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October 31, 2013
'Heating oil' redefined under RFS

In a final rule issued under the federal renewable fuel standard (RFS) program, the EPA has amended the definition of heating oil to include fuel oil that will be used to “heat interior spaces of homes or buildings to control ambient climate for human comfort.”

The rule will allow producers or importers of fuel oil that meets the amended definition of heating oil to generate renewable identification numbers (RINs) provided other requirements specified in the regulations are met, including new registration, reporting, product transfer document, and recordkeeping requirements applicable specifically to these fuel oils.  According to the EPA, the added requirements are necessary to demonstrate that the fuel oil volume was or will be used to heat buildings for climate control for human comfort before generating RINs.

The Agency expects the rule will allow for the generation of additional advanced and cellulosic RINs. This “will help enable obligated parties under the RFS to meet their renewable fuel obligations and offer their customers more alternative fuel products.”

Additional renewable fuel

Amendments to the Clean Air Act, which established the RFS program, focused on renewable fuel produced from qualifying renewable biomass to replace or reduce the quantity of fossil fuel present in transportation fuel. 

But Congress also provided that the EPA could establish provisions for the generation of credits by producers of additional renewable fuel not used in transportation fuel.  “Additional renewable fuel” is defined as fuel produced from renewable biomass that is used to replace or reduce the quantity of fossil fuel present in home heating oil or jet fuel. 

In essence, additional renewable fuel has to meet all the requirements applicable to qualify it as renewable fuel under the regulations, with the only difference being that it is blended into or is home heating oil or jet fuel instead of transportation fuel.  “This does not change the volume requirements of the statute itself, but it can provide an important additional avenue for parties to generate RINs for use by obligated parties, thus promoting the overall cost-effective production and use of renewable fuels,” says the EPA.

Requirements

The rule contains the following elements, which apply only to fuel oils qualifying as heating oil under the expanded definition:

  • Minimum technical specifications for qualifying fuel oils (e.g., it must be a liquid at 60 degrees Fahrenheit and one atmosphere of pressure and contain no more than 2.5 percent mass solids);
  • Detailed requirements for producer registration to ensure that the fuel oil is intended for  use as heating oil only, including the collection of affidavits from end users stating that the fuel oil is being used or will be used for the proper purpose;
  • Requirements for product transfer documents to ensure that all parties taking possession of the fuel oil are aware of its limited use and the penalties for improper use;
  • Prohibition of using fuel oil produced and designated as heating oil and for which RINs have been generated for any use other than the heating of interior spaces of homes or buildings to control ambient climate for human comfort; and
  • Quarterly reporting requirements to ensure that the volumes of renewable fuel oil for which RINs were generated were received by the end user and used for the proper purpose.

Fuel oils used to generate process heat, power, or other functions will not be approved for RIN generation under the amended definition of heating oil since these fuels are not within the scope of home heating oil.

The final rule was published in the October 22, 2013, FR.

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