RIN Values Fall 13% to 15% on RVO Rumor, EPA to Urge 2022 RVO Above 2021

According to an article released earlier in the day by Reuter’s, the US EPA is expected to recommend lowering renewable volume obligations (RVOs) below 2020 levels. This shouldn’t be a surprise to industry followers.  While there had been high hopes that the Biden administration would be more supportive to biofuels than the Trump administration, RVO determination has always been a contentious issue that transcended party lines.

Biden appears to be following the Obama/Biden playbook from 2013.  This was the last time RIN values were seriously plagued by the ethanol-gap.  The ethanol-gap occurs when ethanol blending alone cannot meet its implied mandate. 

Refiners are limited to a 10 percent ethanol blend, often called the blend-wall.  Volumes required beyond the blend-wall become an implied D4 obligation. This causes ethanol D6 RINs to trade in close…