U.S. renewable fuel credits climb as EPA considers ruling on waiver program
Renewable fuel (D6) credits for 2020 traded at 50 cents each on Monday, up from 37 cents since the start of May, traders said. Under the Renewable Fuel Standard (RFS), refiners must blend billions of gallons of biofuels into the fuel pool or buy credits from those that do.
Small refineries that can prove the requirements would cause financial harm have been able to apply for exemptions from the mandate. The U.S. Environmental Protection Agency under President Donald Trump has granted a much higher number of waivers than in previous years.
However, in January the Tenth Circuit Court of Appeals said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an “extension.” If applied broadly, the decision could effectively end the waiver program.
The EPA has not yet said how it will apply the decision.
“EPA continues to deliberate and engage with stakeholders over the broad ranging implications of COVID-19 for the implementation of the RFS program,” an EPA representative said.
Since the court decision in late January, D6 credits have jumped 354% from 11 cents each.
Biomass-based (D4) credits traded at 60 cents each, up from 52 cents each a month ago, traders said. They have risen 30% since the court ruling.
Reporting by Stephanie Kelly in New York; Editing by Matthew Lewis
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