U.S. biomass-based credits trade at 3-yr high -traders

By Stephanie Kelly

NEW YORK, Dec 4 (Reuters) - U.S. biomass-based credits traded at a three-year high on Friday, as refiners actively sought to buy them to cover their biofuel blending obligations for the 2019 compliance year, traders said.

The buying spree reflected skepticism in the market that either the outgoing Trump administration or the incoming Biden administration would provide any waivers for the obligations, as some facilities have requested.

Biomass-based (D4) credits <RIN-D4-US> traded at $1.00 each on Friday, up from 95 cents each on Thursday, traders said. The credits have not traded that high since December 2017, Refinitiv Eikon data showed.

Under U.S. law, refiners must blend billions of gallons of biofuels into their fuel mix, or buy tradable credits from those that do. Refiners can get exemptions from the obligations if they can prove the requirements do them financial harm.

The waiver program has been a point of debate this year after a U.S. appeals court in January cast doubt over it by ruling that waivers granted to small refineries after 2010 should only be approved as extensions. Most recipients of waivers in recent years have not continuously received them.

While the U.S. Environmental Protection Agency has rejected scores of retroactive requests for waivers that would have put refiners in compliance with the court ruling, EPA still has not ruled on 32 pending petitions for the 2019 compliance year.

Prices for the credits, or Renewable Identification Numbers, have surged this year, with biomass-based credits trading at about 150% more from the start of the year, while renewable fuel (D6) credits <RIN-D6-US> have risen eight-fold. (Reporting by Stephanie Kelly; editing by Diane Craft)

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