RINs and Rack Pricing

Executive summary

• A RIN is a compliance credit under the Renewable Fuel Standard. No government money changes hands. Refiners and importers must retire RINs each year, so they price that cost into the gasoline blendstock (BOB) they sell. Whoever blends ethanol into that BOB separates the RIN and keeps it.
• Every gallon of ethanol is assigned one D6 RIN at the plant. Since E10 is 10 percent ethanol, every gallon of E10 you lift carries one tenth of a RIN. At $2.00 per RIN, that's 20.0 cents per gallon. D6 RINs traded between $1.75 and $2.50 from July 7 to August 24, 2026.^[1]
• Argus assesses spot ethanol with the current-year D6 RIN attached.^[2] The RIN value is already inside the ethanol leg of your contract formula. The RIN term left to negotiate is the passthrough credit.
• Passthrough is the share of that credit the blender gives back to you as a discount, and the blender keeps the RIN in every case. At 100 percent you get the whole 0.1 x RIN off the stack. At 0 percent you pay the raw stack and none of the credit reaches you.
• Who you buy from matters because sellers face different levels of competition. The RIN has the same market value to every holder, but a blender competing for your gallons has more reason to share the credit than a supplier whose buyers have no alternative at the terminal. That difference shows up in your quote.

What a RIN is and why it exists

A Renewable Identification Number (RIN) is a code that the producer or importer of a gallon of renewable fuel generates in the Environmental Protection Agency (EPA) tracking system.^[3] The EPA uses RINs to run the Renewable Fuel Standard (RFS), which Congress set up in 2005 and expanded in 2007.^[4] The RFS sets a yearly volume of renewable fuel to blend into transportation fuel, and the RIN is how the EPA proves the blending happened. One RIN equals one ethanol-equivalent gallon of renewable fuel.^[4]

The RIN starts at the biofuel plant: an ethanol producer generates one D6 RIN for each gallon it makes and attaches it to that gallon. Biodiesel and renewable diesel generate D4 RINs at 1.5 and 1.7 RINs per gallon in 2026 (the renewable diesel value drops to 1.5 from 2027).^[5] The RIN travels with the gallon until it is separated, and each seller prices its value into the gallon. Ethanol also trades without a RIN once the RIN has been separated, at about the with-RIN price less the D6.

The RIN separates at the rack: when a blender mixes the ethanol into gasoline blendstock (BOB), the RIN detaches and becomes a tradeable credit in the blender's account.^[4] The blender can then sell the RIN or retire it (i.e., hand it to the EPA to prove compliance). One exception: an obligated party separates the RIN as soon as it takes ownership of the ethanol, whether or not it has blended it yet.^[3]

Refiners and importers of gasoline or diesel are responsible for meeting the blending requirement. These "obligated parties" do not include businesses that simply blend renewable fuel into gasoline or diesel.^[6] Each party's Renewable Volume Obligation (RVO) is calculated by multiplying the volume of gasoline and diesel it produced or imported by the EPA's annual percentage standard, then adding any deficit carried over from the previous year.^[7] For 2026, that standard is 15.50 percent.^[8]

The party meets its RVO by retiring RINs it separated by blending or bought from a party that did. Blenders, wholesalers, jobbers, and retailers are not obligated parties unless they also refine or import, so they can separate and sell RINs and never have to retire one.

The RIN is a cost in one place and a credit in another

So where does the RIN sit in the price of a gallon of E10? It shows up twice, on opposite sides of the ledger, and neither appearance is labeled.

First, the cost: refiners recover their RIN compliance costs through the wholesale prices they charge for gasoline and diesel. Knittel, Meiselman, and Stock estimated that those costs are passed through almost entirely over time (pooled long-run coefficient: 1.01; standard error: 0.12).^[9] The adjustment is quick: half to three-quarters of the effect of a RIN price change reaches wholesale fuel prices that same day, with more following over the next few business days.^[9] The EPA reached the same conclusion in its August 2026 small refinery exemption decisions: obligated parties recover the cost of buying RINs by charging higher prices for the gasoline and diesel they produce.^[10]

So the BOB you buy already carries the RIN obligation. Although no line on a posted BOB price says "RVO cost," the BOB is higher than it would be without the RFS. If your BOB leg is written to a spot index, check whether that series is quoted with the RVO in it or ex-RVO. The obligation cost sits inside one and outside the other, and an adder set against one basis doesn't fit the other. Ask which one before you sign, not after the first invoice.

The second appearance is a credit: when the ethanol goes into the BOB at the rack, the blender separates a RIN it can sell or retire.

The key idea: the same gallon of E10 has two prices

How to think about it

Competition shapes how much of the RIN credit reaches you

The market price is the RIN's value whether a refiner uses it to meet its obligation or sells a surplus. Retiring a RIN avoids buying one; selling it realizes that value in cash. Selling and replacing it at the same price adds no value.^[9] What differs is how hard each seller must compete for your gallons.

An independent blender (a wholesaler or jobber that blends at the terminal) has no obligation to retire the RIN. It sells the credit and keeps the proceeds after carrying and settlement costs. Sharing those proceeds helps it win your business, and competition at the rack pushes passthrough toward full. A refiner or branded supplier whose buyers have few alternatives can keep more.

A 2017 academic study of rack-level passthrough supports this pattern. Pouliot, Smith, and Stock used daily rack prices in 20 large cities.^[11] They estimated that about 92 percent of the RIN value reached buyers of unbranded E10, compared with about 63 percent for branded E10. Passthrough was complete at terminals that offered more than one blend.^[11] The estimates are dated, but buyers with more choices received more of the RIN value.

Passthrough is a discount, not a transfer

The supplier prices a gallon of E10 at the rack using a stack: 90 percent BOB, 10 percent ethanol, plus blending cost and margin. Argus assesses spot ethanol with the current-year D6 RIN attached,^[2] so the ethanol leg already carries the RIN value. There's no separate RIN line in the stack. The RIN enters the price once more, as a credit:

Passthrough is the share of the separated RIN that the blender credits back to you. At 100 percent the full 0.1 x RIN comes off the stack, and at 0 percent you pay the raw stack, with none of the credit shared. Regardless of the percentage, the blender separates and keeps the RIN. "Passing it through" is a price concession against the posting, not a transfer of the credit.

If we take the illustrative round numbers in the figure (BOB at $2.00, ethanol with RIN at $2.00, blending cost and margin at 5 cents, and a D6 RIN at $2.00), we get a raw stack of $1.80 plus $0.20 plus $0.05, or $2.050 per gallon. The full RIN credit is 0.1 x $2.00, or 20.0 cents. Although the BOB price is $2.00 in every case, you pay $1.850 at 100 percent passthrough, $1.950 at 50 percent, and $2.050 at 0 percent. All that moved is the share of the credit that reached you.

The table under the figure shows the effective ethanol price. At 100 percent passthrough you pay $2.00 for ethanol and get $2.00 back, so the ethanol molecule is free. That's what a RIN at parity with ethanol means, and on May 7 the D6 RIN went past parity. When the RIN is worth as much as the ethanol, the passthrough line is worth the entire ethanol leg of your contract.

Every E10 quote sits between a floor and a ceiling

The floor is the replacement cost: the raw stack minus the full RIN credit. The ceiling is the raw stack, with no credit at all. The distance between them is 0.1 x RIN.

The band shows prices from zero to full passthrough. A quote below it gives up additional supplier margin; a quote above it exceeds the stack with no RIN credit. The RIN price sets the band's width. BOB can also move as its embedded obligation cost changes, though the figure holds it fixed. For sellers quoting from the same BOB benchmark, passthrough determines where their quotes sit within the band.

At the 2025 average of $0.91 per D6 RIN the band was about 9 cents wide, whereas at the June 4, 2026 print of $2.37 it was about 24 cents wide.^[12][13] That's why two suppliers at the same terminal, posting off the same BOB, can be 10 or 20 cents apart on E10 and both be telling the truth. If you lift finished E10 at the posted rack and do not blend, this is the line you never see. The RIN reaches you inside the posting, and the distance between two postings at your terminal city is your first read on how much of it each seller kept. Check that spread before you decide whose posting to lift against.

What to do with this

First, find the RIN in your contract. On a spot-linked formula, look for a separate RIN coefficient, written as a percentage of the D6 RIN on the ethanol share or as a flat cents-per-gallon credit. If there is none, your passthrough is whatever the supplier decided when it set the adder. If you buy off a posted rack price, the passthrough is buried in the posting, and you find it by comparing postings against a built-up stack.

Second, work out how much competition the seller faces for your gallons. Does an unbranded blender post at the same terminal? Does a branded contract tie you to one supplier? Could you self-blend? Those questions, not the seller's RIN position, decide how much of the credit you see.

Third, watch the RIN price the way you watch the BOB. The D6 RIN rose from a 2025 average of $0.91 to $2.37 on June 4 and $2.50 on July 7, then fell about 30 percent to $1.75 by August 24.^[12][1][13] At 0.1 x RIN, a full passthrough clause worth 9 cents a gallon at the 2025 average was worth 25 cents on July 7 and 17.5 cents on August 24. If that clause is a flat cents-per-gallon credit, it was sized to wherever the D6 RIN sat when you signed, and it hasn't moved with the band since. If it is a percentage of the D6 RIN, it has. Before you renew, choose one of the two on purpose.

Fourth, put the ethanol leg and the RIN credit side by side with what you would pay at the next terminal over. If you can self-blend, or if a non-obligated blender posts at the same rack, you have an outside option and the credit should be close to full. That's what the 2017 study found where buyers had a choice of blends.^[11]

How this relates to Mills

The Mills spot-to-rack stack splits an adder into tariff, line loss, terminaling, blending, RIN passthrough, and supplier margin. The ethanol leg in that stack is the with-RIN spot assessment. Gauge reads a supply contract line by line and shows the RIN coefficient as a negotiable line of its own, separate from the adder. Before the next renewal, upload the contract PDF to Gauge and look for that line.

Knowing the RIN's value helps you assess how much of it your supplier is passing through.

Frequently asked questions

What is a RIN, who created it, and why?

A Renewable Identification Number is a code the producer or importer generates in the EPA's tracking system for each gallon of renewable fuel made or imported in the United States. The EPA created it to administer the Renewable Fuel Standard, which Congress established in 2005 and expanded in 2007. The RIN is how the EPA verifies that the mandated volume of renewable fuel was blended.^[3][4]

Is a RIN a tax credit? If not, who pays for it and who benefits?

No. A RIN is a compliance credit under the Clean Air Act, and supply and demand among the parties that need RINs set its value. Although the biodiesel and renewable diesel mixture credit expired for fuel sold or used after December 31, 2024, the fuel producer claims its replacement, the Section 45Z production credit.^[14] Obligated parties foot the bill: they buy RINs or separate them by blending, and they recover the cost in the price of the gasoline and diesel they sell.^[9][10] Blenders separate RINs when they blend and sell or retire them, and the E10 buyer gets that benefit back only to the extent the blender passes it through.

What is a Renewable Volume Obligation (RVO)?

An RVO is the number of RINs an obligated party must retire in a compliance year. It equals the party's gasoline and diesel volume multiplied by the percentage standard the EPA publishes for that year, plus any deficit carried from the year before. The total standard for 2026 is 15.50 percent.^[7][8]

What is an example of a RIN obligated party versus a non-obligated party?

A refiner that makes gasoline blendstock is an obligated party and must retire RINs against every gallon it makes. A jobber that buys that blendstock and blends ethanol into it at the terminal is not an obligated party. It separates RINs when it blends and can sell them, with no obligation to retire them.^[6]

When I buy or sell ethanol, spot or futures, is the RIN already in the price?

Yes. Argus assesses ethanol "with current-year D6 RINs attached," and the Chicago ethanol futures contract settles against a with-RIN spot assessment.^[2][15] When you see ethanol at $2.00, read it as "one gallon of ethanol plus one D6 RIN." The RIN isn't a separate purchase.

What does it mean for a blender when the RIN is worth more than the ethanol?

It means the RIN sale pays the blender to blend. If ethanol with the RIN costs $2.00 and the RIN sells for $2.00, the ethanol molecule is free after the RIN sale. If the RIN sells for more than the with-RIN ethanol price, as it did on May 7, 2026, the blender is paid to take the ethanol. The gap creates an incentive to capture the difference. But the RIN separates only when the ethanol is blended or an obligated party buys it, and blending capacity limits how quickly the market can close the gap. At that price each blended gallon is worth more as a credit than as fuel, which makes the credit the largest negotiable item in the ethanol leg and the line to push on.

What is a RIN passthrough, and what are common passthrough percentages at the rack?

Passthrough is the share of the separated RIN value that the blender credits back to the rack buyer as a discount. Contracts state it as a percentage of the RIN on the ethanol share, as a flat credit, or not at all. The published figures come from a 2017 academic study of rack prices in 20 cities: about 92 percent for unbranded E10, about 63 percent for branded, and complete where a terminal offered more than one blend.^[11]

How does an obligated refiner treat RINs differently from a non-obligated wholesaler, and what does that do to price?

Both value the RIN at the market price. The refiner retires the RIN against its own obligation instead of buying one, and the wholesaler sells it. The difference is the incentive to compete: the wholesaler uses the credit to win volume, and a refiner selling branded product to captive buyers has less reason to. All else equal, the non-obligated blender's E10 quote sits closer to the floor and the captive supplier's quote sits closer to the ceiling.