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Ag economist: RIN cap would have ‘dramatic’ impact on RFS volumes

University of Illinois ag economist Scott Irwin says Texas Senator Ted Cruz’s proposal to cap the price of biofuel credits—or RINs—at ten cents would have a “dramatic” impact on Renewable Fuel Standard volumes.

It would be especially devastating for the biodiesel industry, Irwin says.

“My quick calculations indicate that a ten cent RIN cap would shut down the entire U.S. biodiesel industry,” Irwin says. “I don’t know how to get more dramatic than that.”

Irwin says Cruz’s proposal would also hurt corn-based, conventional ethanol by pushing the mandate down to the level of the E10 blend wall or lower.

President Trump has reportedly called on both sides of the debate to find a “win-win” compromise solution. That’s not as easy as it sounds, Irwin says.

“As it’s currently set up, there is no such ‘win-win’ solution for the RFS. You have to have the higher RIN prices if you’re going to keep the volumes where they are,” he says. “There’s just no way to kind of square that circle without fundamentally going in, rewriting the original RFS statutes, and fundamentally changing the nature of the RFS.”

Cruz proposed capping RIN (Renewable Identification Number) prices at ten cents as a way to control RFS compliance costs for oil refiners.

AUDIO: Scott Irwin