A new white paper finds evidence to challenge the assumption that the ethanol blend wall caused the 2013 spike in Renewable Identification Number (RIN) spot market prices. “The Myth of High RIN Prices as Proof of the Blend Wall,” was released by the Biotechnology Innovation Organization (BIO) and analyses EPA data on compliance of the Renewable Fuel Standard between 2010-2013. The blend wall is the point when ethanol blending in gasoline is greater than 10 percent.
“The success of the Renewable Fuel Standard has become distorted by the myth that U.S. refiners have encountered an unbreakable blend wall,” said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section. “Oil refiners, their champions in Congress, and even EPA have proposed changes to the RFS program based on this myth. Yet these changes to the RFS are aimed at solving a problem that never existed.”
Erickson continued, “Data recently made available by EPA demonstrates that obligated oil refiners and importers were able to meet RFS requirements through 2013 – even building excess RINs – despite having reached the blend wall as early as 2010 and definitely surpassing it by 2012. EPA’s delays in issuing 2014 and 2015 rules – which were in response to the assumed arrival of the blend wall – obscured this data until now. The delays in issuing rules and the proposed changes to the RFS have undercut investment in advanced biofuels and harmed developers of new technology. EPA should reconsider its proposed RFS rules for 2017 in light of the newly available data.”
The Myth of High RIN Prices as Proof of the Blend Wall finds:
- Data recently released by EPA challenges conventional wisdom that the blend wall caused RIN prices to rise in 2013.
- Refiners and importers blended ethanol into obligated gasoline volumes beyond the 10 percent limit as early as 2010.
- Refiners’ and importers’ use of compliance flexibility reveals they did not experience RIN shortages at any point.
- EPA’s rulemaking delays and unwarranted changes to the RFS based on blend wall assumptions harmed biofuel producers while providing obligated parties relief from a problem that didn’t exist.
EPA should reconsider its 2017 RFS proposed rule in light of this newly available data.