RINs Drop to Three-Year Lows Following Latest EPA Waivers
Prices for Renewable Identification Numbers (RINs) tumbled to their lowest level since 2015 based on fears that the Environmental Protection Agency will grant more Renewable Fuel Standard waiver credits to refiners. The revised Renewable Fuel Standard [RFS2] requires U.S. refiners to blend predetermined volumes of biofuels, primarily corn ethanol, with refined fuels prior to retail. Every gallon of qualifying ethanol that is blended generates a Renewable Identification Number [RIN] that is then either submitted to the EPA to demonstrate partial compliance with the mandate or, if sufficient RINs have already been submitted, sold to other refiners. This past week the market saw initial drops on news the EPA granted a hardship waiver to Andeavor, a major refiner, exempting three of the company’s refineries from having to comply with the US blending mandate for 2016. The move by the EPA is not entirely unprecedented, and the waiver only applies to the smallest three of the company’s ten refineries, but granting the exemption on “hardship” grounds to a company that reported a net income of $1.5 billion last year gives reason to believe other waivers will be granted and RINs further devalued.
Tight Freight Market Continues to Garner Media Attention
Numerous reports and articles demonstrate tight capacity not only persists within the US trucking industry but is garnering growing media attention. The past week included headlines pointing towards the trucking industry’s continued struggle in a tight labor market. Commercial trucking and technical schools called this past winter one of the slowest recruitment and training winters of the past two decades despite the industry’s need for more drivers. Heavy-duty truck orders hit a record pace, perhaps indicating an imbalance with with the labor force. Orders more than doubled the number of trucks ordered a year ago as trucking companies scramble to add capacity to meet surging demand.
In Other News
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A truck sitting idle is a truck not making any revenue. Everyone in trucking knows that, and it is one of the issues that is becoming more prominent today with plenty of freight to move and not enough drivers to move it. The result is excess equipment sitting in yards unused for long stretches of time. COOP by Ryder is a digital asset-sharing platform for commercial vehicles. Using COOP, companies can list equipment they have available for renting and other commercial operators can find equipment to fill short-term needs.
Natural gas that is supercooled and shipped around the world may be the only big growth market for the fossil-fuels industry.
G7 Networks, a China-based company that provides fleet management and logistics technologies, has formed a joint venture with GLP and NIO Capital that is focused on developing “next-generation smart heavy-duty trucks powered by autonomous driving, new energy technologies and logistics big data.”
Enrollment in commercial-driving courses at the school dropped to its lowest point in about 15 years this winter, a signal that the industry’s attempts to sell workers on truck driving haven’t gained much traction.
Russian Energy Minister Alexander Novak said on Tuesday a joint organization for cooperation between OPEC and non-OPEC countries may be set up once the current deal on oil output curbs expires at the end of this year.
Clean Energy Fuels Corp. has introduced ZERO NOW, a fueling solution offering renewable natural gas (RNG) for $1 per gallon for a year in California.
Trucking companies are ordering big rigs at a record pace and it’s still not fast enough to meet shipping demand. U.S. fleet owners in the first quarter nearly doubled their orders from a year ago.
Prices for Renewable Identification Numbers (RINs) tumbled to their lowest level since 2015 Wednesday on fears the Environmental Protection Agency will grant more Renewable Fuel Standard waiver credits to refiners. This past week the market saw initial drops on news the EPA granted a hardship waiver to Andeavor, a major refiner, exempting three of the company’s refineries from having to comply with the US blending mandate for 2016.
Nikola will be returning the $1500 deposit the company initially required to hold a reservation slot and future reservations for the Nikola One or Nikola Two will not require reservations. Nikola has hinted for weeks that the company has secured a large tractor order that will aid the company in building out its network of hydrogen stations, including the installation of 28 stations along the fleet’s routes. The company expects to be able to make a formal announcement in the coming weeks.
Shippers are in competition with one another to book an available truck at a reasonable rate. Being on top of a carrier’s preferred list is paramount and being near the top of a carrier’s list involves becoming a “shipper of choice” according to many market leaders, including Ardent Mills, one of the largest US flour suppliers.