In the Renewable Fuel Standard compliance market, 2014 biomass-based diesel D4 Renewable Identification Numbers are holding a sharp 14.5 cents premium to 2013 vintage D4 RINs, talked Friday morning at 66.5 cents, with the premium easing from 18.0 cents over Thursday.
"Either buyers are favoring RINs over physical product at this time, or buyers are speculating that physical product will be short in coming months, or both," said Pete Moss, president biodiesel analyst for Frazier, Barnes and Associates, Memphis, Tenn.
The market awaits production data on qualifying biomass-based diesel for February from the Environmental Protection Agency, with the EPA last reporting January output at 86.25 million gallons, down a steep 61% from 219.56 gallons produced in December. The drop off follows the Dec. 31 expiration of a $1 gallon tax credit paid to blend biodiesel into petroleum-based diesel.
"If the tax credit is not extended soon, it will have a dampening effect on production," Moss added.
Myke Feinman can be reached at email@example.com.
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