A follow-up meeting is expected this week between President Trump and ethanol and petroleum industry supporters. At last week’s meeting the President said he stands by the RFS and backs a waiver to allow year-round use of E15. However, he’s also proposing a two-year cap on RINs. Renewable Fuel Association Senior Vice President Geoff Cooper says any RINs cap would negate the potential benefit of an RVP waiver.
A new study by the Center for Agricultural and Rural Development at Iowa State University shows a 10-cent RINs cap would result in reduced ethanol consumption, and an effective cut on 5-percent to the RFS requirement. This would lower corn prices by 25-cents per bushel.
When presented with this data, Cooper is confident the President won’t allow any deal that will hurt the ethanol industry.
The CARD study shows capping RIN prices between 10-cents and 20-cents per gallon would reduce the ethanol mandate from 15 billion to 14.3 billion gallons in 2018. Capping RIN prices at low levels makes it implausible retailers would invest in E15 and lower sales.
