Volume 6, Issue 4
Published: May 7, 2012
Slowly but surely

It is still early in the year, but the US biodiesel industry seems headed for little demand growth in 2012 compared with a year prior when domestic production facilities recorded output of 1.1 billion gallons. That is more than enough to satisfy the federal mandate, with the 2012 Renewable Fuels Standard (RFS) requirement for 1 billion gallons of biomass-based diesel to be used in lieu of petroleum-based fuel this year.


In fact, data from the Environmental Protection Agency’s (EPA) Moderated Transaction System shows 212.5 million Renewable Identification Numbers (RINs), or more than 20% of the RFS target have been generated during the first two months of the year, with RINs the credit used to show compliance in meeting the federal mandate. An obligated party under the RFS can carry over 20% of a prior year’s RINs to satisfy their Renewable Volume Obligation (RVO), so it does not mean all of these RINs will be used in 2012.


To this point, the US Energy Information Administration (EIA), the statistical and analytical arm of the Department of Energy, estimates actual domestic consumption of biodiesel in 2011 was 772 million gallons. A late in the year production push was also seen capturing the subsidy from an expiring tax credit that paid $1 (€0.75) for each gallon of biodiesel that was blended into petroleumbased diesel. That tax credit expired at year end and there are no expectations that it will be renewed. 

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