NEW YORK, May 2 (Reuters) - Refining company PBF Energy said Thursday the rising price of renewable identification numbers (RINs) took a bite out of first-quarter earnings and it would blend more ethanol into its gasoline output in the second half to offset the cost.
PBF Energy Chairman Tom O‘Malley said during a conference call that the company had budgeted about $15 million for RIN purchases in the quarter but went $10 million over that budget because of a spike in the price of the renewable fuel credits.
Federal law requires refiners and importers to show the credits as proof of compliance with rules requiring the blending of renewable fuels such as ethanol and biodiesel into U.S. gasoline and diesel stocks. If refiners or importers don’t blend enough ethanol, for instance, they must make up the difference by buying the credits.
The company will blend more renewables into its fuel output in the second half of the year to offset the rising cost of RINs purchases, O‘Malley said during the call on the company’s first quarter earnings.