Ethanol Blog Harvard Professor: Year-Round E15 Sales Would Reduce Biofuel Credits Costs
by Todd Neeley (DTN The Progressive Farmer) As debate rages on about whether the price of biofuels credits in the Renewable Fuel Standard are putting small refiners out of business, a little-known analysis by a Harvard University economics professor last summer said the best way to reduce the price of those credits is to allow year-round sales of E15.
James H. Stock, a professor in the department of economics in the Harvard Kennedy School at Harvard University, wrote in a July 11, 2017, analysis, that concerns about the price of RINs could be alleviated by allowing the year-round sale of E15.
“Extending the RVP (Reid vapor pressure) waiver to E15 (and higher blends) would facilitate additional corn kernel ethanol being blended into the fuel supply, as some E10 sales are converted to E15 sales,” he writes.
“This additionally blended ethanol would make it easier to comply with the RFS obligation for blending conventional fuels, because more D6 RINS would become available for compliance. The annual conventional volumetric requirement is already at its statutory maximum of 15 billion gallons, so these additional RINs would exert downward pressure on RIN prices. Additional sales of E15, along with the continued expansion of total gasoline demand, would tend to stabilize RIN prices at a lower value, all else equal. The extent of this RIN price reduction and stabilization would depend on the success of E15 marketing and availability, paired with the RVP waiver extension.” READ MORE
RFA: Harvard professor says RVP parity will lower RIN prices (Ethanol Producer Magazine)