Production of biomass-based diesel fell 35.74 million gallons in January compared with December, US Environmental Protection Agency data showed Thursday.
Biodiesel production reached 125.3 million gallons in January, falling 22.2% from December. However, January 2016 production was 33.6 million gallons, or 36.6%, higher than January 2015 production.
Buyers and sellers were waiting for the EPA data, which would give an early indication of biodiesel supply. High feedstock soybean oil prices and low diesel fuel prices have led many obligated parties to refrain from blending biodiesel into diesel supplies.
The EPA data also showed a steep drop in D4 RIN generation in January. Fewer than 192 million biodiesel RINs were generated last month, a drop of 54 million RINs from December. But January 2016 RIN generation eclipsed January 2015 by 48 million RINs.
Sources told Platts earlier in the year that low production and low RIN generation data could spur a spike in RIN prices that could make physical biodiesel a more economically attractive option for obligated parties.
