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I stumbled across this article over at Seeking Alpha about impact of an expected shortfall in RIN supply on biodiesel production margins.

You may have heard that DAR has a little skin in this game...

Have a read:

http://seekingalpha.com/article/3994233-biodiesel-production...

Biodiesel Production Margins Rise With Expected RIN Supply Shortfall

U.S. biofuel producers benefit from international and US federal and state policies to reduce carbon tailpipe emissions. Currently, there are two primary markets in the US that enable producers and other participants to monetize carbon credits: the Renewable Fuel Standard (RFS) and the California Low Carbon Fuel Standard (LCFS). Understanding the logic and market mechanisms of these markets is not for the faint of heart. The RFS is the law under which Renewable Identification Numbers (RINs) are created and sold.

and...

Both Wall Street analysts and the academic community have forecast a shortfall of RINs by 2017. Goldman Sachs recently upgraded Darling Ingredients (NYSE:DAR), in part on an its forecast for a RIN shortfall by 2017. The RIN shortfall is expected to keep continued upward price pressure on RINs.

and as such, the author posits:

Biomass-based diesel gross margins have risen substantially in 2016 and the outlook for biomass-based diesel demand is favorable. Industry and academic experts have forecast that more biomass-based diesel than expected will be needed to satisfy RIN compliance for 2016 and beyond. These trends will enable pure play biomass-based diesel producers like REGI to show improved margins, while also helping diversified agricultural companies like DAR and ADM to show improving segment profitability.

Greg
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