The prices of US renewable fuel credits have dropped to their lowest price in a year following uncertainty over the future of policies on biofuels in the future.
Renewable fuel credit prices dropped 35.7 percent during the first three months of 2018 in the second year in a row of uncertainty for the Renewable Fuel Standard (RFS) – a law the requires producers to mix renewable fuels with petroleum-based counterparts.
Producers that cannot blend the renewable fuels are required to buy credits, called Renewable Identification Numbers (RINs), which has significantly increased in price recently in order to reduce greenhouse emissions.
While the credits were also introduced to help support the market for corn-based fuels, independent refiners have complained that the cost of credits has exceeded $1 at times.
Scott Irwin, agricultural economist at the University of Illinois, said: “Since last summer, it’s been one big raging political battle in D.C. about changing the implementation of the Renewable Fuel Standard.”
According to data from the Oil Price Information Service (OPIS), credit prices fell to a one year low of 35 cents in mid-March, pressured down by uncertainty surrounding the programme, as well as the bankruptcy of Philadelphia Energy Solutions due to the costs.