Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list

RINs prices react strongly to US political news, despite uncertain impacts

Agriculture | Natural Gas | Oil | Metals | Petrochemicals

US-China Trade Tension

Agriculture | Biofuels

Platts Biofuels Alert

Agriculture | Electric Power | Natural Gas (North American) | Oil | Metals | Petrochemicals

North American Digital Commodities Summit, 2nd Annual

Agriculture | Biofuels

Center-South Brazil sugarcane crush in H1 March nearly triples H2 February levels: UNICA

Watch: RINs prices react strongly to US political news, despite uncertain impacts

The market for Renewable Identification Numbers, used to comply with US renewable fuel blending rules, has been roiled in the last three months as the Renewable Fuel Standard and Environmental Protection Agency are in the spotlight. Wes Swift covers biofuel and RINs markets and details the price shifts in light of political news and blending mandates.

View Full Transcript

Video Transcript

Welcome to the Snapshot, a series examining the forces shaping and driving global commodities markets today.

The political tidal wave sweeping Washington DC has created rough seas for the market for Renewable Identification Numbers, which are used to comply with federal renewable fuel blending rules. The already volatile market has been roiled in the last three months, sending prices for the credits soaring and spiking.

In November, news from the US Environmental Protection Agency sent prices up 23% in a matter of days, after it was announced that the 2017 Renewable Volume Obligations would be nearly 500 million gallons higher than originally proposed in June. D6 ethanol RINs peaked at $1.0750/RIN on December 2, and D4 biodiesel RIN reached $1.2175/RIN.

But the surge was short-lived. A week later, reports that President Donald Trump would nominate Scott Pruitt, a vocal critic of the Renewable Fuel Standard, to head the EPA sent RIN prices reeling. News that another critic of the RFS, Carl Icahn, would serve as an adviser on deregulation sent RIN prices dropping further less than two weeks later.

And in recent weeks, Pruitt’s confirmation hearing and an announced delay in the implementation of the 2017 RVO have further rattled the markets, pushing RIN prices 60% lower by February 1.

The market’s reaction to these developments has shown that any type of news from Washington is likely to make what appears to be a jittery market react strongly, regardless of what the final impact will be. For instance, the majority of supporters and critics of the RFS said the EPA’s recently announced delay would have little impact on this year mandate. But the market still found enough to worry about to send RIN prices downward.

This comes at a time when renewable fuel industry supporters were expecting to reach record levels of production. And some analysts predicted in mid-2016 that limited ethanol production capacity would push RIN prices to higher and higher levels in 2017. The market now seems to have real doubt about the future of the RFS under the Trump administration.

But there’s still much to be determined. The Midwest US is Trump country, a key part of the country that supported his campaign and Republicans in Congress. It’s also the heart of the US biofuels industry, which provides jobs to the area. And the RFS is popular with federal lawmakers on both sides of the aisle. The bottom line is that this story is far from over.

Until next time on the Snapshot, we’ll keep an eye on the markets.