Valero Chief Executive Officer Bill Klesse has sent a letter to Environmental Protection Agency (EPA) Administrator Gina McCarthy asking for the ethanol mandate to be waived. Valero is the world’s largest independent refining company and is the third largest ethanol producer in the US.
The letter declares ‘we need a waiver now,’ and reads that the administration has ‘the flexibility to waiver volumes which will lower the price of RINs now, will lower the cost to the consumer and make the marketplace fair.’
Renewable Identification Numbers
At the moment refiners are required by US law to use 13.8 billion gal. of ethanol. Renewable Identification Numbers (RINs) are linked to each gallon of ethanol to make sure that compliance is monitored. To show that the ethanol compliance levels have been met the company can retain the certificates and if they produce more than required sell them on. This year alone, RIN prices have risen by more than eight times the price at the start of the year. The Valero letter pointed out that this is because of falling gasoline demand and higher biofuel consumption targets.
Adapted from a press release by Claira Lloyd.