A new analysis from the University of Illinois shows conditions that caused high conventional biofuel (D6) RIN prices are changing rapidly and that “…it is not out of the realm of possibility for D6 RINs prices to fall back their pre-2013 level of just a few cents without making any changes to the RFS.”
According to a release from the Renewable Fuels Association, The authors argue that high D6 RIN prices have been driven by the “gap” that exists between domestic ethanol consumption (estimated at 14.5 billion gallons in 2017) and the 15-billion-gallon statutory requirement for conventional renewable fuels. The size of that “gap” continues to shrink rapidly as E10, E15, and E85 blending has expanded. Thus, as that expansion continues at a rapid pace, the “gap” will be fully closed and RIN prices will fall dramatically. As the Renewable Fuels Association has pointed out, this is exactly how the RFS was intended to work. Establishing RVP parity for E15 would certainly help accelerate the closing of that gap.
The price of RINS was a major topic of discussion at RFA’s National Ethanol Conference last week. RFA Senior Vice President Geoff Cooper moderated a panel “For your RINformation” with experts on the topic Sandra Dunphy, Weaver (aka Rinderella); Dr. Gabriel Lade, Iowa State University; and Dr. James Stock, Harvard University, who recently wrote a paper showing that RVP parity for E15 would lower RINS prices.
Learn more in this interview with Cooper –
Interview with Geoff Cooper, RFA Senior Vice President
Listen to the RINS panel at NEC –
Panel Discussion on RINS Market