Posts by Hoekstra Trading LLC
The New Game of Renewable Fuels Part 6 – Playing By The Rules
A renewable identification number (RIN) is a tax, a subsidy, a mandate, a financial asset that can be banked, borrowed, and traded, a contingent claim, and part of a four-component nested structure, all packed into one instrument. That’s why we call it the most complex environmental credit ever invented. Read the other blogs in this…
Read MoreThe New Game of Renewable Fuels Part 5 – Changing Factors
In this blog series we are explaining how the invention of the renewable identification number (RIN) environmental credit in 2007 was a game changing development in the fuels industry. The RIN is more than just an environmental credit. It is a cleverly designed financial instrument. In fact, we claim it changed the fuels game in…
Read MoreThe New Game of Renewable Fuels Part 4 – Rewind to June 2023, On The Brink of a RIN Price Collapse
In this blog series, we are explaining how the invention of the Renewable Identification Number (RIN) environmental credit in 2007 was a game-changing development in the fuels industry. The RIN is a clever, sophisticated financial instrument – in fact, we have made the bold claim that the RIN alters fuels economics in ways so unfamiliar…
Read MoreWhy The Gap Between the D4T Theoretical Price and D4 RIN Market Price?
I have been asked how the D4T theoretical price (yellow line in Figure 1) is calculated and why it is lower than the D4 Renewable Identification Number (RIN) market price (orange line). D4T is calculated in a spreadsheet called ATTRACTOR using the model derived in this article. In the past year, the D4 RIN market…
Read MoreThe New Game of Renewable Fuels Part 3 – WHY Are The RFS Mandates Nested?
The spectacular increase in the price of the D6 Renewable Identification Number (RIN) in 2013 was one of the most extreme moves in the history of major commodity trading. Read the other blogs in this series, The New Game of Renewable Fuels: RINs are the environmental credits used to certify compliance with the U.S. federal…
Read MoreThe New Game of Renewable Fuels Part 2 – Principles 1, 2, and 3
The RIN is a game-changing environmental credit that is a tax, a subsidy, and a mandate, all at once. Read the other blogs in this series, The New Game of Renewable Fuels: 1) The RIN is a tax . . . . . . that is levied on petroleum fuels supplied by refiners and importers.…
Read MoreThe New Game of Renewable Fuels – The Rules Of The Game
The Renewable Fuels Standard (RFS) caused many businesses to be thrust involuntarily into a new game. The game came with a new kind of environmental credit called the Renewable Identification Number (RIN), which has rules different than any other environmental credit. Read the other blogs in this series, The New Game of Renewable Fuels: People…
Read MoreMid-year ATTRACTOR Update – D4 RIN market price diverges from D4T Theoretical Price, plus “Critique of the C-Suites”
The Attractor spreadsheet (chart below) shows the 2024-vintage D4 RIN market price (gold points) and the “D4T” theoretical value (white line), updated through last Friday. After converging near the end of 2023, the D4 RIN market price has again diverged from the Hoekstra D4T theoretical price in the first half of 2024. As of June…
Read MoreRevisiting RIN Cost Pass-through Part 4 – Will the Litigation Ever End?
See other episodes in this series: This four part blog series focuses on the flow of streams (white), RINs (blue), and dollars (green) depicted in Figure 1 below and has addressed 2 questions about it: The answer to the first question was given in Part 3 last week. There is no fundamental difference because the…
Read MoreRevisiting RIN Cost Pass-through Part 3 – The RIN Tax Does Not Affect A Refiner’s Profits
Read other blogs in this series: Last week’s Part 2 of this series posed this question: In terms of the pass-through question, how is the RIN tax situation (Figure 1) different than when a sales tax is imposed on finished gasoline? Figure 1 Flow of streams (white), RINs (blue) and dollars (green) in the market…
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