Talks on US RFS depress D6 credit prices

Ongoing talks between competing corn and oil industries on US’ Renewable Fuels Program have helped prompted a fall in renewable fuel (D6) credits.

Prices of renewable fuel (D6) credits traded at around 74 cents this week, the lowest levels since early October, Reuters reported, quoting traders and Oil Price Information Service.  

Traders prices had fallen view of reports that US Senators led by Texas Republican Ted Cruz had persuaded the Trump administration to get corn-state lawmakers to join talks over potential changes to the US Renewable Fuel Standard (RFS).

Oil refiners are hostile to the RFS because of the costs of blending and regulation, adding that it offers incentives to rival fuels such as ethanol and threatens to put oil refiners out of business. 

The corn-state senators joined the talks on the proviso that the outcome shouldn’t undermine the integrity of the RFS, a spokesman for one of the senators was reported as saying.

In late November the US ethanol industry was buoyed by an Environmental Protection Agency (EPA) mandate that refiners use 15 billion gallons of conventional renewable fuels in 2018 — mainly corn-based ethanol — in US fuel supply, the same level as this year.

But since then the Cruz-brokered talks in Congress suggest that the political pendulum might be less skewed towards the ethanol industry.