Third-party review deadline pushed back for grandfathered plants until Dec 31, 2010

By Luke Geiver | April 15, 2010
Posted May 3, 2010

The RFS2 registration deadline for ethanol facilities may be coming too quick for grandfathered plants. The July 1 date that calls for a completed third-party engineering review has been pushed back by the U.S. EPA, giving plants that commenced construction before Dec. 18 2007, until Dec. 31 2010, to finish the engineering reviews. In April, the EPA the information on the "Questions and Answers on Changes to the Renewable Fuel Standard Program (RFS2)" section of their renewable Web page. "In an effort to reduce demand on engineering resources in the interim between promulgation of rule and July 1 2010, the agency would allow grandfathered facilities an additional six months," the EPA site said.

"EPA agreed to extend the deadline for the submission of "engineering reviews" in recognition of the fact that independent engineering expertise may be in short supply, given the six-month interval between the issuance of the final rule and the due date for registrations," said Patricia Sharkey, partner and environmental lawyer for McGuireWoods LLP. Although the additional time helps many producers, Sharkey said the problem with the engineering review extension is that plant's nonetheless have to submit all of their information and certify the truth and accuracy of the submitted information. Part of the problem that an extension fails to address is the complexity and length of the information required by the EPA for the review. "Facts are facts, but there are also many aspects of the registration rules that people can interpret differently," Sharkey said. And, the information should not be overlooked as it can ultimately determine the validity of generated RINs from a facility.

"The baseline volume stated in the July 1 2010, registration is very important because it will define the volume of renewable fuel that is eligible for grandfathered status," Sharkey said. "Any fuel produced in excess of this baseline will not be eligible for grandfathered status in the future."

The baseline volume a plant can produce doesn't however have to come from current name plate capacity, "but rather is established by conditions limiting production in a facility's air pollution control permit or, if that is not available," Sharkey said, "by the facility's peak annual production over the prior five years."

With the new registration deadline for grandfathered plants, the EPA will soon address how reviews submitted on time but are subsequently denied will be handled. Sharkey also cautioned to document any disagreements with the EPA in such case.