Refineries do not pay RIN costs; instead, they are generally included in the spot market price the refinery receives for fuels. As such, consumers ultimately pay for the RFS program. Over the 2019-2020 time period, however, consumers saved an average of 2.85 cents per gallon due to the RFS. Therefore, the RFS caused no economic harm to consumers or to refineries.
In 2015, on behalf of EPA, Dallas Burkholder completed a thorough analysis of the RFS RIN system. Burkholder’s analysis “suggest(s) that obligated parties are generally recovering their RIN costs in the price of the petroleum fuels they produce.” Following this report, James Stock et al. found there was almost complete passthrough of RIN prices from the refinery to the retail marketplace with the exception of E85. More recently, in 2019, Burkhardt found “RIN costs are fully passed-through to gasoline and diesel rack prices.” As such, there is no basis for EPA to grant severe-harm RFS waivers due to RIN prices.
In summary, for the period in question, the RFS caused no economic harm to either refineries or consumers.
No action taken in 2021 can change what already occurred in 2019 or 2020. First, the COVID-19 pandemic, whose effects on gasoline production hit the U.S. beginning in April 2020, as seen in Figure 3 below, occurred after 2019 compliance was completed in March 2020. The decline seen in Figure 3 in gasoline supplied from December 2019 through February 2020 is normal seasonal variability. It was not until mid-March 2020 that non-seasonal demand destruction began to occur. As such, the pandemic could not have impacted 2019 operations or profitability.