CME Group announces futures contracts for RINs

By CME Group | April 26, 2013

CME Group, the world's leading and most diverse derivatives marketplace, has announced the launch of nine new futures contracts for renewable identification numbers (RINs). These contracts will be listed with, and subject to, the rules and regulations of NYMEX.

"With the recent increase in volatility in RINs prices, we've seen strong interest from our customers and other market participants for cost-effective ways to manage their risk in this market," said Gary Morsches, managing director of global energy, at CME Group. "As the most actively traded marketplace for the benchmark RBOB Gasoline and ULSD Diesel contracts, our new RINs futures contracts will be a strong complement to our existing suite of products and will allow our customers to take advantage of reduced capital requirements and margin efficiencies."

The new RINs contracts will be available for trading starting May 13 and will allow customers to hedge risk in three types of renewable fuels:

D4 Biodiesel

D5 Advanced Biofuel

D6 Ethanol

These contracts will be financially-settled based on Argus Media's prices for RINs, which are the most widely-used indexes for this market. They will provide a useful hedge for the price risk associated with the U.S. EPA’s renewable fuel standard (RFS). The EPA has created a credit trading system for compliance with RFS2 for various types of renewable fuels based on units called RINs.

These contracts will be available on the CME Globex electronic trading platform, for over-the-counter (OTC) clearing through CME ClearPort and open outcry on the trading floor in New York, beginning with the May 2013 contract month.