Cornhusker Economics Q&A on Ethanol Price Fight and Nebraska Ag April 11, 2018
The petroleum industry has launched a fierce political fight against the Renewable Fuel Standard (RFS), the regulations that require renewable fuels such as ethanol to be blended into the motor fuel supply. The industry complains that meeting those requirements has become too expensive. President Trump has been presiding over frequent White House meetings1 to address the issue, with corn-state senators leading corn/ethanol constituents in confrontation with Texas senators leading the petroleum refiners.
Contrary to claims from both sides, capping Renewable Identification Number (RIN) prices as proposed by petroleum interests would have little impact on the industry. The real threat is reduction of the blending mandates to levels below those stipulated in the 2007 legislation (which the EPA has apparently been achieving by granting waivers for small refineries).
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