Abstract The renewable fuel standard (RFS), which requires oil refineries to blend ethanol into domestic fuel supplies, is a market-based policy that implements tradable compliance credits so as better to equalize compliance costs across firms. We exploit unanticipated regulatory announcements that caused major swings in the prices of these compliance credits to retrieve reduced-form estimates of how the RFS affects the stock prices of publicly-traded refining firms. Our analysis reveals no significant stock price response among smaller firms in our sample and a small but statistically significant price response among large refiners. These findings are relevant to policy in that they cast doubt on concerns that the RFS allows integrated refiners to abuse merchant refiners. Our findings also shed light on the necessity of small refinery exemptions, which are intended to shield small, financially vulnerable refiners from RFS compliance costs.