The price of renewable fuel credits has reached new records due to the U.S. biofuel mandates and oil market volatility

Renewable fuel credits for the year 2026 reached record levels on Thursday, and they continued to rise on Friday. This was due primarily to the EPA's increased biofuel mandates as well as the widening gap in price between biodiesel & conventional diesel. The D4 RINs (credits) - which are tied to the blending of biodiesel with'renewable diesel' - reached a new record on Thursday. On Friday, they were trading at $2.32. Prior to the EPA mandates being announced on March 27 they were trading for around $1.50. The EPA set the biomass-based diesel requirement at 9.07 billion Renewable Identification Numbers (RINs). According to the EPA, each gallon of biodiesel produces about 1.5 D4 renewable identification numbers (RINs), whereas renewable diesel generates approximately 1.7.

Ethanol Blending Credits for 2026 (also known as D6RINs) also reached a new record on Thursday, increasing?to $2.225.

Paul Niznik is director of 'energy' at Capstone LLC. He said that the EPA mandate has been the primary driver for the higher prices. Since late February, soybean oil prices are up about 27%. The oil market fluctuations are also a factor. Diesel prices have been affected by recent hopes of an end to the Iran War. He said that when diesel prices drop faster than biodiesel prices, the gap between the two increases, forcing blenders to pay higher RIN prices. Diesel prices go up, and the opposite occurs.

In a LinkedIn post published on Thursday, Scott Irwin (an agricultural economist from the University of Illinois, and a well-known biofuels expert) wrote: "What is less?well known is that D4 would have had risen even more if not for?the Iran Conflict." Biofuels production is still below what the EPA requires. In April, D4 RIN production, for example, was only?690 millions, far below the 915 million required each month to meet the mandate. This pushed up prices.

Niznik stated that RIN prices can grow a great deal more as oil prices continue to fall. (Reporting from Siddharth Cavale and Marcelo Téixeira in New York, editing by Nick Zieminski).

(source: Reuters)