By Stephanie Kelly
NEW YORK, Dec 4 (Reuters) – U.S. biomass-based credits
traded at a three-year high on Friday, as refiners actively
sought to buy them to cover their biofuel blending obligations
for the 2019 compliance year, traders said.
The buying spree reflected skepticism in the market that
either the outgoing Trump administration or the incoming Biden
administration would provide any waivers for the obligations, as
some facilities have requested.
Biomass-based (D4) credits <RIN-D4-US> traded at $1.00 each
on Friday, up from 95 cents each on Thursday, traders said. The
credits have not traded that high since December 2017, Refinitiv
Eikon data showed.
Under U.S. law, refiners must blend billions of gallons of
biofuels into their fuel mix, or buy tradable credits from those
that do. Refiners can get exemptions from the obligations if
they can prove the requirements do them financial harm.
The waiver program has been a point of debate this year
after a U.S. appeals court in January cast doubt over it by
ruling that waivers granted to small refineries after 2010
should only be approved as extensions. Most recipients of
waivers in recent years have not continuously received them.
While the U.S. Environmental Protection Agency has rejected
scores of retroactive requests for waivers that would have put
refiners in compliance with the court ruling, EPA still has not
ruled on 32 pending petitions for the 2019 compliance year.
Prices for the credits, or Renewable Identification Numbers,
have surged this year, with biomass-based credits trading at
about 150% more from the start of the year, while renewable fuel
(D6) credits <RIN-D6-US> have risen eight-fold.
(Reporting by Stephanie Kelly; editing by Diane Craft)
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