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EPA to Exempt 1.76 Billion Renewable Identification Numbers for 2025 Compliance Year

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The Environmental Protection Agency said on Monday that it is exempting 1.76 billion renewable identification numbers for 29 small refineries for the 2025 compliance year, largely in line with expectations of 1.8 billion RINs in the weeks leading up to the decision.

In addition, the EPA will propose reallocating 100% of the difference between projected and actual exempted volumes for 2025 small refinery exemptions to the 2026 & 2027 renewable volume obligations.

In this final rule, the EPA is extending the 2025 renewable fuels standard compliance reporting deadline to Oct. 1, 2026, to allow obligated parties and market participants additional time to comply with the 2025 RFS compliance reporting deadline, particularly in light of the recent issuance of Small Refinery Exemption decisions for the 2025 compliance year, the EPA said.

Zander Capozzola, a principal consultant at Argus Media Consulting, said the 100% reallocation proposal exceeds market expectations of 70% reallocation into 2027.

"If EPA reallocates at 100% and spreads the burden across 2026 and 2027, this will have a near-term bullish impact on RIN prices, while leaving 2027 fundamentals acutely bullish," Capozzola told.

He noted that by reallocating to 2026 and 2027, the EPA provides greater market certainty for the remainder of 2026. "Put simply, no one was expecting 100% reallocation today," Capozzola said.

What else is happening in Commodities?

Commodities

US Natural Gas Prices Rise for 3rd Straight Week on Bullish Storage, Weather Momentum

US natural gas prices ended their third consecutive week in the green, amid a bullish storage build and weather-related momentum, which kept prices elevated.In the futures market, the Nymex front-month contract ended the week at $2.88 per million British thermal units on Friday, up from $2.76/MMBtu on Aug. 21.Natural gas spot prices declined to $2.81/MMBtu on Wednesday, down $0.13/MMBtu, according to the US Energy Information Administration's Weekly Gas Storage Supplement, released on Thursday.This comes amid varying regional temperatures across the country. Above-average temperatures in Texas and the Southeast were largely offset by cooler weather across the Mid-Continent and Northeast regions, leading total demand to decline by 3.6 billion cubic feet per day, according to data from S&P Global.Total natural gas supplies also declined by 0.9 Bcf/d, or 1%, during the week, along with Canadian imports by 0.4 Bcf/d, or 8%, while gas production dropped 0.4 Bcf/d, or less than 1%.US LNG export feedgas flows remained subdued, hovering around 17 Bcf/d for much of the week, before spiking to 19.54 Bcf/d on Thursday, significantly ahead of the 30-day moving average of 17.97 Bcf, according to the Bloomberg LNG Feedgas Model.The net injection into storage for the week ended Aug. 21 was 15 Bcf, modestly below last week's 16 Bcf build, bringing total gas inventories to 3,184 Bcf, according to weekly EIA inventory data.It came in below forecasts for a 19 Bcf injection, the prior year's 18 Bcf, and the five-year average for this period at 33 Bcf, according to data compiled by Investing.com, making it a fairly bullish storage build.Regional storage figures were mixed, with the East, Midwest and Mountain regions reporting net injections of 19 Bcf, 18 Bcf and 1 Bcf, respectively. Inventories across the East and Midwest were 3% and 5% above their respective year-ago levels, while the Mountain region was 6% lower.Meanwhile, South Central, Pacific and the Salt regions reported net withdrawals of 19 Bcf, 3 Bcf and 20 Bcf, respectively, during the week.At 3,184 Bcf, total US working gas in storage was 30 Bcf, or 1% below the same period last year, but 167 Bcf, or 6% above the five-year average for this period.Pinebrook Energy Advisors noted that inventories were "still sitting at healthy levels," while domestic output continued to show signs of growth, capping any significant upside momentum in the near-term, or into the upcoming winter season.Meanwhile, the US gas rig count was up by five, from 127 to 132 in the week ending Aug. 28, according to data from Baker Hughes (BKR) released Friday. That compared with 119 gas rigs in operation a year earlier.The consolidated North American rig count, a key early indicator of future production levels, dropped by five to 799 from 804 the previous week.A total of 31 LNG carriers departed US ports during the week, down three from the prior week, with a total combined capacity of 117 Bcf, down 12 Bcf from last week.In international markets, European TTF gas prices averaged $22.70/MMBtu for the week ended Aug. 26, $1.59/MMBtu above the prior week. Meanwhile, the Japan-Korea Marker averaged $23.07/MMBtu, about $1.47/MMBtu above the prior week.

$BKR
Commodities

Market Chatter: Pentagon Weighs Venezuela Oil Partnership Covering 17 Fields

The US Department of Defense is weighing a partnership with Venezuelan energy investor Alejandro Betancourt that could give the US government a major stake in Venezuela's oil reserves, Bloomberg reported Friday, citing people familiar with the matter.The talks cover up to 17 oil fields across Venezuela's main petroleum basins, including Junin in the Orinoco heavy-oil region and fields around Lake Maracaibo, people familiar with the matter said. One of the potential arrangements under negotiations would see the US take a 100-year lease on the fields, Bloomberg reported.According to the report, the Pentagon's Office of Strategic Capital is under consideration to oversee the investment, and could also help address supply-chain gaps. The Biden administration established the OSC in 2022 to support the development of critical technologies.In an emailed response to, the Pentagon pushed back on the characterization of the potential deal.The Office of Strategic Capital does not take equity stakes in private companies and can only provide loans, loan guarantees or technical assistance under its statutory authority, Chief Pentagon Spokesman Sean Parnell toldin an emailed response.He noted that the OSC's capital assistance purview also included transaction structuring to develop and finance investments."Before any capital assistance is provided or loan is disbursed, OSC conducts extensive due diligence and comprehensive legal review of potential transactions to fulfill all applicable legal and regulatory requirements," Pentagon Press Secretary Kingsley Wilson told.She added that the Department cannot comment on the specific commercial, contractual, financial, technical, or legal considerations raised during the conditional loan commitment process to protect the integrity of that process and the proprietary, non-public information of actual or potential borrowers.Deputy Pentagon Press Secretary Jacob Bliss toldthat the OSC operates under a multi-layered legal and regulatory framework and complies with all applicable laws.The White House and Venezuelan oil producer North American Blue Energy, which is controlled by Betancourt, did not immediately reply to' requests for comment.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Commodities

Weekly RIN Prices Drop Sharply on Expectations of Higher Small Refinery Exemptions

Renewable Identification Number markets dropped sharply in the Aug. 20-Aug. 27 window, according to the EcoEngineers' Carbon Market Snapshot.In the current year, D4 2026, biomass-based diesel RIN prices traded at $1.95 per RIN on Thursday, down from $2.30/RIN a week ago.D5 2026 advanced biofuel RINs were trading around $1.94/RIN, below $2.33/RIN last week.D6 2026 corn-based ethanol RIN prices finished trading on Thursday at $1.83/RIN, down from $2.27/RIN a week ago.Matt Gammans, assistant professor of agricultural policy at North Dakota State University, toldthat the price drop reflects a change in expectations.He said the market now thinks the Environmental Protection Agency may grant substantially more 2025 small refinery exemptions than previously expected.Gammans said that two things shifted that expectation this week. First, the EPA's decision to push back the Sep. 1 compliance deadline for 2025 obligations removed the forced buying that would otherwise have happened in the last week of August and was read as a signal of broader relief.Second, reporting citing non-public briefings indicated that exemptions could reach 1.8 billion RINs, compared with a market assumption closer to 1.3 billion.He explained that an exemption erases a refiner's obligation, so the RINs that would have been retired remain on the market."This means more RINs available for obligated refiners, which lowers prices. Because obligated refineries are affected by all components of the mandate (D4, D5, D6), an exemption reduces demand for all categories," Gammans said.