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Harvard professor says key to reducing RIN prices is blending more ethanol

A Harvard study substantiates claims by renewable fuels groups that blending more ethanol is the key to reducing RIN prices.

Professor James Stock argues that perhaps the most direct way of lowering RIN’s—a federal credit refiners receive for satisfying RFS obligations—is by extending the RVP waiver to E15 and higher blends of ethanol.

Renewable Fuels Association executive vice president Geoff Cooper says the oil industry should take note.

“Because they’re obviously complaining about the cost of RINs associated with meeting the Renewable Fuel Standard (RFS).  And we have always said that the way to lower RIN prices is to blend more ethanol.  And the way to blend more ethanol is to allow E15 to be sold year-round.”

Current Reid Vapor Pressure regulations restrict the sale of E15 from the beginning of June to mid-September.

“So this paper that comes from Harvard kind of backs up our logic and our way of thinking that if EPA were to grant the same RVP waiver to E15 that E10 gets, we would expect to see more ethanol consumption.  And therefore there would be more RINs available in the marketplace, and the cost of those RINs would come down.”

Stock says if RVP parity for E15 induced even 200 million gallons of additional ethanol consumption, it could exert substantial downward pressure on RIN prices.