Several years ago, renewable diesel (RD) margins enticed the oil industry to invest heavily in the sector. Today, in late June 2024, nearly all refiners are operating RD plants, most of which are under pressure from an earnings standpoint due to overcapacity.

Several first-quarter earnings calls cited economic headwinds, arising from lower renewable identification number (RIN) and low carbon fuel standard (LCFS) credit pricing, as being problematic for the industry.

Fastmarkets’ credit data shows that the first-quarter D4 RIN average was 58 cents per RIN. The LCFS credit average was $64 per ton.

The prices for these credits failed to improve during the second quarter, with RINs averaging 51 cents and LCFS credits $52. The market is unlikely to see improved earnings during the second quarter.

…