"Multiple producers have already enlisted our QAP-A services to assure all their RINs as A-RINs to maximize the value in the market,” says Robert Barton, Managing Director of Agriculture and Biofuels at Genscape.
Louisville, KY (PRWEB) February 26, 2013
Genscape is the first service provider pre-registered under the EPA's quality assurance plan (QAP) program for A-RIN and B-RIN assurance. The pre-registration continues to reinforce Genscape's market leadership in providing RIN assurance services to renewable fuel producers and obligated parties.
The proposed EPA rule provides obligated parties retiring A-RINs and B-RINs eligibility for an affirmative defense against civil liability for future RINs invalidity. As an added benefit for the robust due diligence required for A-RINs, obligated parties are not required to replace invalid A-RINs. A unique feature of the EPA program allows RINs to be qualified for A- or B- status during the period between the rule proposal and the final rule expected in late summer 2013.
“To get the benefits of A- and B-RINs, obligated parties must verify RINs according to the proposed QAP requirements during the period between the proposed and final rule,” said Larry Schafer of the Diamond Group, a well-known policy consultant to the renewable fuels industry. “This enables the industry to start seeing the benefits of the program today," added Schafer.
As part of the EPA quality assurance plan program for A-RINs, the QAP provider must provide a financial backstop for replacing A-RINs if they later become invalid. This involves a significant financial commitment considering the replacement obligation is for the 5-year life of the RIN and the RIN must be replaced with a valid A-RIN at market price. Genscape’s financial RIN replacement service is further backed by its $2.5 billion parent company, DMGT. “The QAP provider having long term financial stability to stand behind the A-RIN is the key to creating the confidence and liquidity the market wants. The confidence generated by a Genscape A-RIN benefits downstream trading and elevates a producer with the most valuable type of RIN,” says Robert Barton, managing director of Agriculture and Biofuels at Genscape.
In today’s market, Genscape A-RIN assurance can be obtained for about $0.02 per RIN. At a minimum, market parity is expected between today's “Tier 1 RINs” and A-RINs. For producers that have been taking a five-cent or 10-cent or even 15-cent discounts the A-RIN provides a significant advantage.
“While the affirmative defense provided by a B-RIN is a plus, the majority of market participants we have spoken to are looking for a guaranteed RIN, something they can retire for their RVO and forget about it. That is finally accessible in the form of a QAP-A RIN,” says David Dunn, a broker with Progressive Fuels Limited (PFL).
To provide flexibility in a transitional market, Genscape offers renewable fuel producers the option to select A-RIN assurance on a transaction by transaction basis when needed over and above B-RIN assurance.
Producers may also choose to warrant all RINs as A-RINs. “Multiple producers have already enlisted our QAP-A services to assure all their RINs as A-RINs to maximize the value in the market,” Barton added.
Genscape uses the same cost-effective ongoing monitoring to validate B-RINs. The service is provided at comparable prices to a QAP requiring quarterly audits. As an additional cost benefit, with proprietary monitoring technology, producers are saved the hassle of providing a stream of documents that many producers have estimated would cost them an entire full-time employee.
"For a producer, when you compound the direct fee for a QAP quarterly audit with the lost productivity for audits and site visits and scanning documents, Genscape monitoring is the most cost-effective, time-saving option."
Additionally, B-RINs with ongoing monitoring provide more timely, better quality assurance for obligated parties, who are ultimately liable for replacing invalid B-RINs.
"For an obligated party, if I can get a B-RIN that has been qualified with ongoing monitoring versus a 100-day-old audit, the choice is obvious. The quality of due diligence matters greatly for a B-RIN."
To accelerate industry adoption and to simplify RIN management for obligated parties Genscape will be providing the RIN Integrity NetworkTM platform to the current 46 obligated party customers for no additional charge. “At this point it’s more important to get producers who are doing things the right way exposure to obligated parties and help the industry take advantage of the benefits in the period between the proposed and final rule,” says Barton. “It also simplifies things for obligated parties as the RIN Integrity NetworkTM platform provides a central system for QAP’d RINs prior to this information being added to the EMTS” Barton added.
Genscape is the leading global provider of energy information for commodity and financial markets. Utilizing patented technologies and proprietary algorithms, Genscape provides accurate & timely data on capacities, flow and utilization for all major energy commodities. Genscape's RIN Integrity Network™ is the industry’s most robust quality assurance program (QAP) for RIN verification. The company’s goal is to reestablish a liquid RINs market by restoring integrity to RINs, providing better fundamentals as foundation for market transparency and establishing an electronic marketplace to make transactions of validated RINs more secure and efficient. Genscape is the official corporate partner of the National Biodiesel Board (NBB) for RIN integrity. Find out more about the RIN Integrity NetworkTM at http://www.genscape.com/biodiesel-rin-integrity-network.
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