Jarrett Renshaw at Reuters has a nice piece this week on challenges in meeting the Trump administration’s aggressive RVOs for biomass-based diesel in 2026 and 2027. The story also discusses a claim that comes up every time RIN prices spike: that record RIN prices drive up what people pay at the pump for gasoline and diesel, possibly by a lot. It is hard to think of another issue with as much misunderstanding and misinformation as the passthrough of RIN prices to the pump.
I will do my best to explain the basics, but see the last section of our recent AEPP article “The Biofuel Blueprint: Understanding the U.S. Renewable Fuel Standard” for a full explanation, including some crucial algebra. The key is that there are two pieces here, pulling in opposite directions. First, refiners and importers are obligated to blend biofuel or buy RINs to cover their RFS obligations. That RIN bundle cost (RIN tax) gets applied to every gallon of gasoline and diesel they sell. The evidence here is about as clear as economics gets. Refiners quickly and fully pass the RIN cost into wholesale gasoline and diesel prices. Second, when a blender detaches a RIN from a gallon of biofuel, they can sell the RIN to refiners. The design of the program assumes they pass that value (RIN subsidy) along by discounting the biofuel content of the blend sold at the pump. This lowers the price of the fuel in proportion to how much biofuel is actually in it. The evidence here is not quite as clear, but we can confidently say that most of the subsidy is passed on consistent with the RFS program design.
So how does this net out in practice? That’s where the proportion of biofuel in the blend is crucial. The RIN tax hits every gallon of gasoline and diesel sold at the pump. The RIN subsidy only applies to the biofuel share. When biofuel content is small, the subsidy barely registers, and the tax tends to dominate. When biofuel content grows — like biomass-based diesel has, from about 2% of the diesel pool a decade ago to over 11% today — the subsidy carries more weight in the calculation.
The chart below shows how the two pieces have behaved through early June this year. Both the tax and the subsidy grew by roughly a factor of ten as D4 RIN prices climbed, swinging as high as 20-25 cents per gallon in either direction. The net — tax minus subsidy — bounced between about -9 and +6 cents per gallon, averaging only about +1 cent over the full period. Since the beginning of 2026, the net RIN passthrough for diesel has increased by 9 cents. So there is an impact of record-high RIN prices on diesel pump prices, but this pales in comparison to the magnitude of the increase in D4 RIN prices, which have increased by roughly $1.50 over the same time period.
It is also important to say that the net RIN passthrough does not necessarily equate to the entire cost of biomass-based diesel to drivers at the pump. Most importantly, this calculation does not account for the added cost of biomass-based diesel relative to the petroleum diesel it replaces. In essence, the RIN passthrough computation takes the current 11 percent blend rate as a given and does not account for this underlying cost, which certainly is substantial.
I hope this helps lessen the noise on this issue at least a little bit.
Laurence J. Norton Chair of Agricultural Marketing
University of Illinois at Urbana-Champaign