RIN prices trended lower over the course of August as the market reacted to a narrowing soybean oil-to-heating oil (BOHO) spread. The mounting oversupply of D4 credits weighed on RIN values, while D3 losses were less pronounced.
The BOHO spread narrowed off the widest level in over a year at $2.66/gallon on July 25, down to just $1.80/gallon in the second week of August. D4 RINs led losses driving renewable D6 and advanced D5 credits lower across all vintages. A stronger renewable diesel margin environment also weighed on D4 markets as conventional diesel strength and rising LCFS credit values boosted returns.
D3 losses were less pronounced as insufficient RIN generation, and the lack of a Cellulosic Waiver Credit (CWC) underpinned the market. A move by Democratic members of Congress to press the EPA to implement the controversial eRIN program added bearish undertones to the marketplace. The EPA will hold a webinar on RFS Set Rule implementation on September 7.