U.S. EPA aims to curb biofuel credit speculation by blocking outsiders
Source: Reuters
SUSTAINABLE BUSINESS MARCH 7, 2019 / 10:58 AM / UPDATED 21 HOURS AGO
Exclusive: U.S. EPA aims to curb biofuel credit speculation by blocking outsiders
Humeyra Pamuk
3 MIN READ
WASHINGTON (Reuters) - The Environmental Protection Agency will attempt to stamp out speculation in the U.S. biofuel credit market by barring trading by non-industry players, publicizing large positions, and improving price transparency, a source familiar with the agency’s proposals told Reuters on Thursday.
The measures, included in a broader policy reform under review by the Trump administration, are intended to help U.S. oil refiners cope with the costs of complying with the U.S. Renewable Fuel Standard. Under the law, passed in 2005 and expanded in 2007 partly to help expand farmers’ market for corn, refiners must blend certain volumes of biofuels like ethanol into their fuel or purchase credits from those that do.
For years, refiners have complained that the market for such credits is vulnerable to manipulation that has at times caused prices to surge, and compliance costs to rise with them.
Under the measures, parties such as banks and financial institutions that are not part of the fuel supply chain will not be permitted to trade biofuel credits, called Renewable Identification Numbers or RINs, according to the source.
Such traders have in the past acquired large volumes of the biofuel credits in speculative plays, forcing smaller players that require credits to comply with the biofuels law to scramble to buy them, often at higher prices.
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Read more: https://www.reuters.com/article/us-usa-ethanol-epa-exclusive/exclusive-u-s-epa-aims-to-curb-biofuel-credit-speculation-by-blocking-outsiders-idUSKCN1QO20D
