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Industry Compliance Costs Under The Renewable Fuel Standard: Evidence From Compliance Credits, Arthur R. Wardle
Industry Compliance Costs Under The Renewable Fuel Standard: Evidence From Compliance Credits, Arthur R. Wardle
All Graduate Theses and Dissertations, Spring 1920 to Summer 2023
The Renewable Fuel Standard requires US oil refineries to blend biofuels into domestic transportation fuels. To ensure that compliance costs under this mandate don’t disproportionately affect any subset of refiners, the regulation includes a compliance credit program, whereby refiners blending excess biofuels can sell their excess compliance to refiners that do not blend enough. The price of these credits can be interpreted as the marginal cost of compliance with the mandate. I measure how changes in the prices of these compliance credits affect the stock prices of oil refining firms. There are a number of ways one might expect these …