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The Economic Role of RIN Prices

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  • Bruce A. Babcock
  • Sebastien Pouliot

Abstract

The Environmental Protection Agency created a tradable commodity called RINs (Renewable Identification Numbers)-serial numbers that allow tracking batches of biofuels-to enforce biofuel mandates. To prove they have met their annual biofuel obligations under the Renewable Fuels Standard gasoline and diesel producers and importers accumulate RINs, by either buying biofuels with attached RINs or by buying detached RINs offered in the RIN market. RINs become detached when biofuels are blended with diesel or gasoline. Blenders who are not obligated parties have no use for their RINs; thus they are willing sellers in the RIN market. The price at which RINs are bought and sold is measured in cents per gallon of ethanol. In 2013, RIN prices have varied dramatically, from less than 10 cents per gallon in January to over 140 cents per gallon in July. As of late October, RIN prices for corn ethanol are about 25 cents per gallon.

Suggested Citation

  • Bruce A. Babcock & Sebastien Pouliot, 2013. "The Economic Role of RIN Prices," Center for Agricultural and Rural Development (CARD) Publications 13-pb14, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:13-pb14
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    Cited by:

    1. Luiz Gustavo Antonio Souza & Márcia Azanha Ferraz Dias Moraes & Maria Ester Soares Dal Poz & José Maria Ferreira Jardim Silveira, 2015. "Collaborative Networks as a measure of the Innovation Systems in second-generation ethanol," Scientometrics, Springer;Akadémiai Kiadó, vol. 103(2), pages 355-372, May.
    2. Pouliot, Sébastien & Babcock, Bruce A., 2014. "The demand for E85: Geographical location and retail capacity constraints," Energy Economics, Elsevier, vol. 45(C), pages 134-143.

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