API Study: EPA’s Proposal for Reforming RINs Exacerbates Broken Fuels Mandate
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WASHINGTON, February 26, 2019 – Today, the American Petroleum Institute released a new study that found EPA’s proposal to reform the Renewable Identification Numbers (RINs) market will only worsen program. This could ultimately harm consumers.
“API’s new study makes clear that the EPA’s RINs reform proposal both misdiagnosed the problem and provides misguided and counterproductive solutions,” said API Vice President of Downstream and Industry Operations Frank Macchiarola. “Our analysis confirms the previous findings of the EPA, as well as findings by independent analysts, that refined product prices already reflect the cost of obtaining RINs and that no significant reform of the current RIN system is needed. In fact, reforming the RINs market will exacerbate the already broken fuels mandate – the Renewable Fuels Standard (RFS) – which is costly and unnecessary for U.S. consumers.
“These suggested changes to the existing program structure could increase fuel production costs that could be then passed onto U.S. consumers, as energy companies have already made capital investments and business decisions based on the current program. While the EPA is framing these changes as a way to increase transparency, the EPA has already enacted improvements to the program that improve transparency for market participants – thus making these proposed changes potentially redundant and unnecessary.
“We urge EPA to instead focus its attention on protecting consumers from the potential damage to their vehicles that E15 use presents, and to help fix the RFS – which hasn’t evolved alongside the changing energy and economic landscape.”
API’s new report finds that RINs prices tend to react to demand for RINs, which is directly related to EPA’s approach to setting annual renewable fuel volumes. RINs are compliance credits of the RFS program and do not behave like energy or other commodity markets.
API is the only national trade association representing all facets of the oil and natural gas industry, which supports 10.3 million U.S. jobs and nearly 8 percent of the U.S. economy. API’s more than 600 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 47 million Americans. API was formed in 1919 as a standards-setting organization. In its first 100 years, API has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability.