Ethanol Producers Turning RINs Into Huge Savings for Consumers
May 24, 2013
Press Contact: Monte Shaw
Contrary to Big Oil’s Claims, RINs Should Save Consumers Money
JOHNSTON, IA – The Iowa Renewable Fuels Association (IRFA) today declared that contrary to Big Oil claims, RINs are being used to lower gasoline prices for consumers. Ethanol plants in Iowa are passing RIN savings on to consumers, making E85, E15 and other higher blends an attractive, low-cost option for consumers pinched by higher petroleum prices.
“Big Oil consistently touts the line that buying RINs equates to higher gas prices, but reality proves otherwise,” stated IRFA Executive Director Monte Shaw. “The blender – the seller of the RIN – can and should pass the value of the RIN through to consumers. In fact, Iowa ethanol plants are doing just that. By offering higher blends like E85 directly to retailers, Iowa ethanol plants are passing along the RIN savings and hoping that retailers will reflect the lower wholesale prices at the pump.”
One example is Absolute Energy, a 115 million gallon per year ethanol plant near the Iowa-Minnesota border. Absolute Energy is now offering E85, a fuel blend containing 85 percent ethanol and 15 percent gasoline, directly to retailers and is passing on the RIN value generated by blending ethanol.
According to OPIS, recent prices for E85 at Iowa terminals were about $2.77 per gallon, while Absolute Energy listed the price for its E85 at only $1.93 per gallon earlier this week.
“If Big Oil companies want to sell RINs to each other, stick the money in their pockets, and then use that as an excuse to raise gasoline prices, we can’t stop them,” added Shaw. “But we can expose the truth. For every RIN buyer, there is a RIN seller. And if the fuel market is competitive, then the value of the RIN should ultimately end up reducing the pump price for consumers. In Iowa we’re cutting out the middleman to ensure that happens.”
A RIN, or renewable identification number, is a free credit earned by the blender of ethanol that can then be sold on the open market to oil refiners, which use the credits to demonstrate compliance with the federal Renewable Fuel Standard (RFS).
Iowa is the leader in renewable fuels production. Iowa has 41 ethanol refineries capable of producing over 3.7 billion gallons annually, with one wet mill and two cellulosic ethanol facilities currently under construction. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.
The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.