)(3) of this section, and has taken all appropriate additional steps to prevent similar violations from occurring in the future.
(iii) All correspondence with EPA.
(iv) All EMTS transactions (Generation, Buy, Sell and Retire).
(v) All Product Transfer Documents (PTDs).
(d) If EPA determines that a renewable fuel producer improperly generated RINs but did not meet the requirements set forth in paragraph (c) of this section, then the requirements of paragraph (b) of this section apply from the moment that the invalid RINs were generated in EMTS. Once the RIN generator has identified improperly generated RINs to EPA, then EPA may remove these improperly generated RINs from EMTS.
[75 FR 14863, Mar. 26, 2010, as amended at 77 FR 1355, Jan. 9, 2012; 79 FR 42115, July 18, 2014]