14 August 2012 23:55 [Source: ICIS news]
HOUSTON (ICIS)--The Renewable Fuels Association (RFA) said on Tuesday said reduced ethanol exports and production and flexibility in meeting requirements were among the reasons that a waiver of the nation's Renewable Fuel Standard (RFS) is not necessary to address high corn prices brought on by a severe drought in the US.
Recently, several lawmakers urged regulators to ease the nation's mandate to blend corn ethanol into the nation's fuel, saying that the requirement is pressuring food prices.
The 2012 RFS mandate requires US refiners to blend 15.2m gal (57.5m litres) of corn ethanol into the nation's gasoline supply. US corn prices have more than doubled from last year, reaching a $8.28/bushel at one point recently.
However, the Renewable Fuels Association (RFA) provided details in a presentation during the day, explaining what the industry is doing that would make such a waiver unnecessary.
Hosted by RFA vice president Geoff Cooper, the organisation’s presentations came on the heels of the latest crop forecast by the US Department of Agriculture (USDA) that showed the lowest US corn harvest since 2006.
The RFA said it is untrue that the ethanol industry will not take part in any reductions in corn consumption. Likewise, it is untrue that the RFS is driving up food prices and causing higher gas prices.
The association attributed higher gasoline prices to higher crude prices and refinery outages and problems.
Cooper said the ethanol industry is already responding to the higher corn prices and reducing consumption by rapidly decreasing its production rates and decreasing exports.
The RFA and Cooper added that meeting the 2012 RFS will not be an issue because of robust ethanol stocks and excess biofuel credits, known as Renewable Identification Numbers (RINs).
Should refiners be short on physical gallons and RINs, refiners can carry their compliance deficit forward one year.
“In recent months, production has dropped below the mandate,” Cooper said. “But we have a surplus of credits in the market available to refiners for compliance."Additional reporting by Joe Kamalick
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