The chairwoman of the Senate Agriculture Committee called Tuesday upon regulators to launch an investigation into possible manipulation of the market for ethanol credits.
Sen. Debbie Stabenow (D-Mich.) is asking the Commodities Future Trading Commission (CFTC) to look into reports of suspicious activity involving Renewable Identification Numbers (RINs), which are assigned to ethanol-blended fuels that meet the Renewable Fuels Standard and traded in the financial sector.
The unregulated RINs market has experienced volatility and dramatic price spikes in recent months.
“I would like the CFTC to help determine whether factors other than supply and demand have been causing extraordinary volatility in the price of RINs and to what extent fraud and manipulation have been affecting the price of RINs,” Stabenow wrote in a letter to CFTC Chairman Gary Gensler.
She questioned whether increased regulation is needed in the renewable energy market.
“I am concerned that a lack of transparency in these markets has made them more susceptible to manipulation,” she wrote. “If this is the case, it is a problem that must be identified and fixed.”
Earlier this month, Scott Mixon, the CFTC’s acting chief economist, told The New York Times that the issue was agency’s radar, and regulators were considering expanding scrutiny of the market for ethanol credits.