RIN costs nearly double for ethanol and biomass diesel in 2026
In Washington, the Energy Information Administration says compliance credits for biomass-based diesel and ethanol have doubled in value since the start of this year. The credits, known as renewable identification numbers (RINs), have increased in price, mostly because of higher U.S. biofuel blending targets. The combination of high RIN prices and rising motor gasoline and diesel fuel prices has created an especially favorable market for producing and blending biofuels.
RINs are credits generated when biofuels are produced or imported and are used to comply with the Renewable Fuel Standard (RFS) program. Under the RFS, the U.S. Environmental Protection Agency (EPA) sets annual renewable volume obligations (RVOs) for the minimum volume of biofuels that must enter the U.S. fuel supply. Obligated parties—petroleum refiners and motor gasoline and diesel importers—comply either by blending biofuels into petroleum-based fuels or by purchasing RIN credits.
As of June 4, biomass-based diesel (D4) RINs traded at $2.41 and ethanol (D6) RINs traded at $2.37, both close to their all-time highs set in 2021. Because one gallon (gal) generates 1.5 RINs for biodiesel and 1.6 RINs to 1.7 RINs for renewable diesel, these fuels currently generate more than $3.50/gal of credits. A gallon of fuel ethanol generates 1.0 credit.
RIN prices increased in 2026 primarily because of higher blending mandates. On March 27, the EPA announced the final RFS rule for 2026 and 2027, establishing significantly higher RVOs than in 2025. RIN prices increase with high RVOs to reflect the higher profit margins biofuel producers need as incentive to produce enough fuel to meet mandates.
Higher prices for petroleum products make fuel ethanol relatively more attractive to blend into gasoline. Relative to motor gasoline prices, the U.S. Gulf Coast fuel ethanol price, adjusted for energy equivalence, has been lower most days since mid-March. The higher RIN value that blenders using ethanol can then sell on the open market to companies that need to remain in compliance also incentivizes more blending into gasoline. The fuel ethanol discount to gasoline has been more than $2/gal in May and June when adding in the higher RIN value.
Category: Fuels
