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Record-High RIN Prices and the Shifting Economics of Renewable Diesel

Record-High RIN Prices and the Shifting Economics of Renewable Diesel

Key Takeaways

D4 and D6 RINs are trading near all-time highs at $2.37 and $2.41 respectively, generating effective RIN incentives ranging between $3.85 and $4.10 per gallon for renewable diesel producers.
Significantly higher RVOs for 2026–2027 under EPA’s “Set 2” rule are the primary driver, creating a strong domestic policy tailwind for biofuel production.
U.S. D4 RIN values alone now exceed the combined Canada CFR and BC LCFS incentive stack of ~$2.18/gal, calculated using canola oil feedstock, suggesting that the U.S. domestic market may now offer superior economics for both domestic and Canadian producers.
With full RINs still applicable to imported renewable diesel through 2027, non-U.S. producers may increasingly find the U.S. market attractive. However, the EPA’s deferred rule on imported biofuel RIN reductions, effective from 2028, would be a critical watch point for cross-border trade dynamics.

EPA’s “Set 2” Rule Drives RIN Prices to Near-Record Levels

Compliance credits for biomass-based diesel and ethanol have approximately doubled in value since the start of 2026. Under the RFS, the EPA establishes annual Renewable Volume Obligations (RVOs) which obligated parties (petroleum refiners and motor gasoline and diesel importers) must meet either by blending qualifying biofuels or purchasing RIN credits.

The primary catalyst behind this surge is the EPA’s “Set 2” rule, finalized on March 27, 2026, which established significantly higher RVOs for 2026 and 2027 across cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. RIN prices tend to rise in tandem with higher RVOs, as they must reflect the profit margins producers need as incentive to meet elevated mandates. The EPA has positioned the rule as a deliberate step up from the prior “Set 1” volumes, framing it as a realignment with Congress’ original intent. The agency believes the rule will expand the use of domestically produced biofuels, support American farmers, and advance energy independence.

RIN Price Levels: Approaching All-Time Highs

Source: U.S. EPA

As of June 2026, Both D4 and D6 prices are trading close to their all-time highs, last seen in 2021. For renewable diesel specifically, which generates 1.6 to 1.7 RINs per gallon, the effective RIN incentive ranges between $3.85 and $4.10 per gallon at current prices. This level of credit value creates a highly favorable economic environment for biofuel producers and blenders.

Cross-Border Comparison: Canadian Incentives vs. U.S. RINs

To contextualize the current attractiveness of the U.S. market, it is instructive to compare prevailing U.S. RIN values against incentives available under Canadian low-carbon fuel programs. Using the Analytics Toolkit Details – CCarbon, indicative incentives for RD producers in Canada for June 2026 are estimated as follows:

Note: These examples are based on Canola oil feedstock

While Canada offers competitive incentives, particularly in British Columbia, U.S. RIN incentives for RD alone ranging between $3.85 and $4.10 per gallon at current prices substantially exceed even the highest available Canadian incentive of $2.18/gal.

The current RIN price environment carries substantial implications for the direction of RD trade flows into the U.S. With domestic RIN economics materially exceeding available Canadian incentives, U.S. producers are expected to find the domestic market increasingly more rewarding than exporting northward, pointing to a continued tightening of U.S. RD export volumes to Canada.

The flip side of this same equation, however, is equally compelling. A market this profitable does not just retain domestic supply, it attracts foreign supply. The U.S. has been importing RD exclusively from Canada through the November–March period, with Asia-Pacific suppliers, most notably Singapore, largely absent from U.S. import flows since early Q4 2025. The current RIN premium is expected to change that, with both Canadian and Asia-Pacific producers well-positioned to benefit. As RINs remain applicable to imported RD qualifying under the RFS, a revival of Asia-Pacific export flows into the U.S. appears increasingly likely under the current economics.

Deferred Rulemaking on Imported Biofuels

One of the most consequential elements of the “Set 2” rule from a trade and market structure perspective is what was “not” finalized. The EPA had proposed provisions that would reduce the number of RINs generated for imported biofuels and biofuels produced from imported feedstocks. However, these provisions were not included in the final “Set 2” rule. In the interim period through 2027, imported RD is expected to continue generating full RIN credits, maintaining its economic attractiveness in the U.S. market under current rules.

Looking ahead to 2028, the anticipated rule change is likely to materially reduce the competitiveness of imported biofuels in the U.S. market, potentially reshoring demand back toward domestic producers. Market participants, both domestic and international, would be well advised to factor this policy trajectory into their medium-term planning.