U.S. biofuels regulations require refiners either to blend biofuels into gasoline or – in the case of companies like CVR that have no blending facilities —to buy credits from competitors. The regulation, the Renewable Fuel Standard, also allows companies to delay those credit purchases by a year.

Last year, CVR deferred some $186 million worth of biofuels credits that it was required to purchase under the regulation until 2017, in an apparent bet that prices would fall within 12 months. This year, it continued to build that position to more than $275 million, according to a Reuters review of CVR filings.

That bet looked brilliant in March, when the credits —known as RINs— slumped to a year-low of 33.5 cents. But it could now be a money-loser because over the past four months RINs prices have nearly tripled to 89 cents.

That could be fueling the increased short interest in CVR, said Paul Cheng, an equity analyst with Barclays Capital in New York. “So far, since the beginning of the year, you’ve been on a losing streak. At some point, you have to ask yourself: ‘Do I want to continue betting on this?'” he said. “You are starting to see (investors respond).”

As a special adviser to President Donald Trump, Icahn urged him in February to alter the policy to lift the blending burden from refiners. Sources say environmental regulators are preparing to formally reject that proposal.

Those holding short positions in CVR have watched the stock get hit hard this year. The shares are down 27 percent in 2017, the worst performance of any U.S. independent refiner over the period, according to a Reuters analysis.

The shares’ decline has reduced Icahn’s stake in the company by $468.5 million.

A spokeswoman for CVR declined to comment.

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