Renewable fuel credit prices hit records on U.S. biofuel mandates, oil market volatility
Renewable fuel credits for 2026 hit record levels and continued their run on Friday, driven by stronger Environmental Protection Agency biofuel mandates and widening price gaps between biodiesel and conventional diesel.
Credits tied to biodiesel and renewable diesel blending, known as D4 RINs, rose to a record $2.26 each on Thursday. They were trading at $2.32 on Friday. Before the EPA's mandates were announced on March 27, they were trading at around $1.50. The EPA has set biomass-based diesel requirements at 9.07 billion RINs. Each gallon of biodiesel generates about 1.5 D4 Renewable Identification Numbers (RINs), while renewable diesel generates about 1.7, according to the EPA.
Ethanol blending credits for 2026, known as D6 RINs, also hit a record, rising to $2.225 on Thursday.
“The primary support for higher prices is the strong EPA mandate,” said Paul Niznik, director of energy at Capstone LLC, noting that increased demand has pushed up the cost for producing biodiesel and its key feedstock, soybean oil. Soybean oil prices have risen about 27% since late February.
But swings in oil markets are also amplifying the move. Hopes of a resolution to the Iran war have weighed on diesel prices in recent days. When diesel prices fall faster than biodiesel costs, the gap between the two widens, requiring higher RIN prices to compensate blenders, he said. The opposite happens when diesel prices rise.
"What may be less well understood is that D4 prices would have been even higher if not for the Iran conflict," wrote Scott Irwin, an agricultural economist at the University of Illinois and well-known expert on biofuels, in a LinkedIn post on Thursday.
In the meantime, production of biofuels is still falling short of what is required by the EPA. D4 RIN generation, for instance, rose to just 690 million in April, well below the roughly 915 million needed each month to meet the mandate, pressuring prices.
Niznik said RIN prices have a lot more room to grow from further oil price retreats.
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