GPRE Is Doing a GREAT JOB of Collecting RINs,Just LIKE EVERY Other Ethanol Producer INCLUDING PEIX
The RIN market
Ethanol producers assign RINs to blocks of ethanol -- usually between 1 million and 5 million gallons -- which are then sold to blenders alongside the physical product. For example, if ethanol sells for $2.00 per gallon and RINs are valued at $0.50 per gallon, the blender must pay a total of $2.50 per gallon of ethanol. The market system was designed in 2005 with the Renewable Fuel Standard, or RFS, to accomplish two things: (1) to provide an added incentive for renewable fuel production, and (2) to keep track of the volumes of biofuels that refiners blended into the nation's gasoline.
Source:Motley Fool Article
Will Soaring Ethanol Credits Cost You at the Pump?
by Maxx Chatsko
March 16, 2013
MK. You're hilarious. I was going to respond nonetheless to say that I really appreciated your informative and "non-pumping" tone of this post. Very good and clear information about RINs and how they work.
So thank you.
Let's see if PEIX actually capitalized on them. Based on past performance of their management I'd say "no". However I'd LOVE to be WRONG. (and you know why)
Also considering I hold 3,500 shares of GPRE with a cost average in the low $5s, I WILL take it to the bank . . .
(if not to simply offset a good chunk of my PEIX losses) But for now I'll continue to watch GPRE and continue to let them do what they do best, and that's effectively manage a diversified and profitable business in the ethanol space.
That is not correct. RIN's are free and attached to every gallon of ethanol sold. A blender buys a gallon of ethanol and gets a free RIN to show compliance. If they don't blend ethanol, they don't get a free free RIN and must either buy the RIN from another blender, or use a RIN they banked from a previous time.
RIN's have nothing to do with the rising price of gasoline. Ethanol lowers the price of gasoline. Big Oil is crying because they have refused to fully comply with the RFS, and expensive RINS are coming back to bite them. They are losing market share to ethanol and their lack of compliance with the laws of the land are directly to blame for the high price of RINS.