Market News & Headlines >> Trump Set to Shift Ethanol Blending Obligation

President Trump is reportedly set to shift the regulatory burden of complying with the U.S. renewable fuels standard (RFS) to fuel blenders and away from refiners and importers.

Renewable Fuels Association CEO Bob Dinneen said on Tuesday that a Trump administration official told the trade group a pending executive order would shift "the point of obligation" from refiners to position holders at the terminal. "Despite our continued opposition to the move, we were told the executive order was not negotiable," he told Reuters News Service. 

Oil refiners have been seeking this change in the RFA rules for years, as they say the RFS creates undue extra costs for them. Some refiners don’t have fuel blending capabilities and are forced to buy credits called renewable identification number (RINS) in order to comply with the RFS. The price of RINS has spiked at times and there have been numerous incidences of RINS fraud. 

The news sent the price of renewable biofuel (D6) RINS plummeting to as low as 30 cents on Tuesday morning from 47-48 cents on Monday, while refiner stock prices rose. 

There are reports the RFA has agreed to support the shift in exchange for a pledge from the administration that it will grant a waiver allowing E-15 gasoline blends to be sold year around in U.S. markets.  However this has not been confirmed. 

An unnamed source told Reuters that the White House has assured the RFA that biofuels program changes would also include moves to support ethanol that could include a summertime E15 waiver as well as support for the biodiesel producer tax credit.