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Economist: EPA may rollback RFS proposal

An economist watching the RINS trading market says there are indications that the EPA’s proposed changes in the Renewable Fuels Standard are likely to be rolled back.

Scott Irwin, with the University of Illinois, says if traders think the ethanol mandate will exceed the blend wall, then, ethanol and biodiesel RINs prices should be close. But, starting last July, he says, they diverged sharply only to come back together, “In very late January they came rather suddenly back together in a pattern indicative of the market expecting the ethanol mandate to once again exceed the blend wall.”

Irwin says that’s an indication the EPA has listened to the comments and the political pressure that’s been put on the agency and the cuts to the ethanol mandate are likely to be rolled back but – in his words – “we just don’t know how much.” The EPA is expected to release its decision this summer.

RINs are the tracking mechanism used to make sure petroleum blenders and refiners meet their requirements under the Renewable Fuels Standard (RFS).

Interview with Scott Irwin (15:00 mp3)

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