July saw D4 and D6 RIN generation reaching its highest level so far this year, according to the EPA. 2015 production of D6 RINs, generated by corn ethanol plants, is sitting at 1.2 billion, up 0.4% MoM but staying in line with July 2014 levels. Over 8 billion D6 RINs have been generated since the beginning of 2015. If RIN generation continues at the average rate of 1.2 billion RINs/month, there will potentially be a surplus of 1.24million RINs over 2015 Mandate requirements which were revised in May this year.
D4 RINs, generated through biodiesel production are also up 4.26% YoY and 8.5% MoM in July, leaving a 2015 RIN count at 294 million so far. Continuing at the annual average rate would see a surplus of 57 million D4 RINs by the end of the year. D4 and D6 RIN generation peaks on average in July during the middle of the US driving season, when gasoline and ethanol demand are at their highest, and at the end of the year in December when blenders are looking to make up mandate requirements.
After D5 RINs generated from advanced biofuels jumped to over 15 million in April, generation has been sitting flat at a relative low level of nearly 5 million RINs per month since then. In July, 5.37 million D5 RINs were generated, down 65.44% YoY. Through the first seven months of this year, 44 million D5 RINs have been generated. 200 million D5 RIN’s would need to be generated by the end of the year to reach the most recent 2015 mandate requirements, which is an overly-ambitious task given the current rate of production.