D4 at $2.38: How High Before Washington Blinks?
The most important biofuel signal today was D4 RINs. December 2026 D4s jumped 4.38% to $2.38/RIN, and EPA’s newly released July numbers help show why. Domestic D4 generation fell to 798.05 million RINs from 839.22 million in June, down 4.9%. Renewable diesel accounted for most of the deterioration, with generation falling 7.2% to 532.21 million RINs. Biodiesel slipped 1.9% to 218.26 million. SAF was the exception, rising 10.7% to a record 47.58 million D4 RINs from 29.74 million physical gallons. Including 24.87 million D5 RINs, July gross D4/D5 generation reached only 822.92 million RINs, down 5.1% from June’s 866.95 million. The estimated net generation pace required to balance 2026 sits near 916 million RINs per month. June suggested industry was getting closer. July moved backwards. EPA established a 9.07 billion RIN biomass-based diesel obligation after SRE reallocation and built its assumptions around roughly 90% utilization of existing biodiesel and RD capacity. Industry has never sustained the production pace embedded in those assumptions. I do not have evidence proving EPA intended industry to miss the higher RVO, but seven months of actual generation increasingly show how aggressive the assumptions were.
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