MEMORANDUM

SUBJECT:	Registration Approach for Fuel Producers Transitioning from Non-Food Grade Corn Oil to Distillers Corn Oil Feedstock

FROM:	Madison Le, Director, Fuels Compliance Center  -  Policy 

DATE:	July 20, 2018
		  
TO:	Docket for Renewable Fuel Standard Program: Grain Sorghum Oil Pathway Final Rule (EPA-HQ-OAR-2017-0655)

      As discussed in section IV of the preamble for the final rule titled Renewable Fuel Standard Program: Grain Sorghum Oil Pathway (hereafter "this rule"), EPA is amending the RFS regulations to add a new definition for "distillers corn oil." This new term, distillers corn oil, will replace the existing term, "non-food grade corn oil" in rows F and H of Table 1 to 40 CFR 80.1426. Fuel producers who are currently registered for pathways that include non-food grade corn oil as a feedstock will need to update their registration to include distillers corn oil feedstock through a company update in EPA's Central Data Exchange (CDX). This memo provides the process guidelines and other clarifying points on how a facility can update its registration to reflect this change. This update is required for producers to continue to generate RINs under this pathway after the effective date of this rule (which is 60 days from the date of publication in the Federal Register). 
      
      To implement this change, the EPA system will be updated to add a new feedstock code for "distillers corn oil" while also removing the code for "non-food grade corn oil." Therefore, the new code for "distillers corn oil" must be added to a party's updated registration in order for that party to be able to select the new feedstock code for RIN generation under this pathway. In advance of the effective date of this rule, EPA is requesting that companies ensure that their Responsible Corporate Officer (RCO) has an Electronic Signature Agreement (ESA) in place to be able to make timely company updates in CDX. Also, due to system safeguards that restrict one request per facility to be processed at a time, if a facility has a pending request in CDX, the RCO may have to withdraw the existing request in the queue and resubmit a new request to make this feedstock update to their facility registration. Upon the effective date, companies are expected to generate RINs using the new feedstock code for "distillers corn oil" instead of the existing code for "non-food grade corn oil." However, since EPA estimates about 200 facilities are currently registered to use non-food grade corn oil as a feedstock, and registration updates for all of these facilities have to be processed in a short period of time, we will allow an additional 60 days from the effective date of this rule for these registration updates. During this transitional period, feedstock codes for both "non-food grade corn oil" and "distillers corn oil" will be available in EMTS in order to ensure a facility continues to have the ability to generate RINs if its new registration update has not yet been processed by the effective date of this rule. However, for those facilities generating RINs after the effective date of this rule using the "non-food grade corn oil" feedstock code, the company will need to correct these events by reporting a "Transactional Error" to the updated "distillers corn oil" feedstock code. This will help ensure proper recordkeeping and accounting of RINs generated under the new "distillers corn oil" feedstock code. Although fuel producers will need to remove the non-food grade corn oil feedstock from their registration after "distillers corn oil" is added, EPA advises that these two updates be done in sequential order to ensure producers continue to have the ability to generate RINs under at least one of the feedstock codes during this transitional period. Producers may opt to add the registration update to remove the non-food grade corn oil at the next earliest opportunity to update their registration, or at their 3-year facility registration update.   

      EPA determined that updating registrations was necessary to avoid implementation difficulties that would arise from continuing to administer registrations with obsolete terms (i.e., non-food grade corn oil), and to maintain historical EMTS data quality for RINs generated in the past for fuel from non-food grade corn oil. We believe the approach described above will minimize impacts on RFS registration systems and fuel producers.
      
      In making this decision, we also considered past practice, including that a similar approach was taken when the July 2014 Pathways II rule (79 FR 42128) changed the names of the fuels and feedstocks for the biogas pathways currently listed in rows Q and T of Table 1 to 40 CFR 80.1426.
