2020 spike in RIN prices driven by ‘Biden bump’, policy, supply and demand

In Washington, D.C., S&P Global Platts reports that D6 RIN prices have more than quadrupled in 2020, starting at 15.25 cents on Jan. 3 and climbing to an annual high 70 cents on Nov. 9 with a post-election day spike based on the belief that a Biden administration would result in stronger enforcement of biofuel mandates.

“In an ordinary year, the largest swing in RIN values usually occurs when the US Environmental Protection Agency (EPA) proposes new renewable fuel mandates for the following year or finalizes mandates following a public comment period, neither of which has happened in 2020,” according to S&P Global Platts. “Prior to Nov. 3, this year’s escalation in RIN prices was mostly a story of supply and demand. SREs exempt small refiners from blending requirements under the Renewable Fuel Standard (RFS). For the 2016 to 2018 compliance years, the Trump EPA granted 85 SREs, exempting over 4.0 billion RINs from compliance. Following a federal appellate court decision on Jan. 24, fewer refineries will receive exemptions, meaning that more companies will need to acquire RINs to meet their RFS obligations.”