RFS

There’s no shortage of debate around ethanol and gasoline with the summer driving season just around the corner. Farm and biofuels groups are pushing hard for policies favoring expanded ethanol use, while refiners are lobbying for changes to the Renewable Fuel Standard to make it less complex and unpredictable.  The current spike in fuel prices adds another (though likely short-term) component to the debate. Today, we’ll dive into the debate, focusing on ethanol blending policies.

The Environmental Protection Agency’s (EPA) proposed Renewable Volume Obligations (RVOs) for 2026-27 did more than just set renewable fuel mandates for the next two years, they included dramatic shifts in the way that imported fuels and feedstocks are handled and raised the likelihood of higher compliance costs during a time in which the federal government has been focused on keeping prices under control. In today’s RBN blog, we look at the critical changes that will affect imported biofuels and feedstocks and the potential cost impact. 

Familiar corporate names like Cummins, Freightliner and Waste Management have joined forces with dozens of less-familiar public companies and startups to form what some might call a new U.S. industry. Thousands of commercial trucks powered by compressed natural gas (CNG) are on the roads nationwide, many of them filling up at dedicated fueling stations offering a compressed form of renewable natural gas (RNG), a cellulosic biofuel typically sourced from landfills and dairy farms. In today’s RBN blog, the third and final in our series on the D3 Renewable Identification Number (RIN), we show how this young industry could emerge as a commercial success for cellulosic biofuels, although political and regulatory risk remains. 

A primary objective of the Renewable Fuel Standard (RFS) implemented in 2007 was to stimulate the production of at least 16 billion gallons/year of gasoline and diesel made from cellulosic biomass, or non-food crops and waste biomass like corn stalks, corncobs, straw, wood, wood byproducts and animal manure. But the vision of making gasoline from wood chips never materialized and today’s cellulosic biofuel is a whole different ballgame. In today’s RBN blog, we look at the evolution of cellulosic biofuels and the D3 Renewable Identification Number, aka the D3 RIN. 

A primary objective of the federal Renewable Fuel Standard (RFS), when it was expanded back in 2007, was to stimulate by 2022 the production of at least 16 billion gallons/year of gasoline and diesel made from cellulosic biomass in conversion plants resembling small refineries. After getting lots of headlines in the early days of renewable fuels, that vision faded into the background and attention shifted to the use of ethanol in gasoline and the production of diesel from soybean oil, but cellulosic biofuels — non-food crops and waste biomass like animal manure, corn cobs, corn stalks, straw and wood chips — are back in the spotlight thanks to a regulatory quirk. In today’s RBN blog, the first in a series, we review the unusual history of the D3 Renewable Identification Number (RIN), the subsidy designed to stimulate cellulosic biofuel production, and the recent impact on heavy-duty trucking. 

The federal Renewable Identification Number (RIN) and California’s Low Carbon Fuel Standard (LCFS) have long served as tools to force renewable fuels like ethanol into the U.S. fuel supply. They are environmental credits that subsidize production of renewable fuels that would not otherwise be economically justified. Nuances embedded in the design of these credit systems have again kicked in to surprise the markets, this time with a hit to renewable diesel (RD) margins. Today’s RBN blog zeroes in on two root causes for that hit. 

Renewable diesel (RD) production has been surging this year, far surpassing blending mandates established by the Environmental Protection Agency (EPA). But there may be storm clouds on the horizon. The jump in RD production has led to excess generation of Renewable Identification Numbers (RINs), the tool used to ensure compliance with the Renewable Fuel Standard (RFS), impacting RD economics. With RD production set to move even higher in 2024 amid already-declining margins, it has left some to wonder how the market will come back into balance. In today’s RBN blog, we look at the growth in RD production, the resulting impact on RIN volumes and prices, and how things could shake out next year. 

U.S. production of hydrogenated renewable diesel (RD), which is made from soybean oil, animal fats and used cooking oil, is growing faster than expected. That may sound like good news for the renewable fuels industry, but it comes with the fear that the rapid growth might push RD production levels well past the mandates set by the Renewable Fuel Standard (RFS), potentially triggering a sudden crash in Renewable Identification Number (RIN) prices that — if it happens — would rock the market. In today’s RBN blog, we estimate the likelihood and possible timing of such a market-shaking event.

U.S. production of hydrogenated renewable diesel (RD), made from soybean oil and animal fats like used cooking oil, is growing faster than expected. That may sound like good news for the renewable fuels industry, but it comes with the fear that the rapid growth might trigger a sudden crash of Renewable Identification Number (RIN) prices that — if it happens — would rock the market. In today’s RBN blog, we have a go at describing what that might look like.