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ISU study: RIN/RVP deal would reduce ethanol demand and corn prices
Photo courtesy Iowa Corn
A new study shows any action to artificially cap RIN prices in exchange for an E15 RVP waiver would reduce ethanol demand and lower corn prices by around 25 cents per bushel.
The analysis, which was conducted by the Center for Agricultural and Rural Development (CARD) at Iowa State University, follows a series of White House meetings on the RFS and RINs. Texas Senator Ted Cruz has proposed capping RIN prices at 10 cents, potentially in exchange for an RVP waiver for E15.
The CARD researchers say while year-round sales of E15 would encourage retailers to sell the fuel, capping RIN prices would reduce consumption of E15 and E85. They say that would likely reduce the effective ethanol mandate from 15 billion gallons to 14.3 billion gallons in 2018. Unless increased ethanol exports compensate for the reduced mandate, the researchers say corn prices would decrease under the proposed RIN cap.
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