NEW YORK (Reuters) - U.S. renewable fuel credits rose on Monday to a three-year high, traders said, after the Trump administration failed for the second time to meet a deadline to propose rules on the amount of biofuels refiners must blend into their fuel mix this year.
The U.S. Environmental Protection Agency (EPA) had been aiming for Dec. 31 to propose a rule on so-called Renewable Volume Obligations for 2021, according to its agenda on the Office of Information and Regulatory Affairs’ website. The EPA previously missed a Nov. 30 deadline, after the coronavirus pandemic complicated the rulemaking process.
Renewable fuel (D6) credits traded at 79.5 cents each on Monday, the highest since December 2017. Biomass-based (D4) credits traded at $1.04 each, highest since November 2017. D4 credits were in part led higher by higher prices for soybeans.
EPA is in charge of administering the U.S. Renewable Fuel Standard, which requires refiners to blend billions of gallons of biofuels into their fuel mix each year, or buy tradable credits from those that do.
The regulation has sparked a fierce debate between the oil and biofuel industries. The oil industry claims the rules are too costly, while corn farmers and biofuel producers support the regulation because it boosts ethanol demand.
The coronavirus pandemic has slammed both industries, sinking fuel demand and battering margins. The industries have called for EPA to propose the 2021 RVO to provide market certainty.
EPA did not immediately respond to a request for comment.
Reporting by Stephanie Kelly; Editing by David Gregorio
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