U.S. Oil Refiners Ask EPA to Limit Participation in Renewable Fuel Credit Market
(Reuters) — U.S. oil refiners have asked President Joe Biden's administration to reform the renewable fuel credit program by restricting who can participate, claiming the current trading environment allows market manipulation and raises fuel costs.
Coffeyville Resources Refining and Marketing and Wynnewood Refining Company, both subsidiaries of CVR Energy, said in a petition dated Dec. 28 that such an adjustment to the program could reduce the price of the renewable fuel credits, known as RINs, and would lower the cost of fuel for U.S. motorists.
The Environmental Protection Agency (EPA), which administers the U.S. Renewable Fuel Standard, did not immediately comment on the petition.
Under the RFS, oil refiners must blend billions of gallons of biofuels into the nation's fuel mix or buy RINs from those that do. In the program's initial conception, RINs were meant to be generated only by "obligated parties" - or refiners - that over-complied with their blending mandates, then transferred to other obligated parties for the purpose of compliance, the refiners said in the petition.
The EPA now allows any person to participate in the credit scheme, including entities such as fuel retailers participating in the market for profit, the refiners argued.
"This departure from the statutory text and purpose has led to gross market manipulation," causing RIN prices to climb, disproportionately harming small oil refiners and raising fuel consumer fuel costs, the refiners said.
The refiners petitioned the EPA to initiate a new rulemaking to reform the program to ensure it complies with regulation.
U.S. renewable fuel credits traded as low as 71 cents each on Tuesday, compared with a record $2.00 each in 2021, LSEG data showed.
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