The spread between ethanol D6 and biodiesel D4 Renewable Identification Numbers is starting to be quoted as one unit, an analyst said, with the spread maintaining between a 10 and 13 cents discount for D6 RINs. A D4 RIN is equivalent to 1.5 D6 RINs.
"Ethanol RINs are generally accepted to be a floor on biodiesel RIN prices for the same vintage," Michael Walker, quantitative analyst for Augsburg Energy, Ramsey, New Jersey, said this morning. "We even see the D6/D4 spread quoted as one unit and it was sitting around 13 cents yesterday."
He added given the different market sizes in biodiesel and ethanol RINs, a movement in ethanol prices would have "much more impact on that spread and the other product than a movement in biodiesel prices."
Trade sources agree that ethanol RINs affect biodiesel RINs and see the spread between them maintaining at the same level.
"It seems to maintain a spread of 10 cents," one trade source said Wednesday.
Myke Feinman can be reached at email@example.com.
© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.