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A coalition of U.S. farmers, ethanol producers and fuel retailers has asked the Environmental Protection Agency to reject CVR Energy’s proposal (NYSE: CVI) request to change the renewable identification number exchange program, Dow Jones reported Tuesday.
Two refineries owned by CVR Energy (CVI), Coffeyville and Wynnewood Refining, asked the EPA to adopt a rule that limits the obligated parties that can trade RINs, while maintaining the current system that allows “an illegal market in RINs in which RINs are traded at hundreds of times their cost of production to the benefit of market speculators, criminals, owners of large retail chains and vertically integrated RIN refineries.
In a letter to the EPA, industry groups, including the Renewable Fuels Association and the National Farmers Union, said the CVR (CVI) requirement is “contrary to [Renewable Fuel Standard] political objectives [and] legally free from any objective reading of the enabling law,” despite having “disastrous impacts on renewable fuel producers, fuel retailers and resellers, farmers, obligated parties and consumers in the form of higher prices at the pump.”
The groups said the decision to limit the parties that could trade RINs would effectively result in a “wide gap between bids and offers for RINs” and result in “much more volatile RIN markets, with highly concentrated market power in the hands of only a few market participants.”