RINs versus RVO: what's the difference?

Renewable Volume Obligation (RVO) and Renewable Identification Numbers (RINs) are both terms associated with renewable fuel standards and regulations in the United States, particularly under the Renewable Fuel Standard (RFS) program. However, they refer to different aspects of this program:

Renewable Volume Obligation (RVO):

RVO is a regulatory requirement that mandates the amount of renewable fuel that must be blended into the total volume of transportation fuel sold in the United States within a specific compliance period.

The Environmental Protection Agency (EPA) sets the RVO annually for different categories of renewable fuels, including cellulosic biofuels, biomass-based diesel, advanced biofuels, and total renewable fuels.

Fuel producers and importers are obligated to meet these RVO targets by blending the specified amount of renewable fuel into their petroleum-based products or by acquiring Renewable Identification Numbers (RINs) to demonstrate compliance.

Renewable Identification Numbers (RINs):

RINs are unique 38-character serial numbers assigned to each gallon of renewable fuel produced or imported. They are essentially credits that represent the environmental attributes of the renewable fuel.

RINs are used to track and verify compliance with the RVO requirements. When renewable fuel is blended with traditional petroleum-based fuels, the associated RINs are separated and can be bought, sold, or traded in the RIN market.

Fuel producers, importers, and blenders can acquire RINs from other parties to meet their RVO obligations. If they blend or use renewable fuel, they generate RINs, which they can retain or trade.

In short...

The key difference is that the Renewable Volume Obligation is a regulatory requirement specifying the volume of renewable fuel that must be used, while Renewable Identification Numbers are credits that represent the production or importation of renewable fuel and are used to prove compliance with the RVO. RINs provide a market-based mechanism for demonstrating compliance with the RVO by tracking the use of renewable fuels and allowing trading and transactions in the RIN market.