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D4 RINs pricing lag despite overproduction of Biodiesel/RD


Clearly when one looks at LCFS credits, BOGO and BOHO who are all down nearly 35% since Jan2, you can only wonder why are the RINs not pricing properly and only down 25%? RINs are down of course but there is at least 10% missing.. We know that we are overproducing in the US probaby by nearly 20% over Renewable Volume Obligation (RVO). It was already the case in 2023 and some of those RINs were rolled over. 2024 will also be a challenge as you can only rollover 20% to the next year. The market includes an inherent risk that if RVO are not increased significantly so we risk having a glut of 2024 D4 RINs. Only few producers have ramped-down or chose to stop producing. When you consider that we move to a producer tax credit after Jan 1, the picture is even gloomier. US producers will surely be looking to retire RINs in 2025 to support RINs value which has a significant impact on export potential from US - meaning US will have to turn into a major exporter of Biodiesel/RD.



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