Delta Air racks up RIN exposure amid waiver application: reports

London, (Quantum Commodity Intelligence) - US airline Delta Air has racked up a near $350 million liability for buying biofuel credits as the company lobbies lawmakers in a bid to ease its obligation to sell environmentally friendly fuels, news agency Reuters said, citing unreported filings and anonymous sources.

The airline, which has a refining arm called Monroe Energy, has an obligation to purchase Renewable Identification Numbers (RINs) to meet its targets to produce environmentally-friendly fuels under the Renewable Fuel Standard.

But Reuters reported that the company, which produces transport fuels, has not been purchasing the credits to comply with the obligation, hoping instead that lobbying the US administration to ease obligations would reduce its bill under so-called refinery waivers.

By the end of Q1, Reuters estimates its liability was $346 million.

Under the Environmental Protection Agency rules, small refineries can apply for an exemption to the rules forcing refiners to blend a certain amount of biofuels in the fuel they sell or buy RIN credits instead.

A rise in granting waivers under President Trump was controversial as it favoured refiners over corn and soybean producers in a farm versus fuel spat.

The price of RINS has risen 50% over the past five months as the price of corn and soybeans has soared due to a shortage of grain and oilseed, which will have forced up the short position, sources said.