Renewable Identification Numbers (RINs) are credits used to certify compliance with the Renewable Fuel Standard (RFS), which requires certain minimum volumes of biofuels to be blended into fuels sold in the U.S. There are many types of fuels covered by the RFS and so RIN credits come in different categories. One category, the D6 RIN, applies to the blending of corn-based ethanol into refined gasoline to make the gasoline-ethanol blends we pump into our cars, SUVs and pickups. In 2013, the D6 RIN price skyrocketed 100-fold in one of the most extreme cases of panic buying in any major commodity market in history. In today’s RBN blog, we examine that event and address three key questions: How did it happen, what was the solution, and why does it matter today?
We have been tracking the “magical mystery” of RINs since 2012, most recently with our four-part Misunderstanding series. Those blogs cover a lot of ground because the RIN credit system is important, complex and confusing. Fortunately, most of our focus today is on just one type of RIN, the D6 — the most basic RIN and the one with the highest volume mandate — during a narrow time window. Our story begins in February 2013, when the D6 RIN price rocketed higher, as shown in Figure 1 below.
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