25 Jul 2016

New RINs Master and Single Trade Agreement Version 2.0 Now Available

July 2016 — Leadership for Energy Automated Processing (“LEAP”) is pleased to announce the publication of VERSION 2.0 of the:
• LEAP MASTER AGREEMENT FOR PURCHASING AND SELLING RENEWABLE IDENTIFICATION NUMBERS; and
• LEAP SINGLE TRADE AGREEMENT FOR PURCHASING AND SELLING RENEWABLE INDENTIFICATION NUMBERS.

The “RINs Master Agreement” and the “RINs Single Trade Agreement,” respectively, are available for voluntary use by participants in the market for Renewable Identification Numbers (“RINs”) in the United States of America. The documents can be downloaded free of charge from the LEAP website at http://www.energyleap.org/document-downloads/.

The new versions were published to: (1) address the affirmative defense and 2% limited exemption for replacing invalid Q-RINs afforded under the Quality Assurance Program (“QAP”); and (2) correct a drafting error in the second paragraph of Section 7.2. The LEAP working group considered the merits of subtracting the Buyer’s 2% exemption from the Seller’s obligation to replace invalid Q-RINs, but ultimately, a consensus was reached that the benefit of the Buyer’s 2% exemption should not be transferred to the Seller. The main rationale underlying this decision was because: (i) the Seller is arguably the more culpable party (or at least in a better position to determine the validity of the RINs compared to the Buyer), (ii), the original intent of the 2% exemption was to benefit the Buyer, not the Seller; and (iii) the difficulty in verifying the amount of Invalid Q-RINs would be covered by Buyer’s 2% exemption in addition to how the Buyer allocated the 2% exemption across multiple Sellers.
The RINs Single Trade Agreement was modified to correspond with the changes made to the RINs Master Agreement.

The LEAP RINs Master Agreement and the RINs Single Trade Agreement and their new versions were prepared by a Committee comprised of representatives from LEAP member companies and non-member participating companies. The Committee believes that the Agreements represent an unbiased set of terms and conditions that provide legal and operational clarity for the rights and obligations of the buyer and seller of RINs.

LEAP’s mission is to promote efficient and reliable transaction processing within the energy trading industry. More information about LEAP and how to join, including our Limited Project Participation option, is available at www.energyleap.org.  Membership in LEAP is open to energy trading, service and association entities on a nondiscriminatory basis. All members must be legal entities, not natural persons.

[1] The templates may require revision and further customization by market participants depending on their individual commercial and legal objectives for each transaction. Parties should consult their own legal counsel and other professional advisors when using the template to effect transactions.