Ethanol Blog

The 2013 D6 Renewable Identification Numbers eased in value after the Environmental Protection Agency said Aug. 6 it would extend the deadline four months for Renewable Fuel Standard 2013 blending compliance, and indicated they may adjust 2014 ethanol blending mandates. But because there is no clear direction for next year's target, 2014 D6 RINs will still retain a high value.

"Theoretically, if the RFS obligation for 2014 will adjust downward to stifle the breaching of the blend wall, then 2014 RINs should be worth much less than current," said Joshua Bailer, managing director of Next Generation commodities, a division of Atlas Commodities.

The 2013 D6 RINs, generated primarily from corn ethanol, soared on fear the compliance target for ethanol would hit the blend wall -- the saturation point for ethanol in the gasoline pool based on current gasoline standards and consumer preference, thereby limiting the amount of ethanol demand and supply of RINs.

D6 RINs have lost roughly 50% of their value from $1.46 July 18 to 78 cents Thursday morning.

However, "while the EPA has explained that it will be flexible with regard to the 2014 obligation to prevent hitting the blend wall, one must remember that the EPA has not provided direction as to the scope of the flexibility," Bailer added.

Myke Feinman can be reached at myke.feinman@telventdtn.com.

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