2013 D4 biomass-based diesel renewable identification numbers surged in value Friday morning due to jitters there won't be enough supply to meet the 1.28-billion-gallon blending mandate, a trade source said, with D4 RIN values climbing after the Environmental Protection Agency released February production volumes.
RINs are the tradable credits used by refiners, blenders and importers to show compliance with Renewable Fuel Standard's annual blending mandates.
EPA reported 80.5 million gallons of biomass-based diesel production for February, up from 79.5 million gallons in January. D4 RINs generated in February totaled 121.251 million, up from 121.082 million in January, with each D4 RIN equal to 1.5 gallons of biomass-based diesel.
Based on the mandated 1.28 billion gallons, one trade source believes the price jump is due to jitters not enough biodiesel would be produced this year to meet the blending mandate.
"Eighty million gallons, that was on the low side," to meet the blending volume obligations, he said, adding it could be too early in the year to tell and prices could stabilize later.
2013 D4 RINs traded at 84.0 cents, 85.0 cents, 86.0 cents, 88.0 cents, and last at 89.0 cents Friday morning, up from 79.0 cents to 81.0 cents on Thursday following relatively stable prices all week.
Myke Feinman can be reached at firstname.lastname@example.org.
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