NEW YORK, April 29 Futures contracts for renewable fuel credits listed Monday on the IntercontinentalExchange, but no trades took place, according to a spokeswoman for the exchange.
The ICE launched three futures contracts for renewable identification numbers (RINs) in response to increased volatility and surging prices for the credits.
Federal law requires refiners and importers to show the credits as proof of compliance with rules requiring the blending of renewable fuels such as ethanol and biodiesel into U.S. gasoline and diesel stocks. If refiners or importers don't blend enough ethanol, for instance, they must make up the difference by buying the credits.
Ethanol RINs surged from about 5 cents per gallon in October 2012 to more than a dollar per gallon in early March. They were heard traded in the low 70-cent range on Monday.
The ICE's futures contracts allow buyers to hedge risk in three types of RINs - ethanol, biodiesel and advanced biofuel - in blocks of 10,000 RINs.
Rival exchange operator CME Group is also launching RIN futures contracts, which will become available for trading starting May 13 [story: nWNBB00B6B].