US RIN generation up in April as D4 climbs

Market: Biofuels
16/05/24

Generation of renewable identification number (RIN) credits in April rose by 12pc, as biomass-based D4 diesel credits posted their second highest monthly volumes ever.

Total RIN generation rose to 2.06bn credits in April, up from 1.84bn a year earlier, the US Environmental Protection Agency reported on Thursday.

D4 credits continued to lead gains in April, with generation increasing on the year by 29pc to 780mn credits. The only month with greater D4 RIN generation was December 2023. D4 accounted for 38pc of all RINs in April, up from 33pc in April 2023.

Ethanol D6 RIN generation rose from a year earlier by 2.4pc to 1.2bn credits, accounting for 58pc of all RINs generated in the month. D6 credits were also up by 4pc from March, a month that was affected by seasonal ethanol plant maintenance.

Cellulosic biofuel D3 credit generation rose by 7.6pc from a year earlier to 69mn credits.

RINs are credits traded and produced by refiners and importers to show compliance with the EPA's Renewable Fuel Standard program. Obligated parties can produce credits when renewable fuels are blended into conventional transportation fuels or can purchase credits from other RIN producers.

By Matthew Cope

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

08/11/24

Carbon intensity reg pivotal to biobunkers in 2025

New York, 8 November (Argus) — The International Maritime Organization's (IMO) carbon intensity indicator (CII) regulation will propel biofuel bunker demand in 2025 as its restrictions tighten. The CII regulation came into force in January 2023 and thus far has had a muted effect on shipowners' biofuel bunker demand. But 2025 could be a pivotal year. CII requires vessels over 5,000 gross tonnes (gt) to report their carbon intensity, which is then scored from A to E. A and B vessel scores are regarded as superior energy efficiency, while C, D and E are considered moderate to inferior scores. The scoring levels are lowered yearly by about 2pc, so a vessel with no change in CII could drop from from C to D in one year. If a vessel receives a D score three years in a row or E score the previous year, the vessel owner must submit a corrective action plan. The IMO has not established penalties or restrictions for vessels scoring D. Thus, theoretically a ship owner could have scored D in 2023 and 2024 with no consequences. Year 2025 will mark CII's third year, when ship owners whose vessels were scoring D in 2023 and 2024 will need to rethink their sustainability approach or risk getting D again and having to produce corrective actions plans in 2026. That is in addition to the ship owners whose vessels will score E in 2024. To improve its CII score, a ship owner could reduce its speed and burn low-carbon fuels, among other solutions. Biofuel is the only plug-and-play low-carbon fuel option that does not require a costly vessel retrofitting. in 2023 of the vessels 5,000 gt and over, 3,931 scored D, 1,541 scored E and 3,967 did not report scores, according to the latest IMO data ( see chart ). Assuming that the non-responders refrained from reporting to avoid sharing their low D and E scores, then the total number of D and E scoring vessels could be as high as 9,439, or 33pc of the total vessel count. The bulk of the vessels reporting D and E were dry bulk carriers at 1,853 and 641, respectively, followed by oil tankers at 743 and 349, respectively, according to IMO data. The dry bulk carrier category also had the highest number of non-responders at 1,015 vessels. The vessel classification society American Bureau of Shipping concluded that a reference case container vessel with 154,000t deadweight could see its rating improve from D to C in 2025 if it switched from burning conventional marine fuel to B25 biofuel. FuelEU, EU ETS: All bark, no bite Separately from the CII regulation, ship owners traveling in, out and within EU territorial waters will see the implementation of a new FuelEU marine regulation on 1 January and the tightening of the existing EU ETS regulation. But neither would be major driving forces behind biofuel for bunkering demand in 2025. The EU ETS will require that vessel operators pay for 70pc of their CO2 emissions next year. But even with the added cost of CO2, a B30 biofuel blend is more expensive than conventional marine fuel. In Rotterdam in October, B30 — comprised of 30pc used cooking oil methyl ester (Ucome) and 70pc very low-sulphur fuel oil (VLSFO) — with a 70pc CO2 cost added would have averaged $924/t, compared with VLSFO with added 70pc CO2 cost at $682/t, according to Argus data. In order for the EU ETS to entice ship owners to burn biofuels, at current VLSFO and Ucome prices, the price of CO2 has to rise up to $300/t. And CO2 has fluctuated from $55-$102.5/t from January 2023 to October 2024. Starting on 1 January 2025, the EU's FuelEU regulation will require that vessel fleets' lifecycle greenhouse gas intensity is capped at 89.34 grams of CO2-equivalent per megajoule (gCO2e/MJ) through 2029. For vessels which do not meet this cap, a low biofuel blend can meet the requirement. A B5 blend, comprised of 5pc Ucome and 95pc VLSFO, emits less than 89 gCO2/MJ. At this rate, albeit higher, demand for biofuels would not spike dramatically. Unlike the CII scores which apply to individual vessels, FuelEU applies to vessel pools. Different shipping companies are allowed to pool their vessels together to share compliance and meet the EU ETS emissions limits. Thus several biofuel or LNG burning vessels can compensate for the emissions generated by the majority of the older, less fuel efficient vessels burning conventional marine fuel in the pool. By Stefka Wechsler CII vessels rating Number of vessels (5,000 GT and over) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more

News

Canada climate plans not equally at risk post-Trudeau

08/11/24

News

08/11/24

Canada climate plans not equally at risk post-Trudeau

Toronto, 8 November (Argus) — Canada's climate policies will be overhauled if prime minister Justin Trudeau loses an upcoming federal election, but the Conservative Party might not move to roll back all of the programs. Trudeau over nine years in office has pushed through a raft of carbon pricing policies, cracked down on provinces with insufficiently ambitious plans, and even started a global "challenge" to spur more jurisdictions to price emissions. But Canada's policies have exacerbated cost-of-living concerns at a time when voters across the world are punishing incumbents for inflation, and Conservative leader Pierre Poilievre has barnstormed the country with a pledge to "axe the tax." An election must happen no later than October 2025, and the ruling Liberals are down significantly in polls. "We are going to see change, significant change," said Lisa DeMarco, a senior partner at the law firm Resilient and a member of the International Emissions Trading Association board at the Canada Clean Fuels and Carbon Markets Summit in Toronto, Ontario, this week. What "axe the tax" might mean in practice is uncertain. Inevitable targets are the country's federal fuel charge, currently at C$80/t ($57.54/t) and set to gradually increase to C$170/t in 2030, and a recently proposed greenhouse gas emissions cap-and-trade program for upstream oil and gas producers. But other policies, especially those with industry support, could remain. The country's distinct system for taxing industrial emissions, which includes a federal output-based pricing system that functions as a performance standard, "will likely be untouched," said former Conservative leader Erin O'Toole. A point of debate at the conference was what Poilievre might do with the country's clean fuel regulations, which function similarly to California's long-running low-carbon fuel standard and have boosted biofuel usage in the country. The policy is "certainly not at the top of the list" of Conservative priorities, said Andy Brosnan, president of low-carbon fuels at environmental products marketer Anew Climate. But that does not mean it will escape scrutiny. Conservatives could tinker with the program or push through more muscular changes like excluding electric vehicles, said David Beaudoin, chief executive of the climate consultancy NEL-i. "We should expect that regulation will be maybe not dismantled but somehow changed, perhaps fundamentally," Beaudoin said. In the gap left by the federal government, provinces could make up the difference with their own climate programs, panelists agreed. Quebec for instance has a linked carbon market with California, and British Columbia has its own low-carbon fuel standard. But policymakers should heed the lessons of Trudeau's declining popularity and reorient how they approach climate policy, O'Toole argued. "Try to be minimally disruptive on economically vulnerable citizens," he said. "Try not to pit industry against industry or region of the country against region." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Talks to restart as port of Vancouver lockout drags

08/11/24

News

08/11/24

Talks to restart as port of Vancouver lockout drags

Calgary, 8 November (Argus) — A labour disruption at the port of Vancouver is now into its fifth day, but the employers association and the locked-out union are to meet this weekend to try to strike a deal and get commodities moving again. Workers belonging to the International Longshore and Warehouse Union (ILWU) Local 514 on Canada's west coast have been locked out by the BC Maritime Employers Association (BCMEA) since 4 November. This came hours after the union implemented an overtime ban for its 730 ship and dock foreman members. The two sides will meet on 9 November evening with the assistance of the Federal Mediation and Conciliation Service (FMCS) in an effort to end a 19-month long dispute as they negotiate a new collective agreement to replace the one that expired in March 2023. The FMCS was already recruited for meetings in October, but that did not culminate in a deal. Natural resource-rich Canada is dependent on smooth operations at the port of Vancouver to reach international markets. The port is a major conduit for many dry and liquid bulk cargoes, including lumber, wood pellets and pulp, grains and agriculture products, caustic soda and sodium chlorate, sugar, coal, potash, sulphur, copper concentrates, zinc and lead concentrate, diesel and renewable diesel liquids and petroleum products. These account for about two-thirds of the movements through the port. Grain operations and the Westshore coal terminal are unaffected while most petroleum products also continue to move, the Port of Vancouver said on 7 November. As the parties head back to the bargaining table, the ILWU Local 514 meanwhile filed a complaint against the BCMEA on 7 November, alleging bargaining in bad faith, making threats, intimidation and coercion. "The BCMEA is trying to undermine the union by attempting to turn members against its democratically-elected leadership and bargaining committee, said ILWU Local 514 president Frank Morena on 7 November. "They know their bully tactics won't work with our members but their true goal is to bully the federal government into intervention." But that is just "another meritless claim," according to the BCMEA, who wants to restore supply chain operations as quickly as possible. The union said BC ports would still be operating if the BCMEA did not overreact with a lockout. "They are responsible for goods not being shipped to and from BC ports — not the union," Morena says. The ILWU Local 514 was found to have bargained in bad faith itself already, according to a decision by the Canada Industrial Relations Board (CIRB) in October. Billions of dollars of trade are at risk with many goods and commodities at a standstill at Vancouver, which is Canada's busiest port. A 13-day strike by ILWU longshore workers in July 2023 disrupted C$10bn ($7.3bn) worth of goods and commodities, especially those reliant on container ships, before an agreement was met. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US renewable diesel imports fall, spot liquidity stalls

07/11/24

News

07/11/24

US renewable diesel imports fall, spot liquidity stalls

Seattle, 7 November (Argus) — The US renewable diesel import lineup for November is unusually thin as last month's equipment failure in Singapore limits loadings, while broader supply and policy uncertainty constrain both near-term liquidity and incentives to plan beyond the fourth quarter. Just two vessels carrying renewable diesel are currently expected to reach US west coast ports this month, according to tracking data from global trade and analytics platform Kpler. Clearocean Maria reached Los Angeles with about 109,000 bl from Singapore on 2 November, per Kpler, while Leikanger is due to follow on 10 November to Long Beach, California, with an additional 345,000 bl of Singaporean renewable diesel. The November lineup as of Thursday also reflected an atypical lack of both Newfoundland-origin cargoes and Jones Act vessels for domestic volume delivery to the west coast from the US Gulf. Altogether, present waterborne supply totals for this month would represent a 69pc drop from average west coast deliveries — both foreign and domestic — from January-September, to about 455,000 bl. Final October receipts are yet to be confirmed, but data aggregated from Kpler and early-month bills of lading suggest about 1.49mn bl across all west coast-bound vessels. Total volumes are subject to change as more cargoes are scheduled, or if previously listed vessels are rerouted or identified as carrying a different product. But the thinned lineup is likely the first material consequence of an equipment failure that shut down production of US-spec renewable diesel at Neste's Singapore biorefinery last month. Neste's pause in Singapore is likely to continue to stymie the flow of offshore fuel to the US west coast through the end of the year, contrary to long-held market expectation that the scheduled end of the blender's tax credit (BTC) next month would spur a flurry of imports this quarter. There remains no public timeline for a return to normal operations in Singapore, while the BTC is slated to give way to the Inflation Reduction Act's 45Z Clean Fuel Production Credit for 2025-onward, with the latter's effect on future import economics yet unknown. In the meantime, tighter supply has spurred widespread supplier withdrawal from California's spot head of the pipeline (hop) R99 markets, and resultant stagnation in spot differentials has muddled even negotiations for remaining 2024 contracted volume. An absence of hop offers in Los Angeles and San Francisco prevailed across much of October, and scattered bids in the first week of November went entirely unanswered as Donald Trump's re-election introduced new uncertainty for federal incentive programs and, thus, US production and blender economics. In essence, several unknowns cloud the market's present ability to develop forward supply strategy: the fate of the BTC and terms of various proposed extensions, the role the White House's changing of the guard will play in shaping remaining 45Z guidance, and the knock-on effects on both domestic production and imports from Singapore and Newfoundland — together responsible for an average 906,000 bl/month delivered to the US west coast this year so far. By Jasmine Davis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

EU's Hoekstra balances divergent calls on climate

07/11/24

News

07/11/24

EU's Hoekstra balances divergent calls on climate

Brussels, 7 November (Argus) — EU climate commissioner Wopke Hoekstra, nominated again for the role, balanced conflicting calls around climate legislation in a hearing today with members of the European Parliament (MEPs). Some MEPs were in favour of tougher climate legislation, while others demanded delays to targets. Hoekstra defended key climate energy legislation, including EU CO2 reduction targets for cars and vans, while maintaining a cautious approach on expansion of the EU emissions trading system (ETS) to new sectors. Hoekstra committed to a 2026 ETS review that touches upon maritime, aviation, municipal waste and negative emissions, in response to a question from German centre-right EPP MEP Peter Liese, who has been a key parliament negotiator for ETS reforms. "Negative emissions are a cornerstone of making it to net zero. I'll absolutely look into the ramifications, whether this could be included," said Hoekstra, commissioner-designate for climate, net-zero and clean growth. If international efforts to reduce aviation emissions do not deliver, Hoekstra is also open to an ETS that equally impacts EU and international aviation. Hoekstra underlined the pivotal importance for "predictability" of legislation for industry, referencing certain firms' concern at a 12-month delay to the bloc's deforestation regulation. Hoekstra promised a "dialogue" with the car industry about sticking to CO2 standards for cars and vans and the phase-out, from 2035, of new vehicles with an internal combustion engine (ICE). Hoekstra is "all in" for ensuring the EU car industry's success. But the Dutch politician is reticent about delaying penalties for carmakers that do not meet CO2 standards from 2025. For biofuels and e-fuels, Hoekstra does not want to change current EU legislation. The EU should not open the "box that was closed" by EU legislation, notably with a 2035 phase-out that only foresees use of the ICE with non-biogenic CO2 neutral fuels. "I feel there is a bright future for biofuels. We need more, particularly in many other domains," he said, equally noting that the EU needs to "focus first and foremost on electrification". And Hoekstra could give no clear deadline for phasing out fossil fuel subsidies in the EU, but said he would do his best to create transparency on the issue. Speaking notes prepared in advance of the hearing already indicated a cautious approach to new elements in future climate policy. Hoekstra underlined the need for a "business case" for decarbonisation in agriculture and forestry, mirroring the approach taken by EU agriculture commissioner-designate Christophe Hansen. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more