U.S. ethanol blending credits tumbled on Monday, dropping to levels not seen in more than four months after the Environmental Protection Agency announced it would extend the September 1 compliance deadline for refiners and said it would issue rulings on long-pending small refinery exemption (SRE) petitions by the end of August.
At 12:45 p.m. ET, conventional ethanol Renewable Identification Numbers (D6 RINs) were trading at $1.75 apiece, down $0.34 from Friday and at their weakest point since April 15, according to Argus Media. Those credits had reached a recent high of $2.50 on July 7.
Biomass-based diesel RINs for 2026 were assessed at about $1.92 each, marking their lowest level since late April, Argus data showed.
Under the Renewable Fuel Standard - the federal program that sets renewable fuel blending requirements - refiners are required to demonstrate they met their 2025 biofuel blending mandates by September 1. They can do so by producing Renewable Identification Numbers through blending biofuels into the fuel supply or by purchasing RINs from other market participants.
Jessica Dell, head of U.S. biofuel pricing at Argus Media, said RIN prices lost substantial value again during Monday’s session in response to the EPA’s impending small refinery exemption decisions. RIN prices had fallen 5% on Friday. The agency is reviewing 34 exemption petitions, some dating back to July 2024. Dell noted that the timing of those rulings has been a significant source of market uncertainty, particularly after the EPA finalized record-high renewable fuel blending requirements for 2026 and 2027 that have increased compliance pressures.
Market observers interpreted the compliance deadline extension as a signal that refiners might receive some form of relief. Scott Irwin, an agricultural economist at the University of Illinois, said extending the compliance deadline is seen as signaling some form of "RIN relief" for refiners’ 2026 and 2027 obligations as well.
Participants in both the refining and ethanol sectors, along with an analyst, estimate that the EPA’s SRE rulings could free up between 1.2 billion and 1.8 billion RINs that small refiners might apply toward meeting their 2025 compliance requirements. The EPA had previously indicated it could reallocate 990 million RINs associated with exemptions.
One senior trader said the market for RINs collapsed amid speculation that SRE relief could amount to roughly 1.8 billion credits - a number that surprised traders compared with the approximately 1.3 billion the market had been expecting.
Summary
The EPA’s extension of the September 1 compliance deadline and its commitment to decide on 34 SRE petitions by the end of August prompted a sharp sell-off in ethanol and biomass-based diesel RIN prices as traders priced in the potential release of a large volume of credits.
Key points
- Conventional D6 RINs fell to $1.75 at 12:45 p.m. ET, down $0.34 from Friday and the weakest since April 15.
- Biomass-based diesel RINs for 2026 were last assessed around $1.92, the weakest since late April.
- Sectors affected include refiners, biofuel producers, and RIN traders due to potential shifts in compliance costs and credit supply.
Risks and uncertainties
- The timing and outcome of the EPA’s rulings on 34 SRE petitions - some dating to July 2024 - remain uncertain and could sharply change RIN supply.
- Market expectations about the number of RINs that may be freed up vary widely - estimates range from 1.2 billion to 1.8 billion, compared with a previously indicated reallocation of 990 million.
- Volatility in RIN prices could affect refiners’ compliance costs and ethanol producers’ revenue, with potential knock-on effects for related commodity markets.