D6 RINs Surge in December

STREATOR, Ill. (DTN) -- The Environmental Protection Agency reported 1.308 billion D6 Renewable Identification Numbers were generated in December, up 12.5% from the 1.164 billion D6 RINs generated in November. There were 10.699 billion D6 RINs generated in 2014.

RINs are credits used by obligated parties -- refiners, blenders and importers -- to show compliance in fulfilling their annual Renewable Volume Obligation under the Renewable Fuel Standard.

There are several nested categories for RINs designating the renewable fuel, with D6 RINs, the most common, primarily generated by corn-based ethanol.

Domestic production and imports generating D6 RINs totaled 1.293 billion gallons in December, up from 1.147 billion in November, with production for 2014 at 12.915 billion gallons.

D4 RIN generation in December totaled 308.375 million, up from 227.834 million in November, with 2.691 billion D4 RINs generated in 2014. Qualifying renewables under the D4 category include renewable diesel and biodiesel production, with each gallon worth 1.5 D4 RINs.

In December, domestic production and imports of biomass-based diesel was 201.205 million gallons, up from the 148.547 million gallons in November. For the year, a total of 1.751 billion gallons were produced.

Advanced biofuel qualifying for D5 RIN generation in December was 11.236 million gallons, up from 3.582 million gallons in November. For the year, 131.082 million D5 gallons were produced. Total D5 RINs generated for December was 12.466 million compared to 4.631 million the month prior. For the year, 136.744 million D5 RINs were generated.

In the D5 advanced renewable fuel category, one gallon of sugar-based ethanol is equivalent to one D5 RIN, while one gallon of biodiesel, which also qualifies as an advanced biofuel, is equal to 1.5 D5 RINs. Other advanced biofuels included cellulosic biofuel and cellulosic diesel.

Cellulosic biofuel production in December was reported at 8.533 million gallons of cellulosic biofuel under the D3 category following 6.280 million gallons output in November, generating 8.533 million D3 RINs for the month. A total of 32.970 million gallons of cellulosic biofuel were produced in 2014, generating 32.985 million D3 RINs.

There were no gallons of cellulosic diesel produced in December which fall under the D7 nested category, netting zero RINs. Total D7 gallons produced in 2014 were 55,657 generating 59,305 D7 RINs.

The language expanding the RFS in 2007, found in the Energy Independence and Security Act, increases the demand mandate for renewable fuels each year through 2022. However, the Environmental Protection Agency, the administrator of the RFS, proposed but never finalized the RVO for 2014.

Facing "blend wall" issues in expanding the market for ethanol within the gasoline pool, in November 2013 the EPA proposed a reduction in the mandate for 2014 from the statute requirement of 18.1 billion gallons to a 15.0 to 15.52 billion gallons range. After heavy lobbying and a lengthy review process of public comments on their proposal, EPA said last November it would not mandate a RVO for 2014 that year, instead planning to address 2014, 2015 and 2016 RVOs this year. By statute, the RVO must be finalized by Nov. 30 of the prior year.

The largest proposed cut in the 2014 RFS was for the D6 renewable fuel nested category from 14.4 billion gallons stated by statute to 13.0 billion gallons, which would be the first reduction in this category.

The EPA also proposed an adjustment to this year's volume requirement for D3 cellulosic biofuel from 17 million gallons to between 8 million and 30 million gallons. EPA proposed a range between 2.0 billion and 2.51 billion gallons for D5 advanced biofuels compared with statue volume of 2.2 billion gallons.

The D5 nested category includes D3 and D4 blending volume, with D4 representing biomass-based diesel. The EPA proposal left unchanged at 1.28 billion gallons this year's D4 volume mandate, which is above the statute's 1.0 billion gallon requirement.

(BM/AG)

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