LCFS & RIN Pricing Report Through April 6, 2023

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• Figure 1. California & Oregon LCFS Pricing
• Figure 2. RIN Pricing

Figure 1. California & Oregon LCFS Pricing through 4/6/2023

Prompt LCFS prices rallied nearly $3.00/t, or 4.28%, on the week. LCFS markets have been supported by trader buying in recent weeks. Gains were more pronounced in the second half of the year.

The forward structure developed a more pronounced contango across all quarters for the year.

Figure 2. RIN Pricing through 4/6/2023

	D3	D4	D5	D6
Price April 6th, 2023	$ 1.93	$ 1.56	$ 1.55	$ 1.53
Average Weekly Price April 3rd, 2023 - April 6th, 2023	$ 1.94	$ 1.55	$ 1.54	$ 1.52
Average Monthly Price April 2023	$ 1.94	$ 1.55	$ 1.54	$ 1.52

RINs tracked marginally lower amid persistent thin market participation. A lack of actionable headlines left traders on the sidelines waiting for indications ahead of an expected June 14 finalization of the ‘Set Rule.’ 

Fresh RIN production data showed D4 RIN generation remained robust at nearly 514 million credits. This, along with the approval by a federal court of a SRE for Calumet Special Products 30,000 b/d refinery in Montana provided bearish undertones to  advanced RIN markets.

SREs were carved out in the Renewable Fuel Standard (RFS) for refiners producing 75,000 b/d or less which could prove compliance with the RFS—i.e., purchasing RINs—resulted “undue economic hardship.”

The chance of a pivot in the EPA's approach to SREs continued to provide underlying bearish sentiment. A reversal or dovish change in SRE policy would have an outsized impact on the D6 category. 

Market activity is likely to remain curtailed ahead of guidance from the EPA expected in June.

Questions? Contact our team for more information: environmental@aegis-hedging.com