August D6 RINS Down 4.3%

STREATOR, Ill. (DTN) -- The Environmental Protection Agency reported 1.217 billion D6 Renewable Identification Numbers were generated in August, down 4.3% from the 1.268 billion D6 RINs generated in July.

For the first eight months of the year, 9.522 billion D6 RINs were generated.

Domestic production and imports generating D6 RINs, which is primarily corn-based ethanol, was 1.20 billion gallons in August, down from 1.255 billion in July. Production for the first eight months totaled 9.429 billion gallons.

D6 RINs are equal to one gallon of renewable fuel produced or imported.

Biomass-based diesel D4 category output from domestic production and imports in August was 142.490 million gallons, down from the 182.608 million gallons in July. For the year so far, a total of 1.106 billion gallons were produced. Qualifying renewables under the D4 category include renewable diesel and biodiesel production. Each gallon is worth 1.5 D4 RINs. Total RINs generated in August were 215.686 million, down from 281.445 million in July. Total D4 RINs generated in the first eight months of 2014 were 1.707 billion.

Advanced biofuel qualifying for D5 RIN generation in August was 4.171 million gallons, down from 14.036 million gallons in July. For the year, 107.797 million D5 gallons were produced. Total D5 RINs generated for August was 4.571 million compared to 15.537 million the month prior. For the first eight months, 115.241 million D6 RINs were generated.

In the 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 surged in August as EPA reported 3.492 million gallons of cellulosic biofuel under the D3 category were produced following 4,156 gallons output in July, generating 3.492 million D3 RINs for the month. A total of 3.554 million gallons of cellulosic biofuel were produced in the first eight months of 2014, generating 3.569 million D3 RINs.

There were 5,532 gallons of cellulosic diesel produced in August which fall under the D7 nested category, netting 5,532 RINs. Total D7 gallons produced in 2014 are 14,554 generating 18,202 D7 RINs.

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

The RFS mandate is scheduled to increase each year until 2022, but the EPA proposed reducing the mandate for 2014 from the statute requirement of 18.1 billion gallons to a 15.0 to 15.52 billion gallons range.

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 and 30 million gallons and proposed a range between 2.0 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. However, media reports last week showed the EPA likely increase the D4 volume for this year.

The EPA issued proposed volumes for 2014 on Nov. 15, 2013. This year's mandate was submitted to the White House Office of Management and Budget Aug. 22, making the final volumes publication more than 10 months late by statute.

(BM/AG)

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