RIN markets roiled as EPA remains tight-lipped on proposed 2018 RVOs

Source: By Platts • Posted: Wednesday, July 5, 2017

Renewable Identification Number markets have taken a roller coaster ride during the past several days as the market awaits proposed 2018 renewable volume obligations from the US Environmental Protection agency.

Prices for 2017 rose Thursday after dipping on rumors that the EPA may have been changing either the RVOs or the Renewable Fuel Standard. S&P Global Platts assessed 2017 ethanol RINs, technically called D6 RINs, 1.75 cents higher at 71.75 cents/RIN Thursday.

That was after sliding to a one-month low of 68.25 cents/RIN on Tuesday.

Sources had told Platts that the EPA was expected to release the proposals as early as the last week in May. EPA executive director Scott Pruitt had previously told Congress that he understood that the uncertainty caused by delaying the proposal could impact the market.

In June, 2017 D6 RINs have been assessed as high as 77 cents/RIN and as low as 68.25 cents/RIN.

The EPA has not commented on what is causing the delay. Published reports have attributed the delay to questions about the mandate for cellulosic biofuel. Others have speculated that a possible change in the point of obligation could be behind the delay.

“We don’t put stock in rumors that delay in RVOs has to do with changing the point of obligation or RVP,” said Geoff Cooper, vice president of industry trade group Renewable Fuels Association, Thursday.

“I think [the delayed release] is related to making sure the cellulosic and advanced numbers are right. We haven’t seen anything to lead us to believe the conventional volume will be anything other than 15 billion gallons,” Coopers said.

Shifting responsibility for complying with the RFS away from refiners and importers to blenders has been a contentious topic over the year, the debate casting RIN prices into turmoil at times.

Allowing a waiver for E15, gasoline blending with 15% ethanol, to be sold despite more strict RVP requirements during the summer month has been a similar catalyst for prices.

The proposed mandates could also have an impact on biodiesel markets as well. With a dearth of advanced biofuel produced or imported into the US so far in 2017, biodiesel RINs are the most likely to be used to cover any shortfall in the overall renewable fuel volume for 2018. If that trend continues into 2018, the market could see biodiesel RINs be key for obligated parties looking to meet their blending requirements.