Prices for 2013 US biomass-based diesel renewable credits, also known as RINs, dropped Tuesday to $0.23/RIN, the lowest level recorded by Platts, on strong supply and weak demand, sources said.
Specifically, biodiesel RINs -- categorized as "D4" RINs by the US Environmental Protection Agency -- for the current year were assessed down 1 cent from the previous record low Monday.
Platts started assessing 2013 biodiesel RINs on January 2.
By time of assessment, bids for 2013 biodiesel RINs were heard at $0.22/RIN against offers at $0.24/RIN, and no trades were reported.
"Supply is really strong for biodiesel RINs right now," said a RINs trader when asked to explain the record-low price.
US biodiesel production in October passed the Renewable Fuels Standard federal mandate for full-year 2013, according to the latest EPA data released Monday via the agency's Moderated Transaction System website.
Production through October was at 1.39 billion gallons, besting the Renewable Fuels Standard's 1.28 billion-gallon target for the year.
"Since supply is so high, no one really is hurting themselves looking for biodiesel RINs," said a RINs broker regarding weak demand.
The US Environmental Protection Agency issues RINs to track renewable fuel usage throughout the supply chain. Refiners, importers and blenders -- known as "obligated parties" -- use them to show the EPA that they have fulfilled their mandated government use of renewable fuels. If the obligated party has not used enough physical product, it can buy RINs to satisfy the quota.
