RIN stocks down, but no shortage expected

By EPM Staff | January 16, 2013

Last year marks the first time since the U.S. EPA began using renewable identification numbers (RINs) to track compliance under the renewable fuel standard (RFS), there was no year-over-year RIN carryover. University of Illinois economist Nick Paulson suggests, however,  that the RIN stock won’t be depleted, offering additional flexibility for 2013, if needed.

Analysis published in the university’s FarmDocDaily newsletter, says statistics suggest a 2012 domestic production level of just under 13.2 billion gallons, with exports of 742 million gallons. Earlier analyses showed that 2011 wrapped up with approximately 2.64 billion RINs, that could be used for compliance in 2012.

According to Paulson, the result is 2012 RIN generation of just under 12.5 billion. “Given the 13.2 billion gallon renewable ethanol mandate in 2012, this will require RIN stocks to be drawn down somewhere below the 2 billion gallon level,” he said in the analysis. “The implication for 2013 is continued flexibility in the demand for corn-for-ethanol of approximately 700 million bushels relative to total demand implied by the 2013 non-advanced mandate of 13.8 billion gallons.”