In early January, with corn ethanol Renewable Identification Numbers [RIN] trading at $0.13 apiece after spending the previous year at $0.02, I argued that the move would translate into lower risks for investors in dedicated ethanol producers. It turns out that I spoke too soon. By the end of February, the RINs had moved to nearly $1.00, and they are currently hovering around $1.02 after a brief foray up to $1.45. This has been excellent news for corn ethanol producers. One legacy of the Volumetric Ethanol Excise Tax Credit [VEETC] was corn ethanol overproduction relative to the annual volumetric mandates established by the revised Renewable Fuel Standard [RFS2]. This overproduction in turn kept RIN values near zero even as...
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