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McGladrey & Pullen’s (McGladrey) ethanol team has reviewed the Renewable Fuel Standard (RFS) and has noted significant compliance issues not otherwise contemplated.

Presentation materials related to renewable identification numbers (RINS) issued by the Environmental Protection Agency (EPA) have noted that the attestation provisions of the RFS (collectively referred to as “Regulations”) are extended until May 2009 (the filing date of the 2008 annual RINS report) and for all practical purposes, that was the intent of the Regulations. The literal reading of the Regulations indicates this extension only applies to “obligated parties.” Other parties referred to as “plants” and “non-obligated parties,” have been omitted from this extension. Initial correspondence with the EPA indicates the EPA is aware of this issue and is working on a corrective measure — the timing of which is unknown.

The EPA presentation materials also noted that the Regulations anticipated the concept of statistical sampling of the underlying data for purposes of the RINS attest engagement for “obligated parties” reports. The literal reading of the procedures indicates that statistical sampling is not an option for “plants” and “non-obligated” parties. Further correspondence with the EPA indicates that the EPA is aware of this second issue as well. The resolution on the latter issue appears to be more cumbersome and will require an amendment to the Regulations.

With the first annual report due in May 2008, the McGladrey ethanol team will continue to actively pursue these issues and share the insight gained through correspondence with the EPA and others.

The McGladrey ethanol team is focused on serving your industry. We work with ethanol producers, as well as other ethanol industry leaders and stakeholders, to help shape the rapidly changing environment. This team understands the characteristics unique to this industry and has the experience necessary to address compliance issues and other ethanol industry-specific questions that may arise.

If you would like to set up an appointment with a McGladrey advisor to discuss this issue, please contact Cristina Hurley at 319.896.5415 or cristina.hurley@rsmi.com.

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