Texas Sen. Ted Cruz proposed a fixed-price ethanol credit that EPA would sell at 10 cents a piece, and that refiners could use to satisfy the Renewable Fuel Standard. Biofuel makers and farm groups responded with a letter to President Trump that said there are ways to handle problems with the credits, called RINs, “without undercutting the RFS and rural America,” reported DTN/Progressive Farmer.
A RIN is created for each gallon of renewable fuel that is produced in the United States or is imported. There is a market in buying and selling RINS. The basic RIN sold for 71 cents on Friday. Prices have been declining since an October peak of $1.09. In Cruz’s plan, the EPA would use proceeds from the sale of RINs to pay for equipment and facilities to blend renewable fuels into gasoline and diesel fuel.
A Nebraska state agency says ethanol prices averaged 98 cents a gallon wholesale compared to $1.99 a gallon for unleaded regular gasoline.
The biofuel trade group Growth Energy said a 10-cent RIN would sabotage the RFS: “The ready solution to Sen. Cruz’s stated concern is to blend more ethanol and send clear regulatory signals about the future growth of biofuels under the RFS.” The oil industry says the gasoline market is saturated at the traditional blend of 10 percent ethanol. Some refiners say they spend millions of dollars on RINs because they have blended all the ethanol they can.