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Call to Action for a Truly Sustainable Renewable Future
August 8, 2013 – 5:07 pm | No Comment

-Include high octane/high ethanol Regular Grade fuel in EPA Tier 3 regulations.
-Use a dedicated, self-reducing non-renewable carbon user fee to fund renewable energy R&D.
-Start an Apollo-type program to bring New Ideas to sustainable biofuel and …

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Home » Agriculture, Business News/Analysis, Environmental Protection Agency, Federal Agency, Federal Regulation, Illinois, Marketing/Markets and Sales, Opinions, Policy, R & D Focus

RIN Stocks Part I – Valuation

Submitted by on April 17, 2014 – 3:13 pmNo Comment

by Rob Johansson and Seth Meyer (USDA/FarmDocDaily)  … It is clear that the bankable (and borrowable) nature of RINs allow obligated parties to optimize their compliance costs over time.  In the past, pre-blendwall, it was relatively inexpensive to generate and save surplus RINs allowed by the RFS and so obligated parties exceeded the annual mandates and built up an inventory of carry in RINs.  Now that gasoline consumption has fallen and the mandates have met the blendwall, we are seeing the opposite behavior; i.e., to meet compliance obligations firms are drawing down their RIN inventories, rather than building them up.    The market will determine what the optimal level of carry-in RIN stocks will be based on expected costs of compliance in future years.  Lower mandates imply lower RIN prices, which reduce the cost of carrying RIN stocks, but also reduce the need to carry such stocks.  As such, stock levels and prices for RINs should remain sensitive to any information on future mandates.  What might be an equilibrium level of stocks?  The size of current RIN stocks, implied consumption and mandates for 2014 will be considered next week in RIN Stocks Part II.  READ MORE

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