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RIN values drop 40% as US EPA announces 2018 Small Refinery Exemptions

http://www.chemnet.com   Aug 12,2019 S&P Global Platts
Conventional renewable fuel or D6 2019 Renewable Identification Numbers lost 40% of their value late Friday afternoon on reports the US Environmental Protection Agency was set to make an announcement on 2018 Small Refinery Exemptions, sources said before the details were made public at 5 pm CT.

The EPA reported that 31 SREs would be granted for 2018, with 6 petitions denied.
D6 RINs began the day trading at 20 cents/RIN, were assessed at 19.75 cents/RIN at 1:30 pm CDT before falling and were heard trading as low at 12 cents/RIN.

The last time S&P Global Platts assessed 2019 D6 RINs below 12 cents/RIN was March 20.

SREs are given to refineries with a capacity of less than 75,000 b/d that demonstrate that compliance with the Renewable Fuels Standard causes "disproportionate economic hardship."

One key issue is that the EPA has not reallocated the mandate volumes that the small refineries would have been required to meet back into the program, which therefore has the practical effect of reducing mandates and lowering biofuel demand.

"The Trump administration wanted to break renewables," a source said of the reports.

According to the EPA's website, 40 petitions were received for SREs for 2018, the highest ever, with 38 of those petitions listed as pending.

According to market sources, the EPA was expected to grant a significant amount of these petitions.

The EPA has so far granted 35 exemptions out of the 37 petitions for 2017.

EPA was not immediately available for comment Friday.
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