During a Renewable Fuels Standards meeting he hosted May 8, President Donald Trump agreed to a plan to place Renewable Identification Numbers (RINs) on ethanol exports. This move got support from the oil industry, but backlash from ethanol.
“NCGA has opposed the RIN credits on exports. Last fall, Administrator Pruitt stated that they would not pursue this path,” Kevin Skunes told the American Ag Network. Skunes is President of the National Corn Growers Association and a grower from Arthur, North Dakota. “We believe that the RINs for exports threaten the trade markets and impact farmers economic livelihoods. Our research shows this would result in corn losses of nearly $28 billion over the next four corn marketing years. That’s an immediate 56 cents a bushel drop in corn prices, so that would be devastating.”
He says this move goes against what the RINs were originally designed to do.
“We’re just lowering the renewable volume obligation number, is really what we’re doing here with export RINs,” he said. “I think what they’re meaning for it to do is, Senator Cruz has thought that the price of RINs was too high.”
“We believe that getting more ethanol into the market, maybe through the Reid Vapor Pressure, would then naturally lower the price of RINs,” Skunes said. “We don’t believe that this is the way that that should go about lowering the price of RIN. I think that that’s what the intention is–that it would use up more RINs, therefore there’d be more RINs on the market. We believe selling more domestic ethanol is what the RFS was designed to do. It was never designed to tie RINs to export ethanol.”
On the topic of EPA waivers for small refiners, Skunes says there are other ways the small refiners and the EPA could have handled things.
“We believe that the small refiners have not had to show economic harm to get the waivers. Over the course of the RFS, there has been a handful each year of small refiners that have proved economic hardship and they’ve been granted a waiver. It appears to us now that EPA has just gone out and granted waivers to the refiners that applied for them and they’re not having to show economic harm,” he said.
“If, at the start of the renewable fuels standard, if all of these refiners would have invested in blending infrastructure to blend ethanol into their fuel, they would have been making money,” Skunes continued. “Ethanol has just about always been cheaper than gas. They could put in the blending infrastructure, buy ethanol, they would then get the RIN, which is the renewable identification number that we’re talking about, that would come to them for free, that they would turn into the EPA. So, we just believe that it’s just not right for the EPA to grant these blanket waivers.”
Listen to the full interview in the May 19 podcast.