What are RIN Credits?

A RIN – short for Renewable Identification Number – is a credit that is generated each time a gallon of renewable fuel (ethanol, biodiesel, etc) is produced. The two are not inextricably linked, however, as the RIN can be split from the gallon when it is bought on the open market. The credit alone can then be sold to businesses interested in purchasing of RIN credits.

RIN credits comprise a fungible, tradable regulatory currency that represents a qualifying renewable fuel. RINs have played an important role in the development of today’s biofuels market.

What is the Purpose of RINs?

RINs are used to track the production, use, and trading of biodiesel and other renewable fuels, as required by the EPA’s Renewable Fuel Standard, implemented in the wake of the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007.

The ability to track bio-based fuels is critical as it enables regulatory bodies to enforce annual quotas dictating what percentage of the total amount of motor fuels consumed in the United States must be represented by biofuel blended into fossil fuels. RINs periodically submitted to the EPA by ‘obligated parties’ (petroleum-derived fuel producers) provide an accurate representation of the amount of biofuel-blended petroleum fuel used in the United States.

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