ICE to launch D4, D5, D6 RIN futures contracts April 29

By Erin Voegele | April 24, 2013

IntercontinentalExchange (ICE), an operator of global markets and clearinghouse, has announced the introduction of new North American environmental futures contracts for three categories of renewable identification numbers (RINs), including biomass-based diesel D4 RINs, advanced biofuel D5 RINs and renewable fuel D6 RINs. Information released by ICE states that the new contracts, which will be cleared at ICE Clear Europe and are subject to completion of relevant regulatory processes, are scheduled to launch on April 29.

According to ICE Communications Director Brookly McLaughlin, the decision to introduce RIN contracts was based on discussions with ICE’s customers and in response to risk management needs they are facing. “The ability to hedge positions in a transparent and regulated futures market will enable market participants, such as those with exposure to renewable fuel compliance obligations, to better manage price moves in the market,” she said.

The RIN futures contracts are expected to benefit participants in the RIN market by providing an additional tool to help manage risk. “Recent activity in ethanol RIN prices especially highlights the potential for volatility in these contracts and the need to manage risk,” McLaughlin said.

McLaughlin also added that ICE is currently focused on D4, D5 and D6 RINs in light of feedback received from market participants. However, she said that ICE would consider additional contracts for D3 cellulosic biofuel and D7 cellulosic diesel in the future based on market demand and customer feedback.


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