The future of the Renewable Fuel Standard (RFS) became increasingly hazy in 2017, with reports earlier in the year that the Trump administration was considering shifting the point of obligation—the party responsible for meeting the RFS's blending targets—from refiners and importers downstream to fuel blenders.
The news was alarming for the ethanol industry and large fuel retailers such as QuikTrip, Wawa, Murphy USA and Casey’s General Stores, which earn Renewable Identification Number (RIN) credits for blending biofuels, and then sell them to obligated parties to meet blending targets. Refiners have argued that escalating RIN prices are cutting into their profits and endangering their viability.
Since those initial reports, the U.S. Environmental Protection Agency (EPA) denied petitions to redefine the obligated party, and slightly raised blending volumes for 2018.
But the future of the RFS is still being written, with reports in December that the Trump administration was attempting to broker a deal between Republican oil- and corn-state senators to ease refiners’ RIN burden. Ethanol-industry groups suggested one way to reduce the RIN burden: Allow the year-round sale of E15, the 15% ethanol blend. Current Reid vapor pressure (RVP) regulations restrict its sale in most markets during the summer to flex-fuel vehicles.
“The quickest way to reduce RIN prices is to increase the supply of RINs,” said Brian Jennings, CEO of the American Coalition for Ethanol (ACE), Sioux City, S.D. “The quickest way to increase the supply of RINs is to blend more ethanol. The quickest way to blend more ethanol is to provide RVP relief for E15.”