Record number of biofuel RINs traded highlighting growth in road transport sector
Intercontinental Exchange has announced rapid growth in its US Renewable Identification Numbers (RINs) and European Biofuels derivatives, reflecting the increasing use of biofuels by the road transportation sector to reduce emissions.
RINs are credits which track the compliance of biofuels in the US Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS) programme to meet biofuel blending targets in gasoline and diesel.
RINs are generated by renewable fuel producers for compliance purposes and traded in secondary markets.
In February 2022, approximately 194 million RINs traded, a record high for a single month, with open interest hitting a record equivalent to over 112 million RINs. A single day volume record was set on February 23 with the equivalent of 35 million RINs traded.
The number of participants trading RINs has doubled versus 2020 as participants increasingly seek to manage their exposure to volatility in the price of RINs.
“The EPA’s Renewable Fuel Standard aims to reduce emissions from road transportation by mandating renewable fuel levels,” said Jeff Barbuto, global head of oil markets at ICE.
“As RIN prices have increased, compliance with the RFS has become more expensive. Volume and open interest are building as the market recognizes it can manage RIN price exposure through RIN futures.”
RINs are credits which track the compliance of biofuels in the US Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS) programme to meet biofuel blending targets in gasoline and diesel.
RINs are generated by renewable fuel producers for compliance purposes and traded in secondary markets.
In February 2022, approximately 194 million RINs traded, a record high for a single month, with open interest hitting a record equivalent to over 112 million RINs. A single day volume record was set on February 23 with the equivalent of 35 million RINs traded.
The number of participants trading RINs has doubled versus 2020 as participants increasingly seek to manage their exposure to volatility in the price of RINs.
“The EPA’s Renewable Fuel Standard aims to reduce emissions from road transportation by mandating renewable fuel levels,” said Jeff Barbuto, global head of oil markets at ICE.
“As RIN prices have increased, compliance with the RFS has become more expensive. Volume and open interest are building as the market recognizes it can manage RIN price exposure through RIN futures.”
Loading ...
