Biofuel Groups and Others Reject Sen. Cruz’s Idea of a 10-Cent RIN Price Lid
Source: By Chris Clayton, DTN/Progressive Farmer • Posted: Monday, December 18, 2017
The proposal from the Texas senator, negotiating on behalf of oil refiners, spurred major players in both biofuels and commodity crops industries to send a letter Friday to President Donald Trump detailing why the RIN market exists, how it is operated by EPA, and some of the problems EPA has in providing transparency on RIN trading.
Most importantly, the letter praised President Trump for his support of the biofuels industry and reiterated the need to ensure any policy changes don’t undercut billions of dollars in biofuels infrastructure that has been put in place since the Renewable Fuel Standard was created.
“There are ways to address RIN values for refiners without undercutting the RFS and rural America. We have been working on many of them for years, and we would welcome the opportunity to move these ideas forward,” stated the letter, which was signed by a collection of 89 ethanol companies and trade groups, as well as farm organizations and agricultural companies.
The letter comes after Cruz floated a proposal to the White House that would cap the RIN price at 10 cents each. In comparison, the D6 RIN was trading at 71 cents Friday afternoon, after falling from an opening price of 74.5 cents. RIN prices have been falling since briefly hitting $1.09 in late October.
RINs are generated when a qualified renewable fuel is either produced or imported. RINs then are bought within the refinery industry by companies that are not producing or buying enough renewable fuels to meet their blend volumes under the Renewable Fuel Standard. There are several nested categories for RINs depending upon the renewable — such as corn ethanol or biodiesel — which do have different values. D6 is considered the baseline RIN.
In a proposal for the biofuels industry, Cruz proposes the EPA would sell 10-cent, fixed-price waiver credits that would qualify as RINs and satisfy a petroleum blender’s renewable volume obligations. The proceeds from these 10-cent waiver sales then would go specifically to help pay for renewable-fuel blending infrastructure, tied to an existing program such as the Biofuel Infrastructure Partnership or a similar fund.