In Washington, D.C., the most effective way to reduce the prices American consumers are paying at the pump is to let Renewable Identification Numbers (RINs) do the job they were intended to do by stimulating increased ethanol production and blending, the Renewable Fuels Association wrote in a letter today to House Energy and Commerce Subcommittee on Environment Chairman John Shimkus (R-Ill.) and Ranking Member Paul Tonko (D-N.Y.).
“RIN credits are the engine that drives the RFS. Not only are RINs used to demonstrate compliance with annual RFS blending obligations, but they also serve as a critical economic incentive to expand the production and use of renewable fuels,” RFA explained to the lawmakers. “Studies show that higher RIN prices facilitate deeper discounting of ethanol-blended fuels (such as E15 and E85) relative to gasoline, and that wider discounts lead to greater consumption of these blends. In turn, greater demand for E15 and E85 stimulates increased production of ethanol, which leads to increased RIN generation and larger supplies,” the letter noted.