Posts by Hoekstra Trading LLC

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…

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 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…

Read other blogs in this series: Part 1 – Two Camps Part 2 – How is the RIN Tax Different From a Sales Tax? Part 3 – The RIN Tax Passes Through Just Like a Sales Tax Part 4 – Will the Litigation Ever End? Figure 1 shows refiners buying crude oil and making gasoline…

See other episodes in this series: A Renewable Identification Number (RIN) is a tax and a subsidy that forces renewables into fuels. There is a long-running controversy over how the RIN tax affects the profits of refiners.  One camp, which we call Camp A, says the RIN tax is an extra cost that hurts the…

Get the Attractor spreadsheet Read other posts in this series: All Eyes on Renewable Diesel Margins: Summarizing this 5-week blog series and its companion series, Upside Down on RBN Energy (watch for part 3 of that soon): In April, 2021: In April, 2023: The subsidies went down by $2.30 (!!) Why did the subsidy go…

Get the Attractor spreadsheet The headline story in this quarter’s renewable diesel producer’s earnings reports was again renewable diesel (RD) margin. The effects of feedstock prices, lags in supply chains, and delayed plant startup schedules were again discussed in depth. Read other posts in this series: All Eyes on Renewable Diesel Margins: The humongous $1.70…

Get the Attractor spreadsheet Read other posts in this series: All Eyes on Renewable Diesel Margins: The starting point for our analysis of renewable diesel (RD) margins is the cost to produce RD in a plant feeding soybean oil. In Part 2 of this series, we showed that cost was $5.30 per gallon in April,…

GET THE ATTRACTOR SPREADSHEET Read other posts in this series: As the renewable diesel (RD) business has grown, its profit margins have come under scrutiny. In analyzing RD margins, our starting point is the cost of RD production. For a representative renewable diesel plant feeding soybean oil and selling its RD in California in April…

GET THE ATTRACTOR SPREADSHEET Read other posts in this series: Consider a business that makes hydrogenated renewable diesel fuel from soybean oil and sells if for $1.90/gallon. To make the gallon requires purchasing $4.30 worth of soybean oil as feedstock. This business has upside-down economics. It loses $2.40/gallon before even factoring in production costs or…