The EPA’s (Environmental Protection Agency) Renewable Fuel Standard program impassioned concerned parties on both sides of the biofuel policy debate this past week. There has been an uptick in the news with the ongoing concern regarding refineries and their ability to comply with the RFS in a manner that is economically feasible. The Renewable Fuel Standard is a federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels (biofuels – i.e. ethanol, or biodiesel) in order to reduce greenhouse gas emissions while reducing reliance on imported oil. In 2010, the EPA established a process for companies to petition for new fuels pathways to qualify for the Renewable Fuel Standard.
A RIN (Renewable Identification Number) is a serial number attached to a batch of biofuel for compliance purposes as required by the EPA. As part of the RFS, obligated parties must obtain sufficient RINs for each category in order to demonstrate compliance with the RVO (Renewable Volume Obligation) for that compliance period.
As the debate heats up on whether to implement a price cap on the biofuel credits or to increase the level of ethanol blended into gasoline, it is safe to say, RIN prices have had quite the volatile week with prices dropping from the mid $0.60s to the upper $0.40s over that time frame. As obligated parties and producers clamber for President Trump’s support, the consumer may feel the impact with fluctuating prices for fuel across the country.