Ethanol credit prices jump 28 percent

Refiners and blenders can buy the credits, known as Renewable Information Numbers, and turn them into the Environmental Protection Agency to help meet their U.S. biofuel blending requirements.

Prices for 2008 RINs, which expire in 2010, hit 15 to 15.5 cents, while 2009 RINs, which expire in 2011, hit 15.75 to 17.5 cents, according to an executive at the Rinxchange in New York.

The price has risen as some players are buying the credits instead of actually blending the alternative motor fuel into gasoline themselves.

"They are primarily being driven by the supply of ethanol," said Divya Reddy, a commodities analyst at the Eurasia Group in Washington, D.C.

Several ethanol distilleries have shut recently including 12 of 16 owned by VeraSun Energy Corp. The company filed for bankruptcy in October after making expensive bets on corn prices.

Last week Panda Ethanol Inc filed for bankruptcy for a plant it owns in Texas, the latest in a string of ethanol makers that have faced problems.

Reddy said concern about supply is rising but that blenders should not have trouble meeting this year's federal Renewable Fuel Standard of blending 10.5 billion gallons of grain ethanol into gasoline. U.S. refiners and blenders can get the fuel from Brazilian exporters if supply runs thin from U.S. producers.

(Reporting by Timothy Gardner, editing by Jim Marshall)