October 2017 Biomass-based diesel production up 5.5% from September on stronger domestic production

According to the EPA’s latest EMTS data, 227.475 million biomass-based diesel gallons were produced.  This is the 10^thhighest monthly production rate on record and the fifth highest rate this year. Production increased 5.52% from September and was up 1.2% from October of 2016. Year to date, 2.060 billion D4 gallons have been produced, 42.91 million more than was produced over the same 2016-time frame. The production rate through October has surpassed the 2.0 billion gallon D4 mandate.

If the industry were to continue to produce/blend at the rate seen in October, there would be 2.52 billion gallons and 3.86 billion RINs consumed.  This would bring production close to the pace necessary to satisfy both the D4 and unspecified portion of the D5 mandate without having to use banked RINs.

105% of the D4 mandate (based on RINs) is satisfied. However, only 18% of the unspecified portion of the D5 mandate has been filled, up from 17% last month. With the D4 mandate satisfied, D4 production will remain necessary to fill the gap in the overall Advanced biofuel mandate.  An additional 249.4 million gallons per month could be necessary to fulfill the unspecified portion of the D5 mandate (this amount is up from 243.4 million last month). This holds true only if the EPA’s estimated gasoline and diesel consumption figures prove to be on target.

The D4 category is a combination of both biodiesel and renewable diesel production. October saw biodiesel production increase after fading the month prior due to a cessation of Argentine imports, while renewable diesel production rates continued to improve.  Renewable diesel output increased 4.6%, moving from 39.26 million gallons to 41.27 million. Biodiesel production also increased, moving from 176.10 million gallons to 186.21 million; a 5.74% rise from September. Biodiesel represents 82% of October 2017 D4 production while renewable diesel accounts for 18%.  Biodiesel production is up 0.29% year over year. RD production is 11.23% stronger.

Domestic production accounts for 1.464 billion of the 2.060 billion D4 gallons produced so far in 2017.  596.81 million gallons were received as imports.  During October, it is estimated that 45.25 million biodiesel gallons and 10.08 million renewable diesel gallons were imported.

The EPA revised the Jan through Sep production totals higher, adding 560,111 RINs and 353,923 gallons to the D4 totals. During October, domestic production accounted for 267.37 million RINs, importers contributed 54.99 million and 27.70 million RINs were from foreign production. Month over month, domestic RIN production was up 8.25 million, importers increased by 11.75 million, and foreign production was down 0.96 million RINs.