Proposed US budget deal includes reinstated biodiesel rebate

A proposed budget deal to avoid a shutdown of the US federal government has included a one-year reinstatement of the biodiesel rebate, which will be applied retroactively for 2017.

However, the reinstatement of the rebate was less than the two-year extension sought by the biofuels industry, according to market sources.  

As part of the budget deal is a $1-per-gallon credit given to biodiesel blenders that last expired at the end of 2016.

The $1 rebate can be the difference between making a profit or making a loss for some biodiesel producers in the US, who make the biofuel largely using soybean oil.

Prices of the biomass-based diesel (D4) Renewable Identification Number (RIN) credits traded at 84 cents per unit, up from lows of 72 cents on Wednesday, Reuters reported traders as saying.

“The one-year deal means RINs have to provide the margin for the loss of the $1-per-gallon,” one trader was quoted as saying.