BioFUelsCan - Platts · PDF fileBioFUelsCan agRiCUltURe Platts key daily ethanol assessments low-high midpoint Change United states (¢/gal) (PBF page 210)

Volume 4 / Issue 216 / November 3, 2015

BIOFUELSCAN

www.platts.com AGRICULTURE

Platts key daily ethanol assessments low-high midpoint Change

United states (¢/gal) (PBF page 210)

Ethanol Chicago (terminal) AALRI00 155.20-155.30 155.25 -1.50Ethanol swap Chicago (Dec) ESCM001 152.45-152.55 152.50 -1.00

Brazil Cargo assessments ($/cu m) (PBF page 220)

Ethanol FOB Santos Cargo AAWFO00 529.95-530.05 530.00 +0.00

northwest europe (€/cu m) (PBF page 1210)

Ethanol T2 FOB Rotterdam AAYDT00 641.00-642.00 641.50 -4.00

asia Pacific ($/cu m) (PBF page 2210)

Bioethanol CIF Philippines AAWAA00 527.00-529.00 528.00 -4.00

argentina cuts biodiesel export taxes, lowers some prices

Buenos Aires—Argentina’s Energy Secretariat said Tuesday it has cut biodiesel export taxes and reduced biodiesel prices for large producers, effective retroactively from September 1. On its website, the department said it reduced export taxes to 8.6% in September compared with 9.82% in August. It also reduced the price of biodiesel supplies paid by oil refiners for a 10% blend in diesel to Pesos 5.213/mt ($0.549) for output from large integrated producers. That down 0.25% from Pesos 5.226/mt in August. The price for output from non-integrated large producers was raised 0.34% to Pesos 6.161/mt from Pesos 6.14/mt over the same period. Prices for small and medium-sized producers were raised to Pesos 6.971-

Platts key daily Biodiesel assessments low-high midpoint Change

northwest europe ($/mt) (PBF page 1310)

FAME 0 (RED) FOB ARA AAWGI00 796.75-801.75 799.25 +24.75RME (RED) FOB ARA AAWGK00 908.75-913.75 911.25 +5.25

northwest europe premiums ($/mt) (PBF page 1313)

FAME 0 (RED) FOB ARA AAXNT00 328.50-333.50 331.00 +12.50RME (RED) FOB ARA AAXNU00 440.50-445.50 443.00 -7.00


Biodiesel B100 SME Chicago AAURR00 236.55-236.65 236.60 +6.00

asia ($/mt) (PBF page 2310)

Biodiesel FOB Southeast Asia AAVSV00 599.90-600.10 600.00 -9.00

achieving volumes in RFs mandate would be difficult: CBo

Washington—Mandating the statutory biofuels volumes in the Renewable Fuel Standard will be difficult to achieve due to the blend wall and potentially cause US diesel prices to rise 25-45 cents/gal and E10 gasoline prices to rise 15-30 cents/gal, the Congressional Budget Office said in a report Tuesday. Repealing the RFS could cause diesel prices to fall 5 cents/gal, with a negligible impact on E10 prices, the CBO said. The findings, presented to two House of Representatives subcommittees, could give added ammunition to lawmakers seeking to repeal or reform the RFS. “Full compliance with the mandates in [the RFS statute] poses significant challenges,” Terry Dinan, a senior adviser to the CBO, testified. If the statutory

tUesday’s highlights�� US biodiesel jumps on rising heating oil futures�� Ethanol Europe CEO urges NGOs to support biofuels�� Brazil spot ethanol export discussions muted on record domestic prices�� US Ethanol prices continue to fall despite rebounds in corn and gasoline futures

(continued on page 10)

Contents

Ethanol 3

RINs 4

RVO 4

ETBE 7

Biodiesel 7

Biofuels industry news 8

Futures and foreign exchange 9

(continued on page 11)

7.081/mt compared with Pesos 6.943-7.051/mt in August, the department said. The biodiesel industry has warned that high taxes and low prices are slowing production, as are a slower-than-expected increase in the blend in diesel beyond 10% and restrictions on exporting product to the EU. The Argentine Biofuels and

BRazil ethanol exPoRts

Source: SECEX

(million liters)

0

100

200

300

400

500

DecNovOctSepAugJulJunMayAprMarFebJan

2012 20132014 2015

biofuelscan november 3, 2015

2Copyright © 2015 McGraw Hill Financial

ethanol maRket CommentaRy

United states

market analysis: (PBF page 299) US ethanol prices continued to fall Tuesday, despite rebounds in underlying CBOT corn and NYMEX RBOB gasoline futures. CBOT December corn futures rose 4 cents to $3.8050/bushel, while November RBOB gasoline futures rose 7.02 cents from Monday to $1.4455/gal. Chicago Argo was assessed at $1.5525/gal, down 1.5 cents from Monday. New York harbor any-November was assessed at $1.6625/gal, down 3.7 cents, while any-December fell to $1.6250/gal from Monday, down 1 cent. Rule 11 ethanol was assessed at $1.5750/gal for this-week delivery, down 2.5 cents. The Houston ethanol assessment fell 5.2 cents to $1.6250/gal. The California ethanol assessments fell to $1.7350/gal for prompt delivery, without receiving either a bid or offer during the Platts Market on Close assessment process. The RIN markets were largely up day on day, as ethanol RINs were assessed at 40.50 cents/RIN ,up 50 points from Monday; advanced RINs were assessed at 49 cents/RIN, down 4.5 cents from Monday; and biodiesel RINs were assessed at 57.5 cents/RIN, up 2 cents from Monday.

Us Chicago and nyh ethanol assessment rationale: (PBF

page 295) Chicago Argo ethanol was assessed at $1.5525/gal Tuesday. By the 3:15 pm EST (2015 GMT) assessment close, there were eight trades in the Chicago Argo ethanol Platts Market On Close assessment process for November 8-18 delivery. During the MOC process, Koch sold 20,000 barrels to ADM and Shell at $1.5525/gal. Koch then sold 10,000 barrels to Shell at $1.5525/gal. Next, Koch sold 15,000 barrels to Valero at $1.5525/gal. Trading activity concluded when CHS sold 5,000 barrels to Valero at $1.5525/gal. The window concluded with an outstanding bid at $1.55/gal from LDM and an outstanding offer of $1.5550/gal from Koch. New York Harbor ethanol for any-November was assessed at $1.6625/gal, while NYH any-December was assessed at $1.6250/gal. New York Harbor any-November

was traded once at $1.6625/gal, when Shell purchased 25,000 barrels from Valero. The New York Harbor any-November window concluded with an outstanding bid of $1.65/gal from ADM and an outstanding offer of $1.6725/gal from Rolmpus. New York Harbor any-December concluded with an outstanding bid of $1.61/gal from Shell without an outstanding offer, but was heard at a bid/ask range of $1.62-$1.63/gal prior to the MOC process.

The above commentary applies to the following market data codes: AALRI00, AAMPF00.

Rin assessment rationale: (PBF page 195) Ethanol (D6) RINs for 2015 were assessed Tuesday at 40.5 cents/RIN, between the outstanding bid-ask range of 40-41 cents/RIN. Ethanol

RINs for 2014 were assessed at 40.75 cents/RIN, moving in line with 2015 ethanol RINs. Ethanol RINs for 2016 were assessed at 40.75 cents/RIN, moving in line with 2015 ethanol RINs. Biodiesel (D4) for 2015 were assessed at 57.5 cents/RIN, the last traded level. Biodiesel RINs for 2014 were assessed at 56 cents/RIN, moving in line with 2015 biodiesel RINs. Biodiesel RINs for 2016 were assessed at 65 cents/RIN, moving in line with 2015 biodiesel RINs. Advanced (D5) RINs for 2015 were assessed at 49 cents/RIN, as they were last heard bid at a 4-cent discount to 2015 biodiesel RINs. Advanced RINs for 2014 were assessed at 44 cents/RIN, moving in line with 2015 advanced RINs. Advanced RINs for 2016 were assessed at 53.5 cents/RIN, as they were last heard bid at a 3.5-cent premium to 2015 advanced RINs.

Us ethanol PRiCe assessments low-high midpoint ChangeUnited states (¢/gal) (PBF page 210)

Ethanol Chicago (terminal) AALRI00 155.20-155.30 155.25 -1.50

Ethanol Chicago (Rule 11) AAVWD00 157.45-157.55 157.50 -2.50

Ethanol swap Chicago (Dec) ESCM001 152.45-152.55 152.50 -1.00

Ethanol swap Chicago (Jan) ESCM002 150.45-150.55 150.50 -1.60

Ethanol NYH Barge (Nov) AAMPF00 166.20-166.30 166.25 -3.70

Ethanol NYH Barge (Dec) AAUEG00 162.45-162.55 162.50 -1.00

Ethanol Houston 5-15 Tank AATGJ00 162.45-162.55 162.50 -5.20

southern California Rail Car assessments (¢/gal) (PBF page 210)

Ethanol prompt 7-14 AAMNK00 173.45-173.55 173.50 -1.00

Ethanol forward 15-30 AAMNN00 171.45-171.55 171.50 -1.00

northern California Rail Car assessments (¢/gal) (PBF page 210)

Ethanol Prompt 7-14 AAMFT00 173.45-173.55 173.50 -1.00

Ethanol Forward 15-30 AAMFZ00 171.45-171.55 171.50 -1.00

Us dRied distilleR gRains PRiCe assessments ($/st) (PBF page 501)

low-high midpoint Change

CIF New Orleans barge AADDG00 157.95-158.05 158.00 0.00

FOB Chicago truck ACDDG00 140.45-140.55 140.50 +1.00



The above commentary applies to the following market data codes: RINCY01, RINCY02, BDRCY01, BDRCY02, ABRCY01 and ABRCY02.

ddg market analysis: (PBF page 504) The US DDGS market was dead on arrival Tuesday as trading dropped off. “This is the least I’ve ever seen DDGS trade,” one Midwest source said. That assessment was confirmed by another source: “No one seems to care much out in the marketplace today.” The market has been dismal in terms of activity for the last several days. Some sources have argued that mild fall weather has stalled domestic demand as beef herds remain in the pastures and out of feedlots. Other sources have argued that forward concerns from possible Chinese customers are stymieing the market. Either way, everyone agrees that nothing is happening in the market now. Looking ahead, the US Energy Information Administration will release its weekly ethanol production and stock estimates on Wednesday. In competing products, corn rallied on Tuesday, as front-month CBOT corn futures settled 4 cents higher as $3.8050/bushel. Soybean meal, however, finished 90 cents lower, with front-month CBOT futures settling at $301.30/st.

ddg assessment rationale: (PBF page 504) Chicago FOB DDGS were assessed at $140.50/st with an additional $15 charge for containerizing after being heard bid at $137/st and offered at $144/st. New Orleans CIF DDGS for October were assessed at $158/st as they were last heard bid at $156/st and last heard offered at $160/st at the market close.

The above commentary applies to the following market data codes: AADDG00 and ACDDG00.

Us ethanol bids/offers/trades: (PBF page 209) �■ MOC bids: Chicago: Ethanol: LDM bids $1.55/gal,Nov 8-18,

ITT Argo, 5Kb; Chicago: Ethanol: ADM bids $1.57/gal,Nov 8-18, R11, 145Kb; Houston: Ethanol: Shell bids $1.61/gal,Nov 8-18, Houston, 10Kb; New York: Ethanol: ADM bid $1.65/gal, any-Nov, NYH, 25Kb; New York: Ethanol: Shell bids $1.61/gal, any-Nov, NYH, 25Kb.

Platts Us Renewable VolUme obligation – CalCUlated ValUes (PBF page 302) ¢/gal %/gal

advanced Change Biodiesel ethanol Biofuel Cellulosic

2014 RVO (Jan 1, 2014 – Jan 31, 2015) RVOY014 4.1575 +0.0413 1.1300 8.1200 0.4860 0.00402015 RVO (Jan 1, 2014 – Jan 31, 2016) RVOY015 4.1791 +0.0414 1.1300 8.1200 0.4860 0.00402016 RVO (Jul 1, 2015 – Jan 31, 2016) RVOY016 4.3060 +0.0446 1.1300 8.1200 0.4860 NARVOs are Renewable Volume Obligation values. RVO is the aggregate cost of the Renewable Identification Number percentages per gallon of transportation fuel for biodiesel, ethanol, advanced biofuel, and cellulosic ethanol as mandated by US Environmental Protection Agency in Renewable Fuel Standard Program (RFS2). Platts calculates these RVO values factoring the value of biodiesel, ethanol, advanced biofuel and cellulosic biofuel RIN credits as assessed by Platts for the respective RVO years; RINs are assessed as cents/RIN.

RenewaBle identiFiCation nUmBeR (Rin)

(¢/Rin) Rolling code Calendar code low-high midpoint Changeethanol (d6) (PBF page 201)

RIN Calendar-Year 2014 RINCY01 RD62014 40.70-40.80 40.75 +0.50RIN Calendar-Year 2015 RINCY02 RD62015 40.45-40.55 40.50 +0.50RIN Calendar-Year 2016 RINCY03 RD62016 40.70-40.80 40.75 +0.50

Biodiesel (d4) (PBF page 301)

RIN Calendar-Year 2014 BDRCY01 RD42014 55.95-56.05 56.00 +2.00RIN Calendar-Year 2015 BDRCY02 RD42015 57.45-57.55 57.50 +2.00RIN Calendar-Year 2016 BDRCY03 RD42016 64.95-65.05 65.00 +1.00

advanced biofuel (d5) (PBF page 201)

RIN Calendar-Year 2014 ABRCY01 RD52014 43.95-44.05 44.00 -4.50RIN Calendar-Year 2015 ABRCY02 RD52015 48.95-49.05 49.00 -4.50RIN Calendar-Year 2016 ABRCY03 RD52016 53.45-53.55 53.50 -1.50

Cellulosic biofuel (d3) (PBF page 201)

RIN Calendar-Year 2014 CBRCY01 RD32014 48.95-49.05 49.00 +0.00RIN Calendar-Year 2015 CBRCY02 RD32015 63.95-64.05 64.00 +0.00The calendar codes indicate the traditional full calendar year codes for Platts RINs assessments, while the supplementary rolling codes are unique to the specific calendar-year RINs.

ethanol PRiCes at key RaCk loCations (¢/gal) Chippewa Falls des moines grand Forks kansas City minneapolis omaha sioux Falls

Cenex DE312FX 167.31 DE059FX 162.86 DE175FX 172.76 DE256FX 198.99Dale Pet DE175AT 169.00Fl Hills DE059IF 175.00 DE175IF 173.00 DE099IF 170.00 DE141IF 185.00 DE185IF 169.00 DE256IF 164.00MinnIowa DE059CW 164.00 DE141CW 185.00 DE185CW 163.00 DE256CW 161.00Sapp Bros DE185EA 162.90Western DE059FN 169.00 DE175FN 175.00 DE099FN 169.00 DE141FN 168.00 DE185FN 171.00 DE256FN 166.00Prices effective as of 12:01 am EST 03NOV15, provided by DTN.



�■ MOC offers: Chicago: Ethanol: Koch offers $1.5550/gal,Nov 8-18, ITT Argo, 10Kb; Houston: Ethanol: Vitol offers $1.64/gal,Nov 8-18, Houston, 10Kb; New York: Ethanol: Rolympus offers $1.6725/gal, any-Nov, NYH, 25Kb.

�■ MOC trades reported: Koch-ADM, $1.5525/gal, Chicago Argo,Nov 8-18, 10Kb; Koch-Shell, $1.5525/gal, Chicago Argo,Nov 8-18, 10Kb; Koch-Shell, $1.5525/gal, Chicago Argo,Nov 8-18, 5Kb; Koch-Shell, $1.5525/gal, Chicago Argo,Nov 8-18, 5Kb; Koch-Valero, $1.5525/gal, Chicago Argo,Nov 8-18, 5Kb; Koch-Valero, $1.5525/gal, Chicago Argo,Nov 8-18, 5Kb; Koch-Valero, $1.5525/gal, Chicago Argo,Nov 8-18, 5Kb; CHS-Valero, $1.5525/gal, Chicago Argo,Nov 8-18, 5Kb; Shell-Valero, $1.6625/gal, New York Harbor, any-Nov, 25Kb. Other trades reported: None.

Us ethanol exclusions: (PBF page 209) �■ No data was excluded from the assessment.

The above price indications apply to the following market data codes: AALRI00, AAMPF00.

Us Rin bids/offers/trades: (PBF page 206) �■ MOC bids: None. �■ MOC offers: None. �■ MOC trades reported: None. Other trades reported: None.

Us Rin exclusions: (PBF page 206) �■ No data was excluded from the assessment.

The above price indications apply to the following market data codes: RINCY01, RINCY02, BDRCY01, BDRCY02, ABRCY01, ABRCY02.

Brazil (PBF page 289)

CommentaRy: Domestic hydrous ethanol prices in Center-South Brazil surged Tuesday, following the country’s long weekend that kept the market closed Monday. The Platts hydrous assessment increased Real 80/cu m to Real 1,950/cu m on an ex-mill Ribeirao Preto basis, in line with the last deals heard Tuesday. The price is an all-time high. Despite

the surge, market participants saw good volumes trading at this level. Rains forecasted for the whole week translated into higher offers on Tuesday, sources said. “Producers are very bullish,” a broker said. On exports, discussions remained quiet due to strength in domestic prices. “Everything is at standstill for spot shipments. Everyone is focused on the

domestic market,” a trader said. “There are no spot offers -- rains are hampering the harvest,” a broker said. Only an offer for Grade B for the next crop, 2016-17, was heard at $420/cu m on an FOB Santos/Paranagua basis. Despite weeks of quiet spot discussions, Brazilian ethanol exports in October reached a 2015 record of 259.1 million liters, up 49% from

ethanol t2 FoB RotteRdam

(€/cu m)

550

575

600

625

650

03-Nov 21-Oct 08-Oct 25-Sep 14-Sep 01-Sep

Rin d6 ethanol 2014

(¢/RIN)

25

30

35

40

45

03-Nov 21-Oct 08-Oct 25-Sep 14-Sep 31-Aug

BRazil ethanol PRiCe assessments low-high midpoint Change

Brazil Cargo assessments (PBF page 220)

Ethanol FOB Santos Cargo (¢/gal) AATAE00 208.15-208.25 208.20 +7.60Ethanol FOB Santos Cargo ($/cu m) AAWFO00 529.95-530.05 530.00 +0.00Ethanol FOB Santos Cargo (Real/cu m) AAWFP00 2073.25-2073.35 2073.30 +28.10

hydrous anP (PBF page 223)

Domestic Ex-mill Ribeirao with taxes (Real/cu m) AAXNQ00 1945.00-1955.00 1950.00 +80.00FOB Santos/Paranagua ($/cu m) AAXNR00 487.50-492.50 490.00 +20.00

anhydrous anP (PBF page 223)

Domestic Ex-mill Ribeirao with taxes (Real/cu m) AAXNN00 1895.00-1905.00 1900.00 +20.00

grade B (PBF page 223)

FOB Santos/Paranagua ($/cu m) AAXNS00 497.50-502.50 500.00 +20.00

daily Prices (PBF page 226)

Spot Ex-mill Ribeirao Hydrous expressed asRaw Sugar equivalent (basis 96 degrees pol) (¢/lb) AAXOA00 13.94-13.96 13.95 +0.80Spot FOB Anhydrous direct to FOB NY (inc. D5 value) ($/gal) AAXNO00 1.83-1.85 1.84 +0.12Spot FOB Anhydrous direct to FOB NY (inc. D5 value) ($/cu m) AAXNP00 483.44-488.72 486.08 +31.70



September and more than double the 101 million liters exported in October 2014, data from the Secretariat of Foreign Trade showed Tuesday. The bulk of the volume was said to have been booked prior to the run up in domestic prices. The volume was also the highest volume exported since October 2013, when the country exported 337 million liters. January-October ethanol exports totaled 1.38 billion liters, up 18% compared with the same period last year. Kingsman, an agricultural analysis unit of Platts, estimates that exports this year should reach 1.55 billion liters, up 11% from the 1.4 billion liters exported in 2014. Rationale: The Platts FOB Santos anhydrous ethanol assessment for 10-30 days forward loading increased $20/cu m at $550/cu m Tuesday, tracking a combination of higher domestic prices and a stronger real/dollar exchange rate, which hit 3.7697 by the time of the assessment. No indications were reported to Platts on Tuesday. No bids or offers were heard prior to the Platts Market on Close assessment process.

northwest europe

market analysis: (PBF page 1299) The Platts T2 ethanol assessment eased down from its two-year high Tuesday after one of the quietest trading days this year. The assessment fell Eur4/cu m on the day due to a strong backwardated structure in the physical market and was last at Eur641.50/cu m. Market participants did not anticipate Monday’s big day-on-day jump, when the assessment gained a staggering Eur39.75/cu m on the day. “It is tight, and it is not easy to find product, but that was a bit too much,” one source said. “It’s perky, I wasn’t expecting quite what happened yesterday,” a second source added. The European ethanol market had one of its quietest days of the year Tuesday, with most market participants out of office. No trades on both the physical and swap markets were reported and only physical bids were available with no offers in sight. Tightness in the market is expected to persist during the next couple of weeks, with the nearest imports arriving during the second half of December. Reduced Rhine levels

are not bringing any relief to price levels either, and are causing severe delays and higher freight prices, adding to the supply concerns in Europe.

ethanol t2 FoB Rotterdam assessment rationale: (PBF page

1295) Platts T2 ethanol was assessed at Eur641.50/cu m FOB Rotterdam Tuesday, down Eur4/cu m from Monday. There were two bids and no offers live at the 1630 UK close. There were no trades reported in the Platts MOC process. Value for November 12 loading was assessed at Eur641.49/cu m.

Physical indications during the day did not prove that the relationship between the physical assessment and equivalent dates on paper had changed. The physical value was assessed today at Eur61.50/cu m over the equivalent paper dates. The physical structure was assessed in a backwardation of Eur0.90/cu m per day, unchanged on the day. The average swap price over physical loading dates was assessed at Eur580/cu m, down from Eur584.01/cu m the previous day.

The above commentary applies to the following market data code: AAYDT00.

asian ethanol PRiCe assessments low-high midpoint Change

Fuel grade ($/cu m) (PBF page 2210)

Bioethanol FOB Thailand AAWZM00 502.00-504.00 503.00 -4.00Bioethanol FOB Singapore AAWAD00 501.00-503.00 502.00 -4.00Bioethanol CIF Philippines AAWAA00 527.00-529.00 528.00 -4.00Bioethanol CIF Philippines H2 Dec AAWAB00 532.00-534.00 533.00 -4.00Bioethanol CIF Philippines H1 Jan AAWAC00 527.00-529.00 528.00 -4.00Bioethanol CIF Philippines H2 Jan AAWAE00 522.00-524.00 523.00 -4.00

industrial ($/cu m) (PBF page 2210)

Ethanol Grade B CFR Ulsan AAXVA00 549.00-551.00 550.00 +0.00

noRthwest eURoPe ethanol PRiCe assessments low-high midpoint Change

northwest europe (PBF page 1210)

Ethanol T2 FOB Rotterdam German Spec (€/cu m) AAVLD00 641.00-642.00 641.50 -4.00Ethanol T2 FOB Rotterdam (€/cu m) AAYDT00 641.00-642.00 641.50 -4.00Ethanol T2 FOB Rotterdam German Spec ($/cu m) AAVLD10 702.22-703.31 702.76 -8.90Ethanol T2 FOB Rotterdam ($/cu m) AAYDT10 702.22-703.31 702.76 -8.90Ethanol T1 FOB Rotterdam ($/cu m) AAWUQ00 534.00-535.00 534.50 -15.00Ethanol T1 CIF NWE Cargo ($/cu m) AAYDS00 522.00-523.00 522.50 -15.00

northwest europe swaps assessments (€/cu m) (PBF page 1610)

M1 (Dec) AAXCL00 561.50-562.50 562.00 +0.00M2 (Jan) AAXCM00 530.50-531.50 531.00 +0.00M3 (Feb) AAXCN00 520.50-521.50 521.00 +0.00M4 (Mar) AAXCO00 518.50-519.50 519.00 +0.00M5 (Apr) AAXCP00 518.50-519.50 519.00 +0.00M6 (May) AAXCQ00 518.50-519.50 519.00 +0.00



nwe ethanol bids/offers/trades: (PBF page 1209) �■ MOC Bids: ASA bid: Eur635/cu m, 1kt, FE, November 6-10.

CHSI bid OCO: Eur632/cu m, 1kt, FE, Eur612/cu m, 1kt, MW, Eur601/cu m, 1kt, BE.

�■ MOC offers: none. �■ MOC trades reported: None. Other trades reported: None.

nwe ethanol exclusions: (PBF page 1209) �■ No data was excluded from the assessment.

The above price indications apply to the following market data code: AAYDT00.

asia (PBF page 2299)

CommentaRy: The Asian ethanol market saw thin activity Tuesday, with many major participants away for an industry conference in Budapest. Beverage-grade ethanol cargoes from Brazil continued to stay at elevated prices. This was compounded by higher freight rates for Trans-Pacific routes. “The shipping market has been pretty tight recently, as many vessels are currently in the water heading East,” one trader noted. An oil company in the Philippines awarded a tender to purchase 2,000 cu m of fuel-grade ethanol into the southern port of Batangas, sources said. Details could not be immediately confirmed, but the price was said to be “significantly lower” than the theoretical replacement cost of around $530-$535/cu m. The company had postponed its tender for a week to hold out for better prices, amid the brief rally in US ethanol futures seen recently, said sources. Rationale: The Platts fuel-grade ethanol marker was assessed Tuesday at $528/cu m on a

Biodiesel PRiCe assessments low-high midpoint Change

northwest europe eU Renewable energy directive (Red) ($/mt) (PBF page 1310)

FAME -10 FOB ARA AAWGH00 897.50-902.50 900.00 +7.50

FAME 0 FOB ARA AAWGI00 796.75-801.75 799.25 +24.75

SME FOB ARA AAWGJ00 834.00-839.00 836.50 +18.25

RME FOB ARA AAWGK00 908.75-913.75 911.25 +5.25

PME FOB ARA AAXNZ00 706.75-711.75 709.25 +34.75

northwest europe non-Red ($/mt) (PBF page 1310)

FAME -10 FOB ARA AAWGY00 875.00-880.00 877.50 +7.50

FAME 0 FOB ARA AAXQL00 774.25-779.25 776.75 +24.75

RME FOB ARA AAUCA00 886.25-891.25 888.75 +5.25

northwest europe premiums ($/mt) (PBF page 1313)

RED FAME 0 FOB ARA AAXNT00 328.50-333.50 331.00 +12.50

RED RME FOB ARA AAXNU00 440.50-445.50 443.00 -7.00

RED SME FOB ARA AAXNX00 365.75-370.75 368.25 +6.00

RED PME FOB ARA AAXNY00 238.50-243.50 241.00 +22.50

Non-RED FAME 0 FOB ARA AAXNV00 306.00-311.00 308.50 +12.50

Non-RED RME FOB ARA AAXNW00 418.00-423.00 420.50 -7.00

asia ($/mt) (PBF page 2310)

Biodiesel FOB Southeast Asia* AAVSV00 599.90-600.10 600.00 -9.00*Loadings in Southeast Asia normalized to Singapore, Pasir Gudang and Dumai


Biodiesel B100 SME Chicago AAURR00 236.55-236.65 236.60 +6.00

Biodiesel B100 SME Houston AAURS00 232.55-232.65 232.60 +6.00(Delivered by truck or rail to location, 3-10 days ahead)

etBe PRiCe assessments low-high midpoint Change

northwest europe ($/mt) (PBF page 1420)

ETBE FOB AR AASLQ00 806.75-807.25 807.00 +20.00

ETBE premium to MTBE AASLQ02 194.00 +0.00

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CIF Philippines basis, or $4/cu m lower from the previous session. The assessment reflected the theoretical replacement cost for imports from the US, which fell on weaker underlying ethanol futures. The Platts beverage-grade assessment was steady at $550/cu m, CFR Ulsan.

asia ethanol trades: (PBF page 2209) �■ No trades reported

etBe maRket CommentaRy


The European spot price of ETBE was assessed at $807/mt FOB AR, up $20/mt in line with a rise in the spot price of MTBE. ETBE’s premium over MTBE was assessed unchanged at $194/mt. The Northwest European gasoline market rallied Tuesday as it tracked a widening RBOB/Brent spread on the back of increased short-covering activity on the NYMEX RBOB futures market. The November Eurobob gasoline crack rose $1.15/b to $9/b day on day, while the front-month EBOB crack was at $7.15/b, 75 cents/b higher. “The strength in the US market is lifting the gasoline cracks...that is compounded by a Brent that

is quite low,” said a gasoline market source. The RBOB/Brent spread— the differential of the front-month NYMEX RBOB futures to the front-month ICE Brent contract —climbed to $9.91/b at the 16:30 London close, up from $8.30/b Monday, and was seen breaking the $10/b mark during the European afternoon.

nwe etBe trades: (PBF page 1426) �■ MOC deal summary: None

Biodiesel maRket CommentaRy

United states (PBF page 399)

US biodiesel assessments skyrocketed on Tuesday as heating oil futures jumped a day before the US Energy Information Administration releases its weekly report on crude oil and distillates stocks and production Wednesday. The agency last week estimated that ultra-low sulfur diesel stocks declined 3.928 million barrels. The increase in ULSD prices on Tuesday indicates that the market expects stocks to decline further in Wednesday’s report. December NYMEX ULSD futures settled 5.91 cents higher to $1.5660/gal, the fourth straight gain and the highest level since October 9. The December soybean oil

contract settled 30 points higher to 28.15 cents/lb, rising for the second time in three sessions. The relationship between the price of soybean oil and heating oil, most commonly known as “boho,” fell 3.78 cents to 50.87 cents/gal, the fifth consecutive decline in as many sessions and the lowest level since October 8. Biodiesel RINs for 2015 were assessed 2 cents higher at 57.5 cents/RIN, and rose above the boho factor for the first time in several weeks. And while the prompt market continued to be sluggish, several bids and offers were heard for first-quarter deliveries in several markets throughout the Midwest and Southern US. Rationale: The Chicago SME biodiesel assessment rose 6 cents to $2.3660/gal, while the US Gulf Coast SME biodiesel assessment rose 6 cents to $2.3260/gal. The physical premium for Chicago SME biodiesel was at 80 cents/gal as sources last reported premiums to ULSD offered at 85 cents/gal against no bids. The physical premium for US Gulf Coast SME biodiesel to ULSD was at 76 cents/gal as sources talked Gulf Coast at a 4-cent discount to Midwest product. No trades were heard for prompt delivery by time of assessment.


The RED FAME 0 premium to the underlying ICE gasoil futures moved up strongly despite a strong rise in energy

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BioFUelsCanVolume 4 / issue 216 / november 3, 2015



prices, as buying interest for the product returns at the start of the month and market participants see the differential between RME and FAME 0 lower. The premium gained $12.50/mt on the day and was assessed at $331/mt. Meanwhile, the RED RME premium fell $7/mt on the day in response to a $12/mt rise in gasoil futures and was assessed at $443/mt Tuesday. The RME to FAME 0 spread lost $19.50/mt on the day, after it reached an all-time high of $131.50/mt on Monday. The RED FAME 0 premium went up on the day on an increase of buying interest at the start of November, after a quiet day of trading yesterday, with current value “closer to replacement value [of RED FAME 0],” a source said. Furthermore, the biodiesel market is long on the RME/FAME 0 spread and went up during October, but “you can’t buy FAME at RME minus $145/mt, that’s not the market,” a source said. Demand for RME remained strong keeping the premium supported. Currently high rapeseed oil prices due to low Rhine levels and a reduced harvest compared to last year, gave additional support to the RED RME premium. Rationale: The RED FAME 0 premium over ICE gasoil was assessed at $331/mt FOB ARA Tuesday, up $12.50/mt on the day. The premium for RED RME was assessed at $443/mt FOB ARA, down $7/mt. A trade for RED RME, loading November 10- December 1, 57% GHG savings, on the offer was heard at $445/mt. A market for RED FAME 0, loading November 10- December 1 was heard at $330/mt versus $340/mt. The value for RED RME, loading November 12, was assessed at $443/mt, reflecting the offer down to and trade which indicated that value was down on the day. A conservative premium of $2/mt for 57% GHG savings spec was included. The value for RED FAME 0, loading November 12, was assessed at $331/mt, reflecting the bid live at close which indicated that value was higher on the day. The value for RED PME, loading November 12, was assessed at $241/mt FOB ARA, at a discount of $90/mt to RED FAME 0, changed from $100/mt Monday. The change in the discount reflected the change in the RED RME versus RED FAME 0 spread. The structures for RED FAME 0 and RED PME were assessed in unchanged backwardations of

$0.15/mt per day. The structure for RED RME was assessed in an unchanged backwardation of $0.20/mt.

asia (PBF page 2399)

CommentaRy: Small cargoes of between 2,000-3,000 mt of palm methyl ester had made their way from the Malaysian ports of Port Klang and Pasir Gudang to European destinations during October, said market sources Tuesday. Malaysia exported 30,545 mt of PME during October, said a trader citing data accumulated by cargo surveyors Intertek. A substantial volume of the cargoes reported was dispatched from Pasir Gudang with only 3,000 mt going out of Port Klang. Of the cargoes shipped out of Malaysian ports, 2,045 mt was shipped to Asian locations while a much larger volume of 13,500 mt was sent to European destinations, including Spain and Italy, said an Asian producer. The benchmark Bursa Malaysia crude palm oil futures market fell by 2.68% on day during Tuesday’s trading, as CIMB released its palm market report predicting further build-up of domestic Malaysian palm stocks. Rationale: The non-RED FOB South-east Asia price fell $9/mt to close at $600/mt Tuesday. The benchmark third-month Bursa Malaysia CPO futures contract fell sharply by $12/mt on day at the Asian close Tuesday, while the most market-representative offer heard was at $605/mt. Both values were taken into consideration in assessing the price Tuesday.

BioFUels indUstRy news

Chicago argo-R11 ethanol spread down sharply from 2014 in volatile year

Houston—The Chicago Argo-R11 ethanol spread has averaged 57 points in 2015, a 94% decrease from the 2014 average of 10.13 cents, according to Platts data, as market sources said the relationship between the two could remain volatile through the end of the year. The two products have

shown a volatile relationship since January 6, when Argo traded at a 6.55-cent premium to the rail-delivered product. “Normally R11 trades at a premium to Argo, but this year has been odd,” a US ethanol trader said. “Argo holding a premium to a delivered product makes zero sense.” There are several underlying factors affecting the prices for each product and the relationship between the two, sources said. “Corn crop, corn prices, paper [markets], rail lines backing up in the winter months ... there is some variable that always pops up to throw the basic fundamentals that determine price.” a broker said. With many in the market having already purchased their ethanol for the year, while others wait for the EPA’s RFS new volume obligations, the future relationship between the products remains unclear. “It’s just a part of ethanol,” the US ethanol trader said. “That [jumpy] relationship has always been a variable part of trading it.”

FUtURes and FoReign exChange (PBF page 2)

Platts 1630 singapore assessments

BMD CPO (MYR/mt) BMAAA00 2185.00 -56.00PO-GO ($/mt) POVGO00 55.53 -9.76USD/MYR USMYR00 4.2883 -0.0127

Platts 1630 london assessments

EUR/USD AAFCW00 1.0955 -0.0070USD/BRL USBRL00 3.7736 -0.0787ICE LS Gasoil Mo1 ($/mt) AARIN00 466.00 +12.00ICE LS Gasoil Mo2 ($/mt) AARIO00 470.00 +11.75BO-GO ($/mt) CBAAA00 150.19 -11.78NYSE Liffe Paris milling wheat (€/mt) NLAAC00 180.50 +1.25NYSE Liffe Paris rapeseed (€/mt) NLAAB00 380.75 +2.00NYSE Liffe Paris corn (€/mt) NLAAA00 161.00 -1.25CBOT soybean oil (¢/lb) CBAAE00 27.95 +0.01CBOT corn (¢/bu) CBAAG00 381.00 +4.00CBOT soybean meal ($/st) CBAAC00 304.90 +2.40

Platts 1415 houston assessments

USD/BRL USDRE00 3.7697 -0.0813CBOT soybean oil (¢/lb) CBAAD00 28.15 +0.30CBOT corn (¢/bu) CBAAF00 380.50 +4.00CBOT soybean meal ($/st) CBAAB00 301.30 -0.90BO-HO (¢/gal) CBABG00 50.87 -3.77



Brazilian ethanol exports surge in october as interest from China grows

Santos—Brazilian ethanol exports in October reached a 2015 high at 259.1 million liters, up 49% from September and more than double compared with October 2014, data from the Secretariat of Foreign Trade showed Tuesday. It was also the highest volume exported since October 2013, when the country exported 337 million liters. The main factors booting exports were the Brazilian FOB price’s competitiveness due to a weaker Brazilian real against the US dollar combined with lower domestic ethanol prices during the 2015-16 sugarcane season, in addition to China’s increasing interest in ethanol imports. The recent surge in volumes to China has been triggered by higher Chinese domestic ethanol prices, which have been inflated in recent months by high feedstock corn and tapioca prices and by low utilization rates across China’s ethanol production capacity. Denatured ethanol shipped into China is typically blended into gasoline by the country’s oil companies, while undenatured ethanol tends to be used by the chemical or pharmaceutical industries. It has not been confirmed how much product is for fuel or industrial usage, but according to Kingsman, the agricultural unit of Platts, the ethanol exported is the anhydrous grade, which contains less water and it can be mixed with gasoline. Kingsman estimated that at least a one-third of the total volume exported in October headed to China. The export trend is likely to change in the short term as FOB ethanol values in Brazil surged in October following the recent hike in domestic prices, according to Kingsman. The Platts anhydrous FOB Santos/Paranagua assessment averaged $493/cu m in October, up 19% from September but down 17% from October 2014. The factors that boosted domestic price were the 6% increase in ex-refinery gasoline prices announced in late September; fewer hydrous ethanol offers in the spot market, as producers are building stocks for the intercrop season; and recent rains in the region that hampered the pace of harvest. January-October Brazilian ethanol exports totaled

Platts would like to confirm that the price assessments for dried distillers grains with solubles (DDGS) are published in $/short tons not $/metric tons as reported from October 1, 2015. Platts also confirms that the numerical values published from October 1 are correct but reflect $/short tons. The CIF New Orleans barge and FOB Chicago truck assessments are published on the Platts Biofuels Alert page 501 under codes AADDG00 and ACDDG00, respectively. The assessments are also published in the daily Platts Biofuelscan. The assessments reflect export quality DDGS with a protein content with a minimum of 25%, a minimum color of 50 (according to the Hunter L test), fat minimum of 6%, and a moisture level in the range of 10% to 12%, standardized to 11.5%. For Chicago, prices reflect 25 short tons (22.6 mt) on a truck delivered to the Channahon, Illinois, rail head for next week delivery. For New Orleans, prices reflect CIF deliveries of 1,500 short tons (1,360 mt) basis New Orleans on a barge that has loaded over any period in the front-month from date of publication. Platts invites feedback on the assessments and the specifications for both assessments. Please send all questions and feedback to [email protected]. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

Effective December 1, 2015, Platts proposes to change the publication schedule of three ethanol and raw sugar equivalent prices available via Sugar Market Data, and to also bring the name descriptions in line with the original assessments provided via Biofuels Market Data. The prices are Brazil ex-mill hyd R$/cu m (SGAEC00), Brazil ETH hydrous (SGAED00), and Brazil ex-mill hyd c/lb (SGBAC00). These prices appear in the Kingsman Daily Sugar Market Report, on Platts Agriculture Alert page PA0510, and in the Platts Sugar Market Data under the aforementioned symbols. These three prices are based on ethanol assessments basis 1415 Houston time, which are published the previous day via the Biofuels Market Data package. Those assessments are Hydrous ANP Domestic Ex-mill Ribeirao with taxes (Real/cu m) (AAXNQ00), Hydrous ANP FOB Santos/Paranagua (AAXNR00), and Raw Sugar equivalent (basis 96 degrees pol) (c/lb) (AAXOA00). Currently, Brazil ex-mill hyd R$/cu m (SGAEC00) and Brazil ETH hydrous (SGAED00) are published one day after the respective original assessments Hydrous ANP Domestic Ex-mill Ribeirao with taxes (Real/cu m) (AAXNQ00) and Hydrous ANP FOB Santos/Paranagua (AAXNR00). Under the proposal, the assessments would be made available via Sugar Market Data on the same day the assessments are published via Biofuels Market Data. Brazil ex-mill hyd c/lb (SGBAC00), which reflects a raw sugar equivalent price in US cents/lb based on Hydrous ANP Domestic Ex-mill Ribeirao with taxes (Real/cu m) (AAXNQ00), is also published with a one-day time-lag. This calculated price uses the same underlying calculation as that used for the Raw Sugar equivalent (basis 96 degrees pol) (c/lb) (AAXOA00). Under the proposed changes, that assessment will be made available on the same day under Brazil ex-mill hyd c/lb (SGBAC00) to address fluctuations in the US Dollar/Brazilian Real. The last change under the new approach will see the three prices available via Sugar Market Data assume the name descriptions of the original assessments. Proposal summary Biofuels market data: sugar market data description symbol symbol Current description Hydrous ANP Domestic AAXNQ00 SGAEC00 Brazil ex-mill hyd Ex-mill Ribeirao R$/cu m with taxes (Real/cu m) Hydrous ANP FOB AAXNR00 SGAED00 Brazil ETH hydrous Santos/Paranagua Raw Sugar equivalent AAXOA00 SGBAC00 Brazil ex-mill hyd (basis 96 degrees pol)c/lb (c/lb) Platts invites questions and feedback to [email protected] and cc: to [email protected], by October 9, 2015. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request. Platts invites questions and feedback to [email protected] and cc: to [email protected], by October 9, 2015. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

The T1 CIF NWE and FOB Rotterdam assessments represent the lowest calculated net-forward value from a basket of daily established values, basis 16:30 London time, for FOB Santos and FOB Chicago Argo ethanol, as provided by Platts’ regional teams. The Platts European

sUBsCRiBeR notes (PBF page 1500)



1.38 billion liters, up 18% compared with same period last year. Kingsman estimated that exports should reach 1.55 billion liters in 2015, up 11% compared with 1.4 billion liters exported in 2014.

ethanol europe Ceo urges ngos to support biofuels

Budapest—Eric Sievers, the CEO of Ethanol Europe, the holding company of ethanol production facility Pannonia, Tuesday urged support for biofuels from non-governmental organizations (NGOs) and from the European Union itself, at an industry event in Budapest. Sievers said that those groups which opposed the proliferation of biofuels were often “beguiled” by the persuasions of the oil industry. He added that the denial of climate change and the continued “obfuscation” of biofuels was hindering progress in Europe and further afield. To help with this significant road block, Sievers welcomed NGOs who he called the “gate keepers” of environmental issues, to help in the “fight against oil.” To combat climate change and topple oil from its throne, Sievers said the EU must increase taxes on oil to force it out of the fuel mix and rise biofuels mandates significantly. Touching further on the role of NGOs and their importance in the move toward a higher ratio of biofuels in the road-fuel mix, Sievers said it was a damning insight that anti-hunger, anti-poverty and anti-climate change often came out in opposition to biofuels and ultimately, inadvertently supported the oil industry as a result. He said that NGOs and policy makers needed to get serious in their support for renewables and renewable development. The speech was met with praise and support from many conference attendees who agreed with the need to get NGOs on side, one said: “We’re not going to go anywhere if we don’t win that battle.”


T1 CIF NWE assessment reflects minimum 3,000 mt (or the equivalent in cubic meters) cargoes, basis Rotterdam. A premium is applied to convert ASTM to EN spec in the case of the Chicago Argo value. Premiums are applied to convert ANP to EN spec and for Bonsucro PoS in the case of the FOB Santos value. All premiums are based on market feedback. The net-forward calculation uses an assessment of freight rates based on freight reports and market feedback. The assessment uses a density value of 0.7887 g/cm3 for converting metric tons into cubic meters. The T1 FOB Rotterdam assessment reflects 1,000 mt (or the equivalent in cubic meters) barges. It is assessed at a fixed premium of $12/cu m versus the T1 CIF NWE assessment, which represents logistics costs. Further to earlier announcements, dated January 20 and February 24, Platts extends the period of consultation and feedback relating to its proposal to decouple Platts FOB Rotterdam T2 ethanol assessment and the Platts FOB Rotterdam T2 German spec assessment. Additionally, Platts extends the period of consultation for the associated proposal to introduce a minimum greenhouse gas saving of 50% in Platts FOB Rotterdam T2 German spec ethanol assessment, as per the European Union’s Fuel Quality Directive calculation. The feedback period for both changes has been extended to September 18, 2015. Platts proposes to implement the changes effective October 19, 2015. Platts continues to monitor the activity and development of the European ethanol market in light of the change to the German domestic biofuel mandate and, will adapt its methodology as necessary to reflect standard spot market trade flows. The fossil fuel comparator and greenhouse gas saving calculation reflected will be as per the prevailing implementation of the Fuel Quality Directive in Germany. All other specifications will conform to the prevailing Renewable Energy Directive 2009/28/EC. Please send any comments or questions to [email protected] by September 18, 2015. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request. Platts confirms it will discontinue effective January 1, 2016 all biodiesel FOB ARA assessments for product that is not certified as compliant with the European Union’s Renewable Energy Directive. The announcement follows a proposal note published June 22, 2015. The following assessments will be discontinued: description symbol Biodiesel FAME -10 FOB Rdam Barge $/mt AAWGY00 Biodiesel FAME 0 FOB Rdam Barge $/mt AAXQL00 description symbol Biodiesel RME FOB ARA Barge $/mt AAUCA00 Biodiesel Europe Premium (non-RED) FAME 0 FOB ARA $/Mt AAXNV00 Biodiesel Europe Premium (non-RED) RME FOB NWE $/Mt AAXNW00 Biodiesel FAME -10 Brg ARA $/MT WAvg AAWGY04 Biodiesel FAME 0 FOB Rdam Barge $/mt WAvg AAXQL04 Biodiesel RME FOB ARA Barge $/mt WAvg AAUCA04 Biodiesel FAME -10 FOB Rdam Barge $/mt MAvg AAWGY03 Biodiesel FAME 0 FOB Rdam Barge $/mt MAvg AAXQL03 Biodiesel RME FOB ARA Barge $/mt MAvg AAUCA03 Please send any comments or questions to [email protected] with a CC to [email protected]. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

Platts has decided not to add a requirement for minimum greenhouse gas savings to the specification for the T2 ethanol FOB Rotterdam assessment, beyond the 35% minimum savings required in order to be compliant with the European Union’s Renewable Energy Directive. In addition, Platts has decided not to decouple the Platts FOB Rotterdam T2 ethanol assessment and the Platts FOB Rotterdam T2 German spec assessment. The decision follows announcements, dated January 20, February 24 and June 16. Platts continues to monitor the activity and development of the European ethanol market in light of the change to the German domestic biofuel mandate and will adapt its methodology as necessary to reflect standard spot market trade flows. Please send any comments or questions to [email protected] with a CC to

achieving volumes ...from page 1

requirements were followed, fuel suppliers would have to significantly boost the amount of advanced biofuels offered



argentina cuts biodiesel ...from page 1

[email protected]. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

Platts is extending the deadline for feedback on its proposal that Platts FOB Rotterdam T2 ethanol assessments will change to reflect FOB Amsterdam, Rotterdam and Antwerp loading. The feedback period will be extended to December 31, 2015. In addition, Platts proposes that the assessment will reflect a FOB Rotterdam basis, with loading options in Amsterdam and Antwerp. As a consequence of the extension to the feedback period, it is now proposed that any change would be effective April 1, 2016. Platts invites further feedback regarding this proposal. Please send any comments or questions to [email protected] with a CC to [email protected] by December 31, 2015. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.

Hydrogen Association estimates that production this year could decline by over 30% to less than 1.8 million mt from 2.58 million mt in 2014. Production in the first half of 2015 fell 23% to 780,283 mt compared with 1.02 million mt in the year-earlier period, according to the latest data from Argentine statistics agency Indec. Over the same period, exports fell 55% to 236,550 mt compared with 524,216 mt, while domestic consumption rose 30% to 525,883 mt from 404,632 mt, Indec said.

— primarily biodiesel and sugar-cane ethanol from Brazil — and add much more ethanol to the gasoline supply than could be accommodated by selling E10, a 10% ethanol blend with gasoline, the CBO said. “The cost of boosting consumption of high-ethanol blends (such as E85) would fall on the producers and consumers of gasoline and diesel,” the CBO said. AWAITING FINAL RULES For now, any legislative efforts to change the RFS appear to be on pause, until the Environmental Protection Agency issues its final blending mandates for 2014, 2015 and 2016. The EPA, which administers the RFS, is required by a court settlement to announce those rules by November 30. “We’re just waiting to see what happens with the final rule,” an oil industry lobbyist, who asked not to be identified, told Platts. “What the EPA does will determine what, if anything, Congress does.” The RFS, created by Congress in 2005 and expanded in 2007, requires annually increasing the amount of biofuels to be blended into the US transportation fuel supply, up to 36 billion gallons in 2022, but gives the EPA some flexibility to modify those volumes. Earlier this year, the EPA proposed mandates of 15.93 billion gallons of biofuels for 2014, 16.30 billion gallons in 2015 and 17.40 billion gallons in 2016. The RFS’ statutory requirements call for 18.15 billion gallons of biofuels in 2014, 20.5 billion gallons in 2015 and 22.25 billion gallons in 2016. The biofuels industry has protested that the EPA should hew more closely to the statutory requirements, to promote greater use of alternative fuels, as Congress had intended. But the oil industry, which has sought to repeal the RFS, has said the blend wall makes additional volumes of biofuels nearly impossible to achieve. The blend wall refers to the point at which the ethanol mandate exceeds 10% of gasoline supply, as many cars are not warrantied to take blends above E10 and many service station owners have been reluctant to install the additional infrastructure needed

to offer higher blends, such as E15 and E85. The EPA, in proposing its 2014, 2015 and 2016 rules, acknowledged the blend wall and lowered the mandates below the statutory levels, citing its waiver authority. Many analysts say they expect the final rule to contain higher mandates, given that biofuels production has remained strong and US gasoline consumption has risen significantly due to low oil prices. The Energy Information Administration last month projected that 2015 US gasoline consumption would average 9.1 million b/d, the highest level since the peak of 9.3 million b/d in 2007. US ethanol production, meanwhile, is expected to average more than 950,000 b/d in 2015, an increase of 16,000 b/d from 2014, the EIA said. How much the EPA adjusts the volumes will be important also for how the RFS will be set going forward, if the final rules trigger a reset of the mandate. Under the RFS statute, the EPA is authorized to rewrite the biofuels mandates going forward if it reduces the volume targets relative to statutory levels by either 50% or more in one year, or 20% or more in two consecutive years. The EPA has consistently set the cellulosic biofuels mandate far below the statutory levels, and in the agency’s recently proposed 2014, 2015 and 2016 RFS, the advanced biofuel and


total renewable fuel volumes would trigger the reset provision. The biofuels industry has warned that such a reset would chill investment in their industry. The CBO, in its report, said the EPA’s waiver flexibility in adjusting the mandates would help alleviate blend wall concerns and decrease compliance costs for obligated parties. But lowering the mandates below the blend wall “also reduces incentives for companies to invest in production capacity for cellulosic and other advanced biofuels and to expand the availability of high-ethanol blends,” the CBO said.



HoustonSophie ByronManaging Editor

Wes SwiftAssociate Editor

Jordan GodwinBiofuels Analyst

Sao PauloAlessandra RoseteBiofuels Analyst

MontrealBeatriz Pupo Biofuels Analyst

LondonSimon ThorneEditorial Director, Agriculture

Tim WorledgeAssociate Editorial Director, Agriculture

Sean BartlettManaging Editor

Reinout Geyssens Editor

Caroline KnightEditor

SingaporeJulien HallSenior Managing Editor

Alexis GanEditor

Samar NiaziEditor

Wei Zheng Toh Associate Editor

meet the biofUels editoRial/analytiCal team

Documents

BioFUelsCan - Platts · PDF fileBioFUelsCan agRiCUltURe Platts key daily ethanol assessments low-high midpoint Change United states (¢/gal) (PBF page 210)