Genscape suggests 75 million cellulosic RINs possible in 2014

By Susanne Retka Schill | October 01, 2014

Cellulosic ethanol production could contribute up to 9 million cellulosic D3 renewable identification numbers (RINs) in 2014, if active plants achieve full capacity in the last four months of the year, suggests a new white paper from Genscape. With recent rule changes in the renewable fuels standards (RFS) that took effect in August, biogas could contribute another 67.5 million D3 RINs, if full capacity is utilized for transportation fuel.

The current state of cellulosic biofuels is covered in the new white paper offered by Genscape Inc. The paper, “Outlook for 2014 Cellulosic Production and D3 RINs,” also says that if full capacities are reached in 2015, the active cellulosic ethanol facilities could generate 91 million RINs next year, while registered biogas facilities would have the capacity to produce up to an estimated 162 million RINs in 2015. With North American headquarters in Kentucky and European headquarters in The Netherlands, Genscape provides real-time data and intelligence for commodity and energy markets, and offers a quality assurance program and other services for RINs generators and obligated parties.

The 14-page white paper reviews the development of several cellulosic biofuel companies, including a couple of unsuccessful developers. It recounts the D3 RINs already generated and the producers expected to be generating RINs yet this year. The white paper also covers several international firms developing cellulosic ethanol processes, and notes that only Abengoa is registered with the U.S. EPA to generate D3 RINs.

Genscape authors, Susan Olson, vice president biofuels, and Sylvia Zhang, consultant, report 44,168 cellulosic RINs were generated through July, the last month available before publication of the white paper. EPA’s expanded definition of cellulosic fuels under its Renewable Fuel Pathways II is likely to expand that significantly yet this year. In effect Aug. 18, the new rule allows fuels derived predominantly from cellulosic materials (a minimum of 75 percent by dry mass) to generate cellulosic RINs.

The Pathways II ruling also clarifies that liquefied natural gas (LNG) and compressed natural gas (CNG) used in the transportation sector and produced from biogas from approved sources are cellulosic biofuels. “As of August 2014, there were 27 operational facilities utilizing biogas for transportation fuel and registered to generate RINs,” the paper says, adding that while these were once considered D5 RINs, they are now classified as D3.

Cellulosic biogas has the potential for rapid expansion. The authors report the Coalition for Renewable Natural Gas estimates the current production of transportation-specific LNG and CNG for 2014 would amount to 40 million ethanol-equivalent gallons per year from 38 facilities, and the coalition’s members have committed to increasing that capacity to 141 million by the end of the year.

The authors noted that the final determination of the 2014 RVO is expected any time, “The EPA discussed in the 2014 RVO proposal that cellulosic supply is a leading factor in arriving at a cellulosic biofuel standard. Current producers discussed in this white paper are apt to be the main suppliers of D3 RINs and their production levels are likely to influence the EPA’s final RVOs in 2015. If ramped up to capacity, the aforementioned cellulosic ethanol facilities have the capacity to produce up to 91 MMgy and biogas facilities have the capacity to produce 162 MMgy of ethanol equivalent gallons in 2015.”