By Siddharth Cavale and Shariq Khan
NEW YORK, Aug 24 (Reuters) - Prices for U.S. ethanol blending credits plunged on Monday to their lowest levels in more than four months, market sources said, after the Environmental Protection Agency said it would extend a September 1 compliance deadline for refiners and rule on long-pending small refinery exemption requests by the end of August.
Conventional ethanol Renewable Identification Numbers (D6 RINs) traded at $1.75 each at 12:45 p.m. ET, down 34 cents from
Friday and their lowest level since April 15, according to Argus Media. The credits had traded as high as $2.50 on July 7. Biomass-based diesel RINs for 2026 were last assessed at around $1.92 each, their weakest level since late April, Argus data showed.
Under the Renewable Fuel Standard, a federal program aimed at increasing renewable fuel usage, refiners are required to show they had met their 2025 biofuel blending mandates by September 1, either by generating Renewable Identification Numbers (RINs) through blending biofuels into the nation's fuel supply or by purchasing those credits from other market participants.
Jessica Dell, head of U.S. biofuel pricing at Argus Media, said RIN prices lost substantial value again during Monday's session in response to the EPA's impending small refinery exemption decisions. RIN prices had fallen 5% on Friday.
The EPA is reviewing 34 exemption petitions, some dating back to July 2024. The timing of those decisions has been a major source of uncertainty for the market, especially after the agency finalized record-high renewable fuel blending requirements for 2026 and 2027 which have added to their compliance burdens, Dell said.
Extending the compliance deadline is seen as signaling some form of “RIN relief” for refiners' 2026 and 2027 obligations as well, Scott Irwin, an agricultural economist at the University of Illinois said.
Market participants expect the EPA's rulings to free up a significant number of credits. Representatives of the refining and ethanol industries and an analyst estimate that the exemptions could free up between 1.2 billion and 1.8 billion RINs that small refiners could use to meet their 2025 compliance obligations. The EPA had previously indicated it could reallocate 990 million RINs associated with exemptions.
One senior trader said RINs collapsed as speculation began of SRE relief at around 1.8 billion, a surprise compared to the roughly 1.3 billion the market had been expecting.
(Reporting by Siddharth Cavale and Shariq Khan in New York, editing by Deepa Babington)
