Intercontinental Exchange announces record growth in renewable fuel contracts

Intercontinental Exchange Inc., a global provider of data, technology, and market infrastructure, announced March 3 rapid growth in its U.S. renewable identification numbers (RINs) and European biofuels derivatives.

ICE offers cash settled RINs futures, including the D6 and D4 (OPIS) RINs to hedge risk in ethanol and biodiesel RINs.

A record volume of RINs traded on ICE in 2021, equivalent to almost 600 million RINs. This February, approximately 194 million RINs traded, a record high for a single month, with open interest hitting a record equivalent to over 112 million RINs. A single day volume record was set Feb. 23 with the equivalent of 35 million RINs traded. The number of participants trading RINs has doubled versus 2020 as participants increasingly seek to manage their exposure to volatility in the price of RINs.

“As RIN prices have increased, compliance with the Renewable Fuel Standard has become more expensive,” said Jeff Barbuto, global head of oil markets at ICE. “Volume and open interest are building as the market recognizes it can manage RIN price exposure through RIN futures.”

ICE’s European biodiesel and ethanol derivatives traded 33,015 contracts last month, with open interest reaching 41,101 contracts. Trading activity is centered around ICE’s (Argus) FAME, RME and UCOME biodiesel futures, and ICE’s (Platts) ethanol future.

In December 2020, ICE launched the Argus UCOME FOB ARA Range (RED Compliant) vs Low Sulphur Gasoil 1st Line future, the first waste-based biofuel derivative launched by ICE, which is used to hedge Argus’ spot assessment of UCOME. Last month, this contract traded the equivalent of approximately 261,000 metric tons (more than 78 million gallons) of UCOME, while open interest grew to 3,650 contracts.

The European biodiesel sector is traded predominantly at a differential to the global refined benchmark ICE low sulfur gasoil, which is often relied on as a proxy hedge due to its deeper liquidity further out the curve. ICE low sulfur gasoil holds open interest out to January 2026.

In 2021, ICE traded a record 18 billion tons of carbon allowances, equivalent to an estimated $1 trillion in notional value and equal to over half the world’s estimated total annual energy-related emissions footprint.