Key facts
- U.S. ethanol blending credit prices (RINs) fell to their lowest in over four months.
- The EPA extended the September 1 compliance deadline for refiners.
- The EPA will decide on small refinery exemption requests by the end of August.
- Conventional ethanol RINs (D6 RINs) traded at $1.75, down 34 cents from Friday.
- Market estimates suggest exemptions could free up 1.2 to 1.8 billion RINs.
Prices for U.S. ethanol blending credits, known as Renewable Identification Numbers (RINs), experienced a significant drop on Monday, reaching their lowest point in over four months. This decline was attributed to an announcement by the Environmental Protection Agency (EPA) regarding an extension of the September 1 compliance deadline for refiners and the impending ruling on long-pending small refinery exemption requests, expected by the end of August.
Conventional ethanol RINs (D6 RINs) were trading at $1.75 each, a decrease of 34 cents from Friday and the lowest level observed since April 15. Biomass-based diesel RINs for 2026 also saw their weakest performance since late April, trading around $1.92. These credits are crucial under the Renewable Fuel Standard, which mandates refiners to meet biofuel blending requirements by generating or purchasing RINs.
Jessica Dell, head of U.S. biofuel pricing at Argus Media, noted that RIN prices lost substantial value due to the EPA's anticipated decisions on small refinery exemptions. The market had already seen a 5% drop on Friday. The EPA is currently reviewing 34 exemption petitions, some dating back to July 2024. The uncertainty surrounding the timing of these decisions has significantly impacted the market, especially following the finalization of record-high renewable fuel blending requirements for 2026 and 2027.
Scott Irwin, an agricultural economist at the University of Illinois, suggested that the extension of the compliance deadline signals potential 'RIN relief' for refiners concerning their 2026 and 2027 obligations. Market participants anticipate that the EPA's rulings could release between 1.2 billion and 1.8 billion RINs, which small refiners could use to meet their 2025 compliance obligations. This figure is notably higher than the approximately 1.3 billion RINs previously expected by the market, leading to a collapse in RIN prices.