RIN prices drop on questionable biofuel rule reports

RIN prices declined sharply today on reports of lower-than-expected US biofuel blending targets from 2020-22, even as a trade group said one purported leak of the targets to the media was a fraudulent "spoofing" email.

The Renewable Fuels Association (RFA) said today that a false email appearing to be from the organization, and sent to some reporters, included "fake" data on an upcoming rule from federal regulators that will propose biofuel blending targets for 2020-22. It remains unclear if any media outlets relied on the email for reporting on the pending renewable volume obligations (RVO).

"We want you to know that this is a complete fabrication and a shameful spoofing attempt," the trade group said this morning. "RFA does not have any information regarding the 2021-2022 RVO numbers or possible revisions to the 2020 RVO."

RIN credits fell sharply amid a selloff midway through the first half of the session, sending the Argus Renewable Volume Obligation (RVO) down by 1.45¢/USG to 12.45¢/USG. The last time the Argus RVO was lower was 22 February when it was 12.41¢/USG.

The Argus RVO is an assessment of the per-gallon cost to comply with the US Renewable Fuel Standard (RFS), which requires that refiners, importers and certain other companies each year ensure minimum volumes of renewables blend into the gasoline and diesel they add to the US transportation fuel supply.

Current year ethanol D6 credits were most recently 94.5¢/RIN, falling by 13.75¢/RIN. Biomass-based diesel D4 RIN credits decreased by 6.75¢/RIN with trade at 130¢/RIN.

RIN markets have turned bearish as participants expect the US Environmental Protection Agency (EPA) to propose long overdue biofuel blending targets. The Argus RVO has steadily declined since early September as market participants nervously wait for the blending proposals.

The initial and prolonged impacts of the Covid-19 pandemic on gasoline consumption has also stoked market concern that targets could be lower than initially expected. Lower biofuel blending targets would translate into less RIN credit demand and a lower cost of compliance.

The EPA declined to comment further on the proposed biofuel blending targets through 2022, which remain under review, according to a federal database. The White House Office of Management and Budget has scheduled three meetings to receive external input on the proposal through 28 September, making it less likely the rule will be formally proposed before then.

By Thom Dwyer and Chris Knight