Cruz Proposal Could Harm Renewable Fuels

DanEnergy, Industry News Release



Texas Senator Ted Cruz made a recent proposal to cap the cost of Renewable Identification Numbers (RINs) as a way to control the cost for refiners that blend renewable fuels into the nation’s gasoline supply.

A DTN report says capping the cost of RINs at ten cents each would basically all but eliminate the Renewable Fuels Standard mandate for biodiesel and would likely hurt the nation’s ethanol industry. That analysis comes from farmdoc at the University of Illinois. The Department of Agricultural and Consumer Economics at the University of Illinois also says the cap would likely violate the U.S. Environmental Protection Agency’s RFS Waiver Authority as well. Farmdoc says any biodiesel price below $2.64 a gallon would lead to no biodiesel blending, making a ten-cent cap unfeasible. Additionally, a ten-cent cap would be like waiving the biomass-based diesel mandate down to zero and would push the ethanol mandate back down to the E10 blend wall level.

Cruz offered the proposal on behalf of oil refiners, which prompted the ethanol industry to send a letter to the Trump Administration to educate them on how RINs work. RINs are generated when a qualifying renewable fuel is produced domestically or imported. A refinery then buys RINs when it’s not producing or buying enough biofuels to meet its blending obligations.

From the National Association of Farm Broadcasting News Service.