U.S. Ethanol RINs Reach Record Highs on Consumption Targets

Renewable Identification Numbers for ethanol rose to record levels on concern the U.S. won’t adjust consumption targets.

RINs, the credits that help the Environmental Protection Agency track whether refiners are meeting federal biofuel-use mandates, jumped 10 cents to $1.15 for grain-based ethanol and 8 cents to $1.18 for advanced RINs, which cover biodiesel and Brazilian sugarcane-based ethanol, data compiled by Bloomberg show.

The surge in RINs has been a point of contention between ethanol advocates and oil interests such as the American Petroleum Institute, which wants the U.S. to repeal the 2007 energy law that requires use of the additive. The Environmental Protection Agency said today that it sent the final rule for this year’s volume standards to the White House Office of Management and Budget last week.

“Some of these people had hopes that the volumes would get decreased and now for whatever reason, now realize that EPA isn’t changing it,” said Jim Damask, a manager at StarFuels Inc. in Jupiter, Florida.

RINs are certificates attached to each gallon of biofuel. Once refiners blend ethanol into petroleum, they can keep the RIN to submit to the EPA for compliance, or trade it to another party.

There were about 2.6 billion RINs created last year that can be carried over to this year, EPA said in a Feb. 7 notice in the Federal Register.

The U.S. will consume about 132.9 billion gallons of gasoline this year, the Energy Information Administration forecast yesterday in its Short-Term Energy Outlook.

The 2007 energy law requires refiners to use 13.8 billion gallons of ethanol this year.

Ethanol is typically blended in a formula of 10 percent of the additive and the rest gasoline. While the EPA approved blends of as much as 15 percent of the biofuel to be sold at pumps, the higher concentrations aren’t in wide use.

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