RINs production continued to expand in August, with D5 RINs showing a particularly strong 200% YoY surge in output, according to EPA.
D4 biodiesel RIN generation took a break MoM after climbing strongly since February, with August output down 3.74% MoM but still up 28.63% YoY. This left the August D4 RIN generation count at 283mn RINs, 9.73% of the 2.55mn D4 RINs mandated for the 2015 compliance year. So far this year just 80.05mn D4 RINs have been retired against mandated obligations, while RIN generation so far in 2015 has already breached 70% of the overall annual production requirement.
US biodiesel production typically accelerates towards year-end as the annual merry-go-round of blenders’ credit renewal discussions resumes. Argentina has also been a strong force in D4 RIN generation this year, supplying just under 72% of the 47.43mn gal of imported biodiesel.
If D4 RINs maintain their 2014 pace of monthly average production through the rest of this year, a surplus of 157mn RINs looks likely. Monthly production of 186mn RINs through the end of this year would be sufficient to keep the market in line with mandatory requirements.
D5 RIN generation soared by 10mn RINs in August to 15mn. Non-cellulosic ethanol contributed 12.35mn gal up 50% MoM, contributing 86% of the total RIN generation from advanced fuel. Renewable diesel contributed the rest of the RINs generated under the D5 category. D5 RIN generation of 60mn for 2015 to date still remains well below the pace needed to meet the annual target, with only around a quarter of the D5 retirement requirement currently supplied.
D6 corn ethanol RIN generation sat at 1.26bn gal in August, down by 1.7% MoM but up slightly YoY. Over 9.79 billion D6 RINs have been generated since the beginning of 2015, contributing 73.11% of the 2015 mandate.