ICE reports strong demand for US renewable fuel futures

By Intercontinental Exchange Inc | May 19, 2023

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Intercontinental Exchange Inc., a global leader in data, technology and market infrastructure, today announced strong demand for U.S. renewable identification numbers (RINs) as more participants with RIN compliance obligations take on the price risk associated with mandated targets for secure the integration of renewable fuels converted into transport fuel.

RINs are credits generated to track and enforce compliance with the US federal Renewable Fuel Standard (RFS) program, which mandates that US transportation fuels include renewable fuels. Committed parties under the RFS program include US refiners and importers of transportation fuels

ICE offers the most liquid markets for trading RIN futures. As of May 15, 2023, the equivalent of over 2 billion RINs have been traded on the ICE year to date, already exceeding the number traded in all of 2022 when 1.6 billion were traded. That equates to 627 million RINs traded in April 2023, a new record for a single month. Meanwhile, open interest in ICE’s D6 ethanol and D4 biofuel futures (OPIS) is at a record high, equaling 727 million RINs.

The volume of RINs traded on ICE so far this year is equivalent to 1,400 loads of refined products.

“RIN prices affect the dynamics of the market for refined products. Hedging RINs has become increasingly important for commercial market participants to meet compliance obligations, protect their margins, determine crack spreads to create other products, and determine if there are arbitrage opportunities for exporting transportation fuel,” said Jeff Barbuto, Global Head of Oil Markets at EIS. “It’s great to see the volume developing and the number of participants in these contracts continue to grow.”

ICE’s renewable fuel futures markets are part of ICE’s extensive biofuel complex, which includes ICE’s renewable volume commitment futures. The European biodiesel sector is mostly trading as the difference to the global refined benchmark ICE Low Sulfur Gasoil, which is serving as a proxy hedge due to its liquidity and open interest until December 2026.