D3 Cellulosic Biofuel RIN Price Creeps Higher

The gold line is the market price of the D3 cellulosic biofuel Renewable Identification Number (RIN), called Pd3, which has has gone up from $2.39 to $2.54 so far this year.

The black line is Hoekstra’s theoretical price, called D3T, which has fallen from $3.32 to $2.96 so far this year.

The dashed lines show our original 2026 forecast as an expected range for the year, forecasting a year end price between $2.71 and $3.02.

Unlike the D4 RIN, the conflict in Iran has had little impact on either the theoretical or the market D3 RIN price because it had little impact on the prices of either U.S. natural gas or renewable natural gas which are the two primary commodity prices that affect the theoretical D3 RIN value. 

We do not change our annual RIN price forecasts during the year.  Instead, we continually analyze how the market prices compare to the theoretical prices and to the year’s original forecast ranges. The market price of the D3 RIN is far below the theoretical price and near the low of the forecast range. 

We believe the current D3 RIN price is not a true market price.  Instead, it is a price that assumes, with 100% probability, that EPA will waive the cellulosic mandates or cap the D3 RIN price whenever a shortfall in cellulosic biofuel production is foreseen, which is how things happened before 2023.

That is one possible scenario.  But to assume that will happen with certainty in the future is risky. 

If you instead assume a non-zero probability EPA will let the D3 RIN float to a true market price, as it is designed to do, then you get a higher RIN price.  

The theoretical price, D3T, is our estimate of what it would be if it were allowed to float. 

Accordingly, our outlook is that the D3 RIN will continue to increase in 2026.

Our outlook is that the D3 RIN will continue to increase in 2026.

On April 20, 2026, Hoekstra Trading released the 2nd quarterly issue of the “Hoekstra RIN Price Outlook”. Why not have a look under the hood?