In 2005, Congress passed Renewable Fuel Standard (RFS), the intent of which was to increase America’s use of renewable fuels. The RFS established a mandate for the use of renewable fuels such as ethanol and biodiesel.  In order to monitor compliance with the program, the EPA created a system of volume accounting and tracking.  This system assigns a unique tracking number called a Renewable Identification Number or RIN to each batch of renewable fuel.  U.S. EPA requires that RINs be transferred with volumes of renewable fuel as they move through the distribution system, until ownership of those volumes is assumed by an obligated party, exporter, or a party that converts the renewable fuel into motor vehicle fuel. At such time, RINs can be separated from the volumes and freely traded. These RINs are then turned into the EPA each year by petroleum refiners to prove that they have blended the required amount of renewable fuel into their gasoline.

One gallon of corn based ethanol is equivalent to one RIN credit.  Regulations have established higher RIN equivalent values for advanced biofuels with certain cellulosic fuels generating 2.5 RINs per gallon of fuel.

RINs can be traded between parties and have substantial economic value due to their use in demonstrating statutory compliance with the Renewable Fuel Standard.  Increased demand by obligated parties to meet government mandates have led to increasing market prices for RINs.