Biotechnology Innovation Organisation report dispels myth of the blend wall
Published by Rosalie Starling,
Editor - Hydrocarbon Engineering
Hydrocarbon Engineering,
The Biotechnology Innovation Organisation (BIO) has released a new white paper, 'The Myth of High RIN Prices As Proof of the Blend Wall', analysing data recently released by the EPA on compliance with the Renewable Fuel Standard between 2010 and 2013 (the latest year for which compliance is complete). 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.
Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section, stated, “The success of the Renewable Fuel Standard 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 program based on this myth. Yet these changes to the RFS are aimed at solving a problem that never existed.
“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 definitely 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.”
BIO’s new white paper finds:
- Data recently released by EPA challenges conventional wisdom that the blend wall caused RIN prices to rise in 2013.
- Refiners and importers blended ethanol into obligated gasoline volumes beyond the 10 percent limit as early as 2010.
- Refiners’ and importers’ use of compliance flexibility reveals they did not experience RIN shortages at any point.
- EPA’s rulemaking delays and unwarranted changes to the RFS based on blend wall assumptions harmed biofuel producers while providing obligated parties relief from a problem that didn’t exist.
- EPA should reconsider its 2017 RFS proposed rule in light of this newly available data.
The white paper is available here.
Read the article online at: https://www.hydrocarbonengineering.com/clean-fuels/10102016/biotechnology-innovation-organisation-report-dispels-myth-of-the-blend-wall/
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