Home Energy Study Shows Capping RIN Prices Detrimental to Biofuels

Study Shows Capping RIN Prices Detrimental to Biofuels

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The National Biodiesel Board and the World Agricultural Economic and Environmental Services organization collaborated on an analysis of putting price caps on Renewable Identification Numbers, or RINs. A move like that, which is something oil refiners are in favor of, would significantly harm the production of biodiesel and related industries. NBB Vice President of Federal Affairs Kurt Kovarik says capping the price of conventional ethanol RINs would devastate the biodiesel industry, swiftly and significantly. “It would reduce the number of volumes produced and the number people employed in the industry,” Kovarik says. “Satisfying the whims of fewer than five refiners aren’t worth the resulting harm to millions of U.S. workers in American agriculture and livestock production, as well as American consumers.”

The analysis found that a cap on the price of conventional RINs would lead to a reduction of up to 300 million gallons in biomass-based diesel volumes each year, in part because these volumes would no longer be utilized for compliance with the conventional biofuels requirements. It would also lead directly to $185 million more in the cost of feed for livestock producers. The price caps would also lower the price of soybeans American farmers would get for producing their crop by 16 cents a bushel.

Vermont Democratic Representative Pete Welch, along with New Hampshire Democratic Senator Tom Udall, introduced companion legislation into Congress attempting to reform the Renewable Fuels Standard. On a press call announcing the legislation Thursday, the lawmakers were joined by Collin O’Mara, President of the National Wildlife Federation, as well as Debbie Sease, Director of the Sierra Club National Campaign.

The National Corn Growers Association says the bill seeks to kill what has been the most successful renewable energy program America has ever had. An NCGA news release says, “This bill ignores current science reflecting the significant environmental benefits of ethanol and would have a catastrophic impact on the nation’s economy, energy security, and family farmers.” The bill would immediately phase out the ethanol mandate and reduce the amount of ethanol in American fuel by up to one billion gallons. It would also help farmers return cornfields to pasture and wildlife habitat through a ten cents per RIN fee to fund a new Private Land Protection and Restoration Fund in the U.S. Treasury. It would pay easements designed to keep private land out of agricultural production and keep the lands in conservation uses, including grassland, forests, and pollinator habitat.