Report dispels ‘myth’ of connection between blend wall and high RIN prices

The Biotechnology Innovation Organization (BIO) has released a white paper analysing data recently released by the US Environmental Protection Agency on compliance with the Renewable Fuel Standard between 2010 and 2013.

The newly available data challenges the widely accepted assumption that the blend wall – the point at which ethanol blending in gasoline exceeds 10% – caused the 2013 spike in renewable identification number (RIN) spot market prices.

“The success of the RFS has become distorted by the myth that US refiners have encountered an unbreakable blend wall. Oil refiners, their champions in Congress, and even EPA have proposed changes to the RFS programme based on this myth. Yet these changes to the RFS are aimed at solving a problem that never existed,” Brent Erickson, executive VP of BIO’s industrial and environmental section, stated.

Erickson said data recently made available by EPA demonstrates that obligated oil refiners and importers were able to meet RFS requirements through 2013 – even building excess RINs – despite having reached the blend wall as early as 2010 and surpassing it by 2012.

EPA’s delays in issuing 2014 and 2015 rules, which were in response to the assumed arrival of the blend wall, obscured this data until now.

“The delays in issuing rules and the proposed changes to the RFS have undercut investment in advanced biofuels and harmed developers of new technology. EPA should reconsider its proposed RFS rules for 2017 in light of the newly available data,” Erikson added.