(New throughout, adds detail on PES buying RINs)
NEW YORK Feb 5 The price of Renewable
Identification Number (RIN) credits extended gains on Wednesday,
with refiner buying helping push ethanol RINs for the 2013
compliance year past the 50 cent mark for the first time since
September, traders said.
E13 RINs traded as high as 53 cents each, traders said, and
were heard traded at 52.5 cents by mid-afternoon. The credits
traded at a high of 46 cents the previous day, following several
days of steadily rising markets.
Three traders told Reuters they saw Philadelphia Energy
Solutions (PES) among refiners buying ethanol RINs in large
quantities since Thursday, when prices began to soar. PES is the
owner of a 335,000 barrels-per-day refinery complex in
Philadelphia, Pennsylvania the largest on the East Coast.
A spokeswoman for PES did not immediately return calls and
emails seeking comment.
RINs are a market component of the U.S. government's
Renewable Fuels Standard according to which refiners must blend
gasoline and diesel with a certain amount of renewable fuel,
mainly corn-derived ethanol. Refineries that blend receive RINs
and those that do not must instead buy them.
Little-noticed by the industry in previous years, RIN prices
went through the roof last year when refiners warned the amount
of renewable fuel they needed to blend into gasoline would soon
exceed what they regarded as a maximum.
They said blending more than 10 percent ethanol into
gasoline would produce a fuel dangerous for old vehicles and
instead purchased RINs to offset their obligations.
RIN prices for 2013 soared to over $1.45 last year, a stark
contrast to the 5 cents each they commonly traded at the
The U.S. Environmental Protection Agency, which oversees the
RFS, said in November it would cut blending requirements for
2014. That sent RIN prices down but they have still not returned
to lows seen in 2012.
(Reporting By Cezary Podkul and Robert Gibbons; Writing by
Sabina Zawadzki; Editing by Andre Grenon, Meredith Mazzilli and