Biodiesel Renewable Identification Numbers for 2010 and 2011 reached their highest level so far this year on Monday, after being assessed at $1.10/RIN and $1.15/RIN, respectively.
A RIN is a government tracking number that identifies a gallon of ethanol or other renewable fuel produced or imported to the US for use as retail fuel; it is issued to an "obligated party" and managed by the US Environmental Protection Agency.
An obligated party is a gasoline refiner, blender or importer assigned by the EPA a volume of ethanol that it is required to use in a given year.
The obligated party can satisfy its EPA obligation by submitting the RIN showing the fuel it has used, or in lieu of that, by purchasing a RIN that has been detached by the producer and submitting that "credit" to the EPA.
Most recently, prices for 2011 Biodiesel RINs have hovered in the 75-98 cents/RIN range, continuing to show some volatility — despite reinstatement of the $1/gal tax credit in 2010 by Congress aimed at aiding the revival of the biodiesel industry.
Commenting on the rally in prices, one source noted that high prices for biodiesel was one reason behind the rise in RINs.
"Plants are getting hit with production pressure, also RINs have in a way preceded a biodiesel run-up," the source said, explaining that this has caused the availability of RINs to dry up, creating "upside momentum."
Platts on Monday assessed SME biodiesel in Chicago at $3.79/gal.
