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US May RIN Generation Falls From April, Remains Above Year-Ago Level, EPA Says

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The number of renewable identification numbers generated in May under the Renewable Fuel Standard dropped from the previous month but rose from year-ago levels, according to the Environmental Protection Agency's report on Thursday.

Total RIN generation year-to-date stood at 9.66 billion RINs, up 4% from a year ago.

Over 2.02 billion RINs were generated in May, down 2.4% from April, the EPA report showed.

Nearly 1.26 billion D6 ethanol renewable fuel RINs were generated in May, up 3% from April.

D4 RIN generation for biomass-based diesel totaled 735 million in May, up 3.5% from April and 22% from a year earlier.

In its report, the EPA revised April's D4 RIN generation upward by 3%, or 20 million RINs, to 710 million. Year-to-date D4 generation of 3.02 billion was up 11.5% from the year-ago level.

Of the D4 total, domestic renewable diesel accounted for 489.6 million RINs, up 6% from April and up 20% over the year.

Domestic biodiesel RIN generation totaled 187.4 million, down 3.7% from April and up 30% over the year.

Domestic sustainable aviation fuel RIN generation was 40.2 million in May, up 12% from a month ago, and 33% higher over the year.

The data still underwhelmed analysts reacting to the report.

Zander Capozzola, Argus Media's renewable fuels consultant, said May RIN generation was below expectations.

"Another underwhelming RIN print will force larger bank draws, while US trade balances recalibrate to alarmingly short RIN supply. Strait deal has commodity markets tumbling in search of new support levels despite failed diplomatic precedents," Capozzola said.

He added that renewable diesel margins have pulled back by 11% on average in May from the prior month, as feedstock prices far outpaced diesel prices.

"Even with the recent pullback, RD margins are up over 200% year-to-date," Capozzola said.

He added that the RIN strength relative to the bean oil-heating oil spread has waned in the first half of June, indicating a softening margin environment.

"Soybean crush margins have pulled back from record highs as crude, diesel, and soybean oil enter a race to the bottom amid a Strait deal that realistically has weak prospects, given past failures and ongoing regional instability," he said.

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