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CME Group To Add RIN Trading

CME Group announces plans to add biodiesel, ethanol RIN trading in May, Bloomberg reports

Published on: Apr 8, 2013

A CME Group spokesman Monday told Bloomberg that the company would be launching contracts to trade ethanol and biodiesel renewable identification numbers in May.

RINs are Renewable Identification Numbers – identifying numbers that renewable fuel producers and importers generate based on the volume of compliant renewable fuel that they make available. The RINs can be traded and used by petroleum refiners and importers to show compliance with Renewable Fuels Standard volume obligations.

Recently, RIN prices have boomed, causing petroleum groups to point a finger at the RFS for making ethanol production higher than what is needed in the marketplace. In turn, they say, the blend wall – a cap on the amount of ethanol that can be blended into traditional fuels – is boosting RIN demand and driving prices higher because of compliance concerns.

CME Group announces plans to add biodiesel, ethanol RIN trading in May, Bloomberg reports
CME Group announces plans to add biodiesel, ethanol RIN trading in May, Bloomberg reports

Ethanol (D6) RIN prices peaked at $.90 earlier this year, according to the Oil Price Information Service as reported by University of Illinois' Farmdoc Daily.

Petroleum groups have also expressed concern that the rising RIN price is driving up consumers' fuel costs. Sens. David Vitter, R-La., and Lisa Murkowski, R-Alaska sent a letter to EPA Director Nominee Gina McCarthy March 20 requesting a plan to "protect American citizens from rising gas prices due to the rising cost of ethanol Renewable Identification Numbers."

Another issue in the mix is ongoing concern about RIN integrity, which earlier this year led the Environmental Protection Agency to develop a program to verify RIN validity.

CME could not be immediately reached for comment.