Market Update: EPA released the 2014-2017 Final Rule for the Biomass-based diesel (D4) Renewable Volume Obligations (RVOs) on Nov. 30th. The Final Rule has the 2014 D4 RVO at 1.63 billion actual gallons, 2015 D4 RVO at 1.73 bil gals, 2016 at 1.9 bil gals, & 2017 at 2 bil gals (see pg. 18). It's also important to note that biomass-based diesel can and has generated in the past significant volumes of D5 and D6 RINs (see pg. 15), which can be used to fill Advanced biofuel and Renewable fuel RVOs (see pg. 19).
Last week Obama signed the tax extenders package into law, reinstating--for the fourth time--the $1/gal biodiesel and renewable diesel blender's tax credit for 2015 and extending it into 2016 as well. The language to switch the tax credit from the blender to the domestic producer was not included in this new legislation, but may appear in the future. As a result, over $120 million U.S. taxpayer dollars will be subsidized to foreign biomass-based diesel producers for 2015.
Analysis: 3.599 billion pounds of soybean oil was used to produce biodiesel from Jan- Sept of 2015, with 390 mil lbs used in September. Soybean oil's share of all inputs to biodiesel production is up only .81% for 2015 through Sept to 45.92%. Corn oil used to produce biodiesel decreased in Sept to 92 mil lbs, bringing 2015 through Sept numbers to 753 mil lbs.
PRX estimates US biomass-based diesel (biodiesel & renewable diesel) production for 2015 at 1.43 billion gallons, with actual production decreasing in Sept to 109.6 MMgal and YTD data at 1050 MMgal. The EIA's Dec-STEO (solely biodiesel) has 2015 production estimated down to 1.334 billion gallons with actual monthly data decreasing in Sept to 127.26 MMgal, while forecasting 2016 production increasing to 1.637 billion gallons. EPA D4 Domestic RIN generation volume data for Jan to Nov of 2015 is at 1.294 billion gals (EPA D4 data understates total domestic biodiesel and renewable diesel production because some is generated as D5 RINs). PRX estimates Jan to Nov 2015 US renewable diesel production at 159 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 1.713 billion gallons, with actual EPA data from Jan to Nov at 1.556 billion gallons and EIA data for November at 171.36 MMgal. The EIA's Dec-STEO has 2015 biodiesel and imported renewable diesel consumption forecasted up slightly at 1.748 billion gallons for 2015. Also, the Dec-STEO has increased 2016 forecasted consumption to 2.36 billion gallons, which is above PRX's forecast of 2.2 billion gallons of biomass-based diesel.
PRX estimates biomass-based diesel imports of 451 MMgal for 2015, with actual data from EIA's PSM for Sept at 52 MMgal and Jan to Sept 2015 at 361.6 MMgal-of which Neste Oil's plant in Singapore sent 138.4 MMgal, CARBIO's Alternate Biomass Tracking program has increased Argentina's biodiesel imports to 102.7 MMgal, Indonesia is at 64.5 MMgal, and Canada 43.7 MMgal. PRX estimates US biodiesel exports in 2015 will be 93.1 MMgal, with actual EIA PSM data in Sept at 8.4 MMgal and from Jan to Sept of 2015 showing 72.4 MMgal of biodiesel exported.
Ryan Ruikka
Energy Analyst
The ProExporter Network
114 S. Main St. Suite 100
Chelsea, MI 48118
Off: 734-475-0454
Fax:734-475-0452
| 
