RIN prices fall after White House RFS meeting

Compliance credits for federal fuel blending mandates tumbled to a two-year low today following a White House meeting on the program.

Senators representing both refiners and biofuel groups left a small White House meeting touting support from President Donald Trump on changes to US fuels policy. But details continued to elude all sides battling over the future of the Renewable Fuel Standard (RFS).

The Argus assessed cost for the basket of renewable identification numbers (RINs) used to prove compliance with the program fell below 4¢/USG for the first time since November 2015, closing today at 3.92¢/USG.

US senators Chuck Grassley (R-Iowa), Ted Cruz (R-Texas), Joni Ernst (R-Iowa) and Patrick Toomey (R-Pennsylvania) met with Trump today in the latest high level meeting on RFS over the past six months.

The White House had no immediate comment on a day that included exiting a joint treaty curtailing Iranian nuclear ambitions and proposing billions of dollars in changes to the US budget. EPA referred questions on the meeting to the White House.

Cruz and Toomey said Trump supported allowing exported biofuels to produce RINs, increasing the supply of credits without requiring any additional US consumption. A "final decision" supported by Trump would include RINs generated from exported ethanol in addition to gallons blended with domestic fuel, Cruz said in a tweet.

The idea, supported by US independent refiner Valero and repeatedly rejected by Grassley, Ernst, and other agriculture-state senators, would increase the supply of RINs without increasing domestic consumption of the fuel.

Adding RINs to exports would face immediate legal and trade challenges, Renewable Fuels Association chief executive Bob Dinneen said today. Farmers and biofuel producers would bear the brunt of complaints from other countries.

"In no way will that ever be acceptable or considered a win for our industry," Dinneen said

Grassley focused on continued support for EPA to relax air quality standards preventing the sale of 15pc ethanol blends of gasoline in the peak summer driving months.

The group also discussed preventing deep cuts to US renewable fuels demand from EPA waivers to the mandates for small refineries, Grassley said. Such a revision would face immediate legal challenges following the record number of refineries receiving exemptions this year, refinery sources said. Such a change would undo any relief sought by refiners, Toomey said.

Senators were waiting for more details from Pruitt and from US agriculture secretary Sonny Perdue.

"Any fix can not hurt domestic biofuels production," Grassley said following the meeting.

Four previous high-level meetings on the program ended without compromise or a change in policy. An April session with Pruitt and Perdue neither determined a path forward for the administration nor returned the issue to Congress, where legislators say the program's future belongs.

Compliance costs associated with the program have tumbled as the high-level meetings progressed. Argus-assessed costs associated with the program have fallen from 10.1¢/USG at the beginning of December to today's 3.92¢/USG close.