Allegations that major Wall Street firms are responsible for driving up the price of Renewable Identification Numbers (RINs) have South Dakota lawmakers calling for closer regulation of the RIN market, reported the Argus Leader this week.
Sen. Tim Johnson (D-SD) was reported as saying “Like commodity markets, the RINs market is not immune to abuse or bad actors, and the (Environmental Protection Agency) and other regulators should work to ensure proper controls and prevent market abuse.”
EPA developed the RIN system to ensure that biofuels are blended by obligated parties (refiners, blenders or importers) to meet volume requirements under the Renewable Fuel Standard. RINS can be sold or traded and used by an obligated party.
“We share the concern expressed by Senators Johnson and Thune [Sen. John Thune (R-SD)] that speculators and oil companies may be exploiting a thinly-traded and opaque RIN market for their own financial gain,” said Brian Jennings, executive vice president, American Coalition for Ethanol.
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“While oil companies lobbied Congress to keep the RIN market largely free of oversight, EPA has the authority to more closely monitor RIN transactions and insist upon more transparency and openness in the RIN market,” Jennings said.
Jennings added that the simplest way to remove concerns about RIN prices would be for oil companies to “stop dragging their feet” about making E15 and E85 available to consumers. “The fact is these blends have become more common in recent weeks, and as a result, RIN prices are just half what they were at their peak this summer,” Jennings said.
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