November 2, 2015

Dear Administrator McCarthy:

Your new monthly format released in October in your website entitled “Fuels Registration, Reporting, 

and Compliance Help” is viewed as an improvement. Adding to the cumulative data through September 

on volume and RINs in the table entitled “Total Production and Fuel Type,” I added the September rate 

for the balance of 2015 to estimate the totals for the year. This is, of course, tentative but represents 

the most recent data available. Table 1 reflects the EPA data for 2014 and my derivation for 2015. The 

ratios of RINs to volume provide the means to translate proposed Renewable Fuel Standards to RINs.

In Table 2 are the RIN balance sheets for D3, D4, D5 and D6 for 2013, 2014, estimates for 2015 and 

projections to 2017 with the EPA’s proposal. The assumptions for RIN generation are presented in the 

footnotes. 

Alternative balance sheets for 2014 to 2017 are presented in Table 3. The assumptions, also presented 

in the footnotes, are as follows: (1) The D3 RINs continue as generated in Table 2, (2) The mandates for 

D4 RINs will increase to the actual generation in 2014 and 2015, increase to 3000 million in 2016 and 

3500 million in 2017, (3) The mandates for D6 will align with the statutory mandates of the Energy 

Independence and Security Act of 2007 (EISA) in 2014 to 2016. Other assumptions are noted in Table 3.

My proposal reflects the intent of EISA to expand the role of renewable fuels based mostly on D6 but 

with minimum levels for D4. The biodiesel industry has demonstrated the ability to generate RINs above 

the mandate resulting in surplus RINs which were used in the carry-ins for D5 and D6 (Table2). The 

Department of Energy’s Energy Information Administration (EIA) estimated in August 2015 that the

capacity of the industry was 2087 million gallons. However, the EIA only reports production of biodiesel 

made from methyl ester (Biodiesel at EV 1.5 in Table 1). In August (latest month for the EIA data), the 

EPA reported production of D4 at 185 million gallons compared to the EIA’s estimate of 123 million 

gallons. The EPA’s estimate is 50 percent higher than the EIA’s. This suggests that the capacity of the 

biodiesel industry is actually about 3130 million gallons (1.5 X 2087) capable of generating 4800 million 

RIN gallons. The conclusion is clear. The biodiesel industry can easily generate 3000 million RINs in 

2016 and 3500 million RINs in 2017.

Since the Advanced Biofuel Sector (D5) failed to meet the mandate in 2013, 2014 and likely in 2015, it 

would seem that this mandate should be attenuated to the level estimated to be attained in 2015. The 

carryover assistance available from D4 in 2013 would provide some comfort through 2016.

The scenario advanced in this communication for Renewable Fuel (D6) in Table 3 would also follow the 

statutory commitment of EISA and provide a stable level of RIN carry-ins.

Sincerely,

John (Jake) Ferris

Professor Emeritus

Department of Agricultural, Food and Resource Economics

Michigan State University
 Table 1. RIN Generation and Renewable Fuel Volume Production by Fuel Type

 As reported for Calendar Year for 2014 by the EPA and Projected for the Calendar Year 2015 1

2014 2015 2

Fuel Category Volume RINs RIN Volume RINs RIN

Mil. Gal. Mil. Gal. Ratio Mil. Gal. Mil. Gal. Ratio

Cellulosic Biofuel (D3)

 Ethanol (EV 1.0) 0.7 0.7 1.6 1.6

 Natural Gas (EV 1.0) 32.3 32.3 124.3 124.3

 Total 33.0 33.0 1.000 125.9 125.9 1.000

Biomass-Based Diesel (D4)

 Biodiesel (EV 1.5) 1423.7 2135.6 1517.9 2276.5

 Non-ester Renewable Diesel (EV 1.5) 0.2 0.3 0 0

 Non-ester Renewable Diesel (EV 1.6) 7.5 11.9 5 8.4

 Non-ester Renewable Diesel (EV 1.7) 319.6 543.3 300.4 510.4

 Total 1751.0 2691.1 1.537 1823.3 2975.3 1.533

Advanced Biofuel (D5)

 Ethanol (EV 1.0) 90.3 90.3 146.5 146.5

 Biogas (EV 1.0) 20.4 20.4 0 0

 Naptha (EV 1.5) 17.9 17.9 16.6 24.9

 Non-ester Renewable Diesel (EV 1.7) 8.4 14.3 5.5 9.1

 Total 137.0 142.9 1.043 168.6 180.5 1.071

Renewable Fuel (D6)

 Ethanol (EV 1.0) 14002.8 14002.8 14223.3 14223.3

 Biodiesel (EV 1.5) 53.2 79.8 68.7 103.2

 Non-ester Renewable Diesel (EV 1.7) 151.4 257.4 107.2 352.1

 Total 14207.4 14340.0 1.009 14499.2 14678.4 1.012

Grand Total 16128.4 17207.0 1.067 16617 17780.4 1.070

1

 The EV designations relate to Equivalence Value to ethanol.

2 Assumes that production continues as the same monthly rate in September through 2015.
 Table 2. Balance Sheet on RINs for 2013, 2014 and Projected to 2017 (Million RIN Gallons)

 Assuming that Production continues at the September Monthly Rate and that the EPA Proposal Prevails

Cellulosic Biomass- Advanced Renewable Total Total

Biofuel Based Diesel Biofuel Fuel Advanced

(Mostly (Mostly (Mostly corn

biodiesel) cane ethanol grain ethanol)

imports)

Year Balance Sheet Items D3 D4 D5 D6 D3,D4,D5 D3,D4,D5,D6

2013 Carry-in 10 353 196 2117 549 2666

Generation 21 2739 488 13347 3228 16575

Supply 1 3091 684 15464 3776 19240

Mandate 1 1920 824 13800 2745 16545

Potential 2014 Carry-in 30 1171 -140 1664 1031 2695

Limited 2014 Carry-in 40 510 56 2880 566 3446

2014 Carry-in 0 510 56 62269 7566 2835

Generation 233 2691 143 14340 2867 17207

Supply 33 3201 180 16609 3433 20042

Mandate 33 52505 280 13369 2818 16267

Potential 2015 Carry-in 30 696 -100 3240 596 3836

Limited 2015 Carry-in 40 521 62 2712 583 3295

2015 Carry-in 0 521 62 62825 7583 3408

Generation 8 126 2795 180 14678 3101 17779

Supply 126 3316 242 17503 3684 21187

Mandate 106 5 2606 311 13561 3023 16584

Potential 2016 Carry-in 320 710 -69 3942 661 4603

Limited 2016 Carry-in 441 552 72 2834 665 3499

2016 Carry-in 20 552 72 62920 7644 3564

Generation 9 206 2795 180 14678 3181 17859

Supply 226 3347 252 17598 3825 21423

Mandate 206 52759 364 14168 3329 17497

Potential 2017 Carry-in 320 588 -112 3430 496 3926

Limited 2017 Carry-in 4583

2017 Carry-in 583

Generation 9 2795

Supply 3378

Mandate 2913

Potential 2018 Carry-in 3465

1 Source::

EPA's 2013 NFRM 2 Estimate of production adjusted for retirement for non-compliance purposes such as exports. 

3 Estimated RIN supply less the mandate 4 Carry-in is limited to 20% of the statutory mandates for the following year.

5

 The statutory mandate for D3 would, of course, be waived as was done in 2013. 

6 D4 RINs which could not be carried in but are limited to 56 million in 2014, 62 million in 2015 and 72 million in 2016. 

7 The potential 2014 carry-in of D6 RINs (1664 million) plus the balance of excess D4 carry-in RINs (1171-510-56 million).

For 2015, the addition is (696-521-62 million). For 2016, the addition is (710-552-72 million).

8 Assumes that the generation of RINs will continue at the September pace in the fourth quarter.

9 Assumes the the generation of RINs will continue at the 2015 level except for D3; with D4 RINs at the 2015 rate in 2017.
 Table 3. Balance Sheet on RINs for 2013, 2014 and Projected to 2017 (Million RIN Gallons)

 Assuming Increased Mandates for D4 in 2014-2017 and D6 in 2014-2016 over the EPA's Proposal

Cellulosic Biomass- Advanced Renewable Total Total

Biofuel Based Diesel Biofuel Fuel Advanced

(Mostly (Mostly (Mostly corn

biodiesel) cane ethanol grain ethanol)

imports)

Year Balance Sheet Items D3 D4 D5 D6 D3,D4,D5 D3,D4,D5,D6

2013 Carry-in 10 353 196 2117 549 2666

Generation 21 2739 488 13347 3228 16575

Supply 1 3091 684 15464 3776 19240

Mandate 1 1920 824 13800 2745 16545

Potential 2014 Carry-in 30 1171 -140 1664 1031 2695

Limited 2014 Carry-in 40 510 56 2880 566 3446

2014 Carry-in 0 510 56 62269 7566 2835

Generation 233 2691 143 14340 2867 17207

Supply 33 3201 180 16609 3433 20042

Mandate 833 52691 143 14126 2867 16993

Potential 2015 Carry-in 30 510 37 2483 547 3030

Limited 2015 Carry-in 40 549 36 3036 585 3621

2015 Carry-in 0 510 36 62483 7546 3029

Generation 9 126 2795 180 14678 3101 17779

Supply 126 3305 216 17161 3647 20808

Mandate 8106 5 2795 180 15180 3081 18261

Potential 2016 Carry-in 320 510 36 1981 566 2547

Limited 2016 Carry-in 441 600 36 3036 677 3713

2016 Carry-in 20 510 36 61981 7566 2547

Generation 9 206 3000 180 15810 3386 18566

Supply 226 3510 216 17161 3952 21113

Mandate 8206 53000 180 15180 3386 18566

Potential 2017 Carry-in 320 510 36 1981 566 2547

Limited 2017 Carry-in 4700

2017 Carry-in 510

Generation 9 3500

Supply 4010

Mandate 83500

Potential 2018 Carry-in 3510

1 Source::

EPA's 2013 NFRM 2 Estimate of production adjusted for retirement for non-compliance purposes such as exports. 

3 Estimated RIN supply less the mandate 4 Carry-in is limited to 20% of the statutory mandates for the following year.

5

 The statutory mandate for D3 would, of course, be waived as was done in 2013. 

6 D4 RINs which could not be carried in but are limited to 56 million in 2014, 36 million in 2015 and 36 million in 2016. 

7 The potential 2014 carry-in of D6 RINs (1664 million) plus the balance of excess D4 carry-in RINs (1171-510-56 million).

8 Assumes that the mandate on D4 will increase to the actual generation in 2014 and 2015, increase to 3000 in 2016 and 

3500 million in 2017. Assumes that the mandates for D6 will align with the statutory mandates in 2014-2016.

9 Assumes the the generation of RINs for D3 will increase as shown in the base in Table 2. Assumes that the generation of 

D4 RINs will equal the mandate in 2016 and 2017. Assumes that the generation of D6 RINs will equal the mandate in 2016.