Market Update: EPA is likely to release the 2014-2017 Final Rule for the Biomass-based diesel (D4) Renewable Volume Obligations (RVOs) by Nov. 30th. PRX believes, using data that EPA will likely use and making some calculation assumptions of our own that the Final Rule for the 2014 D4 RVO will be 1.62 billion actual gallons, 2015 D4 RVO will be 1.73 bil gals, 2016 will be 1.83 bil gals, & 2017 will be 1.93 bil gals. It's also important to note that biomass-based diesel can and has generated in the past significant volumes of D5 and D6 RINs, which can be used to fill Advanced biofuel and Renewable fuel RVOs (see page 15 for a breakdown of historical RIN generation by RIN type).
Analysis: 3.209 billion pounds of soybean oil was used to produce biodiesel in the first three quarters of 2015, with 464 mil lbs used in August. Soybean oil's share of all inputs to biodiesel production is up 1.07% for 2015 through August to 46.18%. Corn oil used to produce biodiesel increased in August to 108 mil lbs, bringing 2015 through August numbers to 661 mil lbs.
PRX estimates US biomass-based diesel (biodiesel & renewable diesel) production for 2015 at 1.466 billion gallons, with actual production increasing in August to 146.1 MMgal and YTD data at 941 MMgal. The EIA's Nov-STEO (solely biodiesel) has 2015 production estimated down to 1.39 billion gallons with actual monthly data increasing in Oct. to 141.9 MMgal, while still forecasting 2016 production at 1.504 billion gallons. EPA D4 Domestic RIN generation volume data for Jan to Oct of 2015 is at 1.185 billion gals (EPA D4 data understates total domestic biodiesel and renewable diesel production because some is generated as D5 RINs). PRX estimates Jan to Oct 2015 US renewable diesel production at 147 MMgal and is continuing to be lower than expected because REG's Geismar facility is down until late January 2016 from a second fire.
PRX estimates US biomass-based diesel consumption for 2015 at 1.725 billion gallons, with actual EPA data from Jan to Oct at 1.412 billion gallons and EIA data for October at 184.9 MMgal. The EIA's Nov-STEO has 2015 biodiesel and imported renewable diesel consumption forecasted down at 1.742 billion gallons for 2015, without including PRX's estimated 171 MMgal of domestically produced renewable diesel that is likely to be consumed. Also, the Nov-STEO still has 2016 consumption forecasted at 2.043 billion gallons (not counting US renewable diesel consumed), which is above PRX's forecast of 1.92 billion gallons of biomass-based diesel.
PRX estimates biomass-based diesel imports of 411 MMgal for 2015, with actual data from EIA's PSM for Jan to August 2015 at 309.6 MMgal--of which Neste Oil's plant in Singapore sent 125.3 MMgal, Argentina was high again in August at 19.9 MMgal bringing its total to 74.9 MMgal, Indonesia 57.3 MMgal, and Canada 41.7 MMgal. PRX estimates US biodiesel exports in 2015 at 91.6 MMgal, with actual EIA PSM data from Jan to August of 2015 showing 64 MMgal of biodiesel exported (exports in August were 11.55 MMgal).
Ryan Ruikka
Energy Analyst
The ProExporter Network
114 S. Main St. Suite 100
Chelsea, MI 48118
Off: 734-475-0454
Fax:734-475-0452
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