US oil refiners ask EPA to limit participation in renewable fuel credit market

CVR Energy

23/01/2024 20:26

By Stephanie Kelly
       NEW YORK, Jan 23 (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  RIN-D6-US  traded as low as 71
cents each on Tuesday, compared with a record $2.00 each in
2021, LSEG data showed. 

 (Reporting by Stephanie Kelly; Editing by David Gregorio)
 ((Stephanie.Kelly@thomsonreuters.com; 646-223-4471; Reuters
Messaging: stephanie.kelly.thomsonreuters.com@reuters.net))