The rising cost of biofuels has prompted the biggest U.S. independent refiner to ask the White House to waive ethanol usage requirements.
In a letter issued to the Environmental Protection Agency (EPA) on Tuesday, Valero Energy (VLO) expressed an urgent need for the waiver. The third largest ethanol producer’s CEO noted that waiving mandated ethanol volumes would “lower the cost to the consumer and make the marketplace fair,” Bloomberg noted.
Under current federal rules, refiners must add 13.8 billions of ethanol to gasoline this year and 14.4 billion gallons in 2014. The refiners receive certificates indicating compliance. Those certificates can be traded.
The market for the Renewable Identification Numbers (RIN) attached to ethanol blended gallons of gas have become a hot property as biofuel prices climb. RINs have seen their prices jump by a factor of eight this year.
In March, media reports noted that the price of including corn-based ethanol in gas had jumped sharply and was likely to push gas prices higher in the near term.
Shares of Valero fell more than 1% in Wednesday midday trading.
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