Projections indicate 14.7 B D6 RINs to be generated in 2015

By Susanne Retka Schill | November 06, 2015

Based on the first nine months of the year and projecting RINs generation through the end of the year shows ample RINs and raises the question of how the U.S. EPA will make adjustments in the final rule. University of Illinois economist Nick Paulson updated his analysis of renewable identification numbers (RINs) generation in a FarmDocDaily post. 

Over 2 billion 2015 D4 RINs for renewable diesel were generated through September, which if the pace continues, will result in more than 2.7 billion D4 RINs for 2015. Extending the recent jump in D5, advanced biofuel, RINs through the end of the final quarter of 2015 projects total D5 generation at more than 120 million RINs. “These estimates suggest projected gross generation of non-cellulosic advanced RINs (D4 and D5 categories) at 2.85 billion RINs for 2015. This slightly exceeds the proposed non-cellulosic advanced mandate proposed for 2015 of 2.794 billion gallons (2.9 billion total advanced less 106 million cellulosic).

“These estimates suggest projected gross generation of non-cellulosic advanced RINs (D4 and D5 categories) at 2.85 billion RINs for 2015. This slightly exceeds the proposed non-cellulosic advanced mandate proposed for 2015 of 2.794 billion gallons (2.9 billion total advanced less 106 million cellulosic),” Paulson wrote.

Generation of D6 RINs has been relatively steading, averaging 1.224 billion gallons per months, “suggesting that nearly 14.7 billion will be generated in 2015,” which he noted, “will be well above the proposed mandate level of 13.4 billion gallons.” Paulson also discusses the impact of an error in export adjustments where EPA was using both denatured and undenatured ethanol, while only denatured would be eligible, first pointed out in a Renewable Fuels Association analysis.

“This results in an increased net generation value of D6 RINs of over 13.6 billion gallons, and would imply a building of D6 RIN stocks of over 350 million gallons if the proposed mandate level of 13.25 billion gallons holds,” Paulson wrote. “This creates additional controversy since EPA's justification in setting the proposed D6 mandate at 13.25 billion gallons was based on the use of an export figure that they have since admitted was incorrect.”

To view the complete analysis, click here.