Although these are dramatic drops in RINs generation, it should be noted that there is seasonality at play here and also a strong incentive for generators to have applied for BTC before year-end and therefore ensured that RINs were fully generated to be reconciled with their request for the credit. Since RINs are nested, the overall drop in total RINs is more reflective of the situation. Nevertheless, this provides a sobering view of the biofuels situation in the US. The EPA reconsideration of the 13 petitions for SRE adds to the overall nervousness, and RINs did the work today as D4 RINs rallied to 93 c/gallon, keeping the biodiesel screen crush margin at negative 16 c/gallon, which seems to be the sweet spot and equivalent to the soybean oil credit under 45z. However, as previously stated, with the carry in soybean oil, this screen crush margin widens down the curve to nearly negative 40 c/gal by Jul . Meanwhile, in Europe, gasoil was under pressure today ahead of Germany's elections this weekend, taking BOGO higher to +$315/mt over ICE gasoil, which is $200/mt below where FAME 0 is trading in ARAG. The big story today has to be the India situation, where rumors of additional duties to be imposed on imported vegetable oils as soybeans are trading domestically 10% below the support price for farmers. As stated previously, a large heat crack margin on gasoil is what will end up breaking soybean oil. Have a great weekend!
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