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RIN Update: 2014 Carry In and EPA's Proposed Rulemaking

02 January 2014

US - The EPA released proposed rules for the 2014 Renewable Fuel Standard (RFS) in November. The rules reduce both the total advanced and renewable mandate components, not only below the statutory levels for 2014 but also below the levels set for 2013.

Previous posts from Irwin and Good and Meyer and Johansson have analyzed the impact of the reduced mandate volumes in the 2014 proposed rule.

This post returns to the issue of RIN stocks, providing an update to RIN generation data for 2013 and carryover estimates for 2014, and discussing the implications of the proposed rules on 2014 RIN stock levels.

RIN Generation in 2013

Figure 1 uses data from EPA's EMTS to plot monthly D4 RIN generation relative to implied mandate needs (annual mandate/12) from July 2010 through November 2013.

RIN generation has exceeded implied mandate needs for 2013 since March, following a pattern similar to that experienced under similar circumstances in 2011 as blender's provided incentives to increase biodiesel production to take advantage of a potentially expiring tax credit.

Assuming a D4 RIN generation level of 260 million gallons for December, total D4 RIN generation is estimated to exceed 2.65 billion gallons in 2013.

Generation of D5 RINs peaked during the summer, averaging 70 million gallons per month from June through September.

D5 RIN generation fell to 35 million gallons in October and just 23 million gallons in November.

Assuming 30 million gallons are generated in December, total D5 RIN generation for 2013 is projected at just under 568 million gallons.

Further Reading

You can view the full report by clicking here.

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