Understanding the implementation of the Biogas Regulatory Reform Rule (BRRR) within the finalized Renewable Fuel Standard (RFS) Set Rule released in July continues to be the talk of the industry. With the significant changes, many entities are trying to understand the U.S. Environmental Protection Agency’s (USEPA) intent, seeking USEPA clarification, and trying to understand how these new rules impact their planned, in-construction, and operational renewable natural gas (RNG) assets. As the USEPA develops its guidance, we understand that the industry needs time to prepare for the new regulatory requirements effective on July 1, 2024, for new facilities, and January 1, 2025, for existing pathways.
With that in mind, Eco is taking a multi-phased approach to BRRR implementation, including:
Monthly meetings with the USEPA.
In-person meeting with the USEPA held in late October.
Internal working group that meets weekly.
Proposed regular in-person meetings with the USEPA.
Participation in RFS Set Rule and biogas reform discussions and committees in industry trade associations.
We understand the urgency needed to address outstanding questions and we will continue to work with the USEPA to get the clarity necessary to comply with the new rules.
Proactively Addressing the Outstanding Questions and Issues
Eco is drafting its implementation plan for the RFS Set Rule and the BRRR. We will present our proposal to the USEPA for approval in the following areas:
Proposed approach to the RFS registration process changes and how to meet the requirements, consistent with the USEPA’s intent of the RFS Set Rule.
Proposed schedule and process to get our Quality Assurance Program (QAP) protocols updated to meet the new RFS Set Rule, which will provide more compliance clarity to our QAP customers.
We expect to have these proposed process changes sent to the USEPA within the next few weeks and will encourage the USEPA to sign off on our approach so we can move to the implementation phase, and have a definitive process for addressing metering/monitoring, RFS registration, and QAP questions and issues.
Eco is also working with equipment vendors to understand whether their equipment meets the formalities of the RFS Set Rule with the goal of producing a list of equipment and vendors that meet the regulation requirements.
Eco will provide monthly updates or webinars to update the industry on the progress made, learnings, timelines, and remaining issues/questions.
Eco is already working with several clients and can help you with:
Understanding the regulation changes and how they impact planned or operational renewable natural gas (RNG) facilities.
Metering and measurement reviews.
RFS registration amendments and third-party engineering reviews for existing facilities.
Compliance assistance.
D3/D5 Renewable Identification Number (RIN) split analysis and methodologies.
Our team is ready to assist you with working through your questions and issues to successfully comply with the new regulations. If you haven’t already, the time to start is now and Eco can be your guide through this transition period. Please reach out to us with any questions or issues.
For more information about the implementation of the BRRR and/or the RFS Set Rule, please contact:
The U.S. Department of Energy’s H2Hubs Program: Accelerating the Clean Hydrogen Economy
By Tanya Peacock
In a world increasingly focused on sustainable and eco-friendly solutions, clean[1] hydrogen has emerged as a promising alternative for a low-carbon energy future. On October 13, 2023, the Biden-Harris Administration announced seven U.S. regional clean hydrogen hubs spanning 16 states: Appalachian, California, Midwest, Gulf Coast, Heartland, Mid-Atlantic, and Pacific Northwest. Hubs are set to receive $7 billion in Bipartisan Infrastructure Law (BIL) funding under the U.S. Department of Energy’s (DOE) Regional Clean Hydrogen Hubs Program (H2Hubs). An additional $1 billion will be used for demand-side support to encourage industrial decarbonization and other innovative end uses. Together with an expected $42 billion in private investment, the Hubs Program represents a $50 billion investment in clean hydrogen.
The seven H2Hubs are the beginning of a national network of clean hydrogen producers and consumers, together with hydrogen storage and transportation, while supporting hundreds of thousands of new construction and permanent jobs. Skill sets required to support the clean hydrogen economy are similar to many oil and gas jobs. This is important as the energy transition accelerates so that workers in traditional energy sectors aren’t left behind.
In looking at the map below, there are areas of the country without H2Hub projects, noticeably the southwestern, northeastern, and southeastern regions, and Hawaii. The momentum created by the application and selection process is an important start and hopefully will continue to build and expand beyond the selected applications. To achieve a clean hydrogen economy, we need a nationwide network of hydrogen producers, consumers, and connective infrastructure. For example, to decarbonize long-haul, heavy-duty trucking, we will need transportation corridors with a network of H2 fueling stations. To accomplish this, ideally, selected H2Hubs will begin collaborating early-on with nearby regions that weren’t selected to leverage ideas, expertise, and resources, to accommodate the 8-10 year phased contracting approach.[2]
[1] Clean hydrogen is defined by the U.S. Department of Energy (DOE) as hydrogen produced with a carbon intensity equal to or less than 4 kilograms of CO2e produced on a well-to-gate basis per kilogram of hydrogen produced. (https://www.hydrogen.energy.gov/library/policies-acts/clean-hydrogen-production-standard)
[2] The phased contracting process, as described by OCED, is divided into 4 parts post-selection, and will take between 8-10 years: Phase 1 is the detailed planning process and is ~ 12-18 months; Phase 2 is project development, ~2-3 years; Phase 3 is construction, ~ 3-4 years; and Phase 4 is ramp-up and operations, ~ 2-4 years.
Source: Office of Clean Energy Demonstrations website
The H2Hubs are expected to collectively produce three million metric tons of hydrogen annually, reaching nearly a third of the 2030 U.S. production target and lowering emissions from hard-to-decarbonize industrial sectors that represent 30% of total U.S. carbon emissions, according to a statement issued by the DOE. Together, they will also reduce 25 million metric tons of carbon dioxide (CO2) emissions from end-uses each year—an amount roughly equivalent to the combined annual emissions of 5.5 million gasoline-powered cars. These are the figures from the press releases. To build confidence in the use of hydrogen for decarbonization, more transparency around how the projects’ community and environmental benefits are calculated will be required as the negotiation process between DOE and the selected applicants progresses and contractual agreements are finalized.
Of the 7 selected Hubs, targeted end uses include sectors that today use hydrogen from natural gas without carbon capture such as refineries, petrochemicals, and fertilizer production, and newer uses such as port operations, marine fuel, trucking, ammonia, space heating, and power generation. Clean hydrogen (production, processing, delivery, storage, and end-use) is crucial to the DOE’s strategy for achieving President Biden’s goal of a 100% clean electrical grid by 2035 and net-zero carbon emissions by 2050 because of the huge decarbonization potential.
The success of the H2Hubs and development of the clean hydrogen industry more broadly is directly linked to the Inflation Reduction Act (IRA) 45V hydrogen production tax credit (PTC). Hydrogen stakeholders have been waiting for the issuance of the IRA 45V PTC guidance document by the Internal Revenue Service (IRS) for more than a year since the IRA was signed into law. Key questions contributing to the delay center around how to increase certainty that the production and use of clean hydrogen will have a net environmental benefit and allow the flexibility needed to allow a nascent industry to develop and scale up.
Long-term techno-economic decarbonization models show that even with massive electrification and energy efficiency improvements, in 2050 as much as 50% of final energy demand globally will be met with clean molecules. The H2Hubs will play an important role demonstrating how clean hydrogen can scale up and in what sectors of the economy it can have the biggest decarbonization impact.
EcoEngineers Can Help Guide Your Clean Hydrogen Project
As companies seek to navigate the emerging clean hydrogen landscape, EcoEngineers can help project developers and their stakeholders address the factors that impact carbon intensity (CI) for clean hydrogen projects. Specifically, here’s how EcoEngineers can help:
Life-Cycle Analysis (LCA): Eco can provide comprehensive LCA services that assess the environmental impacts of clean hydrogen production, from raw material extraction to end use. Having performed more than 500 LCAs since 2015, we have experience in all regulations that require LCAs, including the U.S. Renewable Fuel Standard (RFS), California Low-Carbon Fuel Standard (LCFS), Oregon Clean Fuels Program (CFP), Canada Clean Fuel Regulations (CFR), British Columbia Renewable and Low-Carbon Fuel Requirements (RLCFR), Brazil RenovaBio, EU Renewable Energy Directive (RED) and impending directives, along with emerging Voluntary Carbon Markets.
Carbon Intensity (CI): We can help businesses lower their CI by identifying opportunities for efficiency improvements and carbon reduction strategies in clean hydrogen production and utilization. Lower CI values are crucial for meeting sustainability goals and accessing available incentives and credits such as the 45V clean hydrogen production tax credit under the Inflation Reduction Act (IRA).
Project Eligibility and Compliance: Navigating the regulatory landscape is complex, and EcoEngineers can guide businesses through the process. We can ensure that projects meet eligibility requirements for incentives, grants, and compliance with federal and state regulations. With more than 200 asset development engagements and $4 billion of investments for projects across decarbonization projects and technologies, Eco’s team of experts can provide individualized guidance throughout the entire project development lifecycle of your hydrogen project. From design, build, and operational phases to regulatory and permitting guidance, technology and market risk assessments, startup optimization, and capital raising evaluations – we have you covered.
Technology Selection: We can also provide practical guidance on technology selection, helping businesses choose the most suitable and efficient technologies for clean hydrogen production and utilization.
About EcoEngineers
EcoEngineers is a consulting, auditing, and advisory firm with an exclusive focus on the energy transition. From innovation to impact, Eco helps its clients navigate the disruption caused by carbon emissions and climate change. Eco helps organizations stay informed, measure emissions, make investment decisions, maintain compliance, and manage data through the lens of carbon accounting. Its team of engineers, scientists, auditors, consultants, and researchers live and work at the intersection of low-carbon fuel policy, innovative technologies, and the carbon marketplace. Eco was established in 2009 to steer low-carbon fuel producers through the complexities of emerging energy regulations in the United States. Today, Eco’s global team is shaping the response to climate change by advising businesses across the energy transition.
Tanya Peacock
For more information about our clean hydrogen services, contact:
Transportation fuel and plastics producers are increasingly under pressure to reduce the carbon intensity (CI) of their products to comply with state and federal low-carbon policies and industry and company-driven low-carbon goals. These include the United States’ (U.S.) Renewable Fuel Standard (RFS) and Canada’s Clean Fuel Regulations (CFR) or Low-Carbon Fuel Standard (LCFS) programs in California and British Columbia and Clean Fuels Programs in Oregon and Washington, as well as Europe’s Renewable Energy Directive (RED) and a wide array of registries and other European certification schemes such as International Sustainability and Carbon Certification (ISCC).
Transportation fuel and plastics producers want to ensure credible carbon claims and monetize their carbon reduction activities to capture the value of available LCFS credits and/or Renewable Identification Numbers (RINs). To do so, they need to first engage with experienced advisors who understand the carbon accounting frameworks and reporting structures unique to the compliance requirements of these low-carbon fuel programs — and that’s where EcoEngineers can help.
Eco has conducted more than 500 Life-Cycle Analysis (LCA) projects to date. We have extensive experience producing consistent, accurate, and objective LCA methodologies, with clear assumptions and calculations. Our LCAs provide clarity of a refinery or petrochemical facility’s CI values throughout the entire front-end process through to the production of renewable diesel (RD) and/or sustainable aviation fuel (SAF). Our team of experts can provide action plans that support your carbon reduction activities and help you monitor and adjust the CI of your fuel and chemicals along your journey of compliance. We routinely assist transportation fuel and plastics producers with the registration of
biobased feedstock eligibility and new technology pathways with the U.S. Environmental Protection Agency (USEPA) or California’s Air Resources Board (CARB), prepare product applications and certifications, interface with local regulatory agencies, and deliver documentation, auditing, and validation.
In addition, Eco is your trusted guide in optimizing your response to emerging energy policies and training your compliance team on carbon market reporting. Our process starts with education led by EcoUniversity, which provides training workshops, market outlooks, an intensive Carbon Literacy training program, and condensed board and management training modules.
Our Services:
RFS Part 79 Guidance
RFS Part 80 & Engineering Review
Equivalence Value (EV) Calculations
Inflation Reduction Act (IRA) Analysis (45Q, 45Z, and 45V)
Life-Cycle Analysis (LCA)
Quality Assurance Programs (QAP)
Monitoring & Verification
RINs Management
Interaction with Regulatory Bodies (i.e., Feedstock Petition)
Indirect Land-Use Change (iLUC) Evaluation
RINs & Credit Forecasting
For more information about our Petroleum and Refining services, please contact:
The European Union (EU) has bold plans to address climate change and promote sustainability in business, including the Fit for 55 Package and other key initiatives.
Dating back to the 1990s and early 2000s, the EU has been at the forefront of addressing climate change. However, the current goal of achieving climate neutrality by 2050 was formalized in the Green Deal of 2019, with details provided in the Fit for 55 Package.
European Trading Scheme One of the EU’s flagship programs, the European Trading Scheme (ETS), was instrumental in significantly reducing greenhouse gas emissions. Under the ETS, energy-intensive industries were mandated to gradually reduce emissions each year through ETS allowances. However, criticisms arose regarding the distribution of free allowances, which were provided to industries at risk of carbon leakage. This led to some industrial sectors being left outside the ETS, creating a debate about the effectiveness of this approach.
Fit for 55 Package The Fit for 55 Package is a comprehensive set of regulations, directives, and reforms aimed at rectifying past mistakes and advancing the EU’s climate ambitions. Its primary goal is to achieve carbon neutrality by 2050. This package covers around 15 different regulations and introduces deep reforms to the ETS, widening its scope to include sectors such as aviation and maritime.
Implementing CBAM and Reporting Requirements One significant change within the Fit for 55 Package is the Clean Border Adjustment Mechanism (CBAM), which replaces free allowances. CBAM places a carbon price on imported products from third countries to ensure that the EU imports goods with the same climate impact as domestically produced ones. The CBAM regulation entered into force in May, with a transitional phase for reporting and monitoring from October until the end of 2025.
In the initial phase, economic operators can choose between the EU method or the method used in their country of origin. However, they must prove the reliability of the chosen methodology. From 2025 onwards, the EU method will become mandatory.
The Net 0 Industry Act The Net 0 Industry Act is a policy aimed at attracting industry to the EU. It cannot be directly compared to the U.S.’s Inflation Reduction Act due to the EU’s decentralized nature. The EU relies on soft measures like coordination, fund access, and permitting processes, while Member States play a vital role in creating favorable taxation schemes and energy transition plans.
Biofuels and the Renewable Energy Directive The EU has set targets for the share of land-based biofuels, reducing it to 0 percent by 2030. Additionally, the use of advanced feedstocks that do not require land cultivation is encouraged. The EU’s policies on biofuels are part of a broader effort to transition to more sustainable alternatives.
Overlapping Policies Lastly, the Renewable Energy Directive (RED) and the ETS programs. The EU is working on aligning these policies, which will be further consolidated with the introduction of the cap-and-trade system for transportation fuels.
Key Takeaways In conclusion, here are a few takeaways:
The EU is implementing a comprehensive climate and energy package with ambitious goals
CBAM is a central component of this package, aiming to ensure imported products meet EU climate standards
The Net 0 Industry Act reflects the EU’s efforts to attract sustainable industries
Biofuels are evolving in the EU, with a shift towards advanced feedstocks and reduced reliance on land-based options
Policies like RED and ETS are becoming more interconnected as the EU strives for greater policy coherence
Businesses aiming to operate in or export to the EU should stay informed about these multifaceted policies and their implications for sustainability and compliance. As the EU continues to lead in climate action, understanding its evolving regulatory landscape is crucial for sustainable business strategies.
For more information about EU climate policies and programs, please contact Urszula Szalkowska at uszalkowska@ecoengineers.us. Urszula Szalkowska is based in Poland and is the managing director and senior consultant, Europe for EcoEngineers.
The following is an article originally published in July 2023, by CEP.
The Importance of Carbon Intensity and Compliance to Meet Decarbonization Goals
The road to net-zero for companies and society is long and requires a collaborative effort between policymakers, industry experts, and consumers. Incremental progress has been made in policy and the carbon markets through California’s Low-Carbon Fuel Standard (LCFS) and the Renewable Fuel Standard (RFS) but there’s plenty more that can and should be done. In her most recent article published in Chemical Engineering Progress (CEP), an American Institute of Chemical Engineers (AiChe) publication, Kristine Klavers details how the global supply chain can achieve this broad and ambitious goal of net-zero emissions by leveraging carbon markets, establishing credible carbon reduction, knowing your carbon intensity (CI) score, and monetizing carbon-reduction efforts.
Click the thumbnail above to read the full article.
A Renewable Fuels Entrepreneur Checklist: 10 Critical Factors for Project Success
Find out what early-stage renewable fuel, biochemicals, hydrogen, and CCUS project developers need to know to avoid pitfalls on their path to commercialization.
Far too many entrepreneurial renewable fuels, clean hydrogen, biochemical, and carbon capture, utilization, and sequestration (CCUS) firms never pass the finish line. Shifting markets, recessions, evolving and complex regulations, hiring managers with the appropriate experience, finding patient investors, and the difficulties associated with developing projects based on cutting-edge, unproven process technology present significant challenges.
Looking back upon the renewable fuels projects I have reviewed over the last 20 years, I see considerable repetition regarding issues that are often the cause of stumbles. My summary of the top 10 reasons for failure or lengthy delays, along with some suggestions for risk mitigation, are summarized below.
Underestimating Capital Cost (CapEx) and Operating Cost (OpEx)
Poor CapEx estimations are a common error for renewable fuel entrepreneurs. Some will start with a maximum project cost target that will still allow them to achieve an attractive return on investment (ROI) and assume that innovation, hard bargaining, excellent project management, and hard work will get them to that number. In addition, I have seen absolute faith in project capital cost estimates delivered by process technology providers or engineering firms delivering early-stage work — both of which have the incentive to lowball total installed cost estimates for projects.
This issue can usually be avoided by comparing the planned project to reasonable estimates of actual final costs for similar projects and using established total installed cost curves for all major project items, something that independent, experienced consultants can help entrepreneurs develop. Although they have downsides, asking for lump sum turnkey (LSTK) bids is another approach that can be used to firm up realistic total installed cost estimates.
Additionally, underestimating OpEx occurs frequently with new plants and novel processes. Common culprits are underestimating catalyst costs, operational labor requirements, or facility maintenance costs.
The solution: Engage experts early in the feasibility stage who have run similar facilities to get a dose of reality injected into the cost estimates.
Skipping Process Demonstration
For a new process technology, it’s essential to move from the pilot stage to an intermediate process demonstration stage before scaling to a commercial-scale facility. Otherwise, your first commercial run usually becomes a costly process development run. All established renewable fuel process development firms know this.
The record of entrepreneurial renewable fuels business development history is littered with the memories of firms that thought they could go directly from pilot plant runs to successful commercial design and then complete a quick start-up. This behavior is sometimes reinforced by their engineering, procurement, and construction (EPC) firm. Every entrepreneur should review the long history of successful and unsuccessful new process technology development for renewable fuel production. They also need to understand that process development and process scale-up are two different subjects.
Early-Stage Vetting of Carbon Intensity (CI)
Too many renewable fuels entrepreneurs delay having an expert run the correct Greenhouse gases, Regulated Emissions, and Energy use in Transportation (GREET) model(s) with the correct inputs early in their business development effort, only to find out that their actual CI is quite a bit higher than they originally expected. The relatively low cost of completing a few essential life-cycle assessment (LCA) runs is minimal compared to the millions of dollars that could be lost.
Supply and Offtake Agreements
I often see gaps between feedstock supply and offtake agreements that predict declining margins in the future. This can be and should be avoided. Entrepreneurs should engage experts who understand the intricacies of price basis indexes and who can provide defendable, scenario-based feedstock cost and product value price forecasts, as well as suggestions for hedging against margin shrinkage.
In addition, I have seen offtake agreements with durations of two to five years, when the payback for the investment will be much longer. Their ultimate lenders will not find that attractive.
Underestimating Project and Process Timelines
Full project schedules are often underestimated, sometimes by years. Get advice from a knowledgeable expert at an early stage in the project. Understanding the time requirements for permitting, environmental studies, geotechnical work, site preparation, and the local availability of all required construction skill sets is essential for developing a realistic estimate.
A seasoned project development professional will also be able to help entrepreneurs de-risk their project schedules.
Underestimating Production Volumes
Project developers often use optimistic projections of production volumes in their financial models and promotional materials. These volumes often never come to fruition.
The solution is to confer with process design and development experts and to base process yield expectations based on longer-term demonstration plant runs and rigorous heat and material balances.
Long-Duration Testing for Corrosion and Fouling
One of the typical problems for renewable fuels projects is that the project developers may not understand that high-impact fouling and corrosion issues may not show up for many weeks or even months after a first commercial demonstration test run has begun.
A demonstration run that lasts a week or two will usually not answer all the outstanding questions. Have an expert help set up and monitor your run. This will pay dividends in the long run.
Process Development, Project Management, Facility Management, and Operations Management
Owners should select process, project, facility, and operations managers that have proven, hands-on experience in the field of work. Proven experience with the core process technologies that will be used in the current project is a plus. Proven ability to select successful operations, maintenance, health, safety, environmental (HS&E), compliance, and planning supervisors is a necessity. If first-of-a-kind process technology is to be used, experience with going through a first-of-a-kind process start-up is a plus.
Understanding All Regulatory and Permitting Requirements
Too often, I have seen an owner get very close to a start-up and then suddenly realize that they could not sell their product to the intended parties or claim essential credits because of a lack of required approvals, inspections, reviews, etc. These planning oversights are sometimes the result of bad advice and sometimes it is simply an error of omission. Owners should consult with appropriate experts at an early stage in the project planning process to ensure a thorough review of all regulatory and permitting requirements is vetted and completed.
Material Balance Issues
A material balance is a quantitative accounting for all mass entering and leaving a process system, showing that the total weight entering a plant comes very close to the total weight going out. Building this balance is a method for ensuring that all products produced from a process system are accounted for.
I too often encounter or hear of a process development entrepreneur who, sometime during their first long-term demonstration run or first commercial-scale process run, is surprised by the behavior of a previously unaccounted-for-byproduct in their process.
The consequences are often significant. Some examples are (a) the discovery of significant fouling in or after a reactor or a process heat exchanger, (b) the underestimation of solvent, adsorbent, or catalyst consumption rates, or (c) the discovery that a compound, previously unaccounted for and eventually determined to be toxic, explosive, or a long-duration greenhouse gas (GHG), is off-gassing from a collected major liquid product, or a solid-phase reaction byproduct.
Many of these issues resulted in unfortunate consequences for the entrepreneurs. Nearly all could have been avoided if the process/project developers had invested in the proper measurement-enabling equipment and had taken the time to perform rigorous material balances during their pilot plant or process demonstration runs. However, for some entrepreneurs, this level of detail is often viewed as optional, too expensive, or simply unnecessary. For experienced process developers, closing material balances is a must.
EcoEngineers: Your End-to-End Guide
In summary, setting project costs, schedules, and performance expectations and making decisions based on the knowledge of individuals who have proven experience in the renewable fuels industry will prevent costly mistakes and delays. Choosing experienced personnel who know how to manage your entire EPC project phase, selecting and training your operations staff, and then starting up and operating your facility, will also be a wise investment.
This is why engaging proven regulatory and permitting experts like those at EcoEngineers early in the project cycle, to help guide you through the regulatory and permitting jungle, can save you millions in lost revenue.
We provide valuable services and capabilities to renewable fuels start-up companies with experience-based guidance to help them navigate the challenges of the industry. Whether it’s comparing project costs to realistic estimates or evaluating the feasibility of novel process technology and communicating that to your investors, we can help.
For more information about our Carbon Consulting services, please contact:
Andes Releases World’s First Microbial Carbon Mineralization Methodology
Andes, a carbon removal company focused on the generation of inorganic carbon in agricultural soils, has released the first-ever Microbial Carbon Mineralization (MCM) methodology, developed with EcoEngineers. This methodology is a critical milestone in setting a high standard for the promising new frontier of microbial mineralization.
Summary
The MCM methodology provides procedures to quantify the greenhouse gas (GHG) removals resulting from soil inorganic carbon (SIC) increases attributable to the usage of a microbial inoculant on agricultural fields. It provides guidance to quantify, report, and verify carbon dioxide removals (CDR) generated through these practices. The SIC gains from the specific microbial activity are measured and attributed to the credits through the specified monitoring protocol. Before the start of the project, the ability of the microbial inoculant to fix CO₂ from the atmosphere needs to be demonstrated in lab and field studies. Credits are determined by measuring the difference in SIC generation between fields treated with microbial inoculant and untreated fields (i.e., baseline scenario). This methodology, written in alignment with ISO 14064-2:2019, provides rules for eligibility, means of quantification, monitoring instructions, reporting requirements, and verification parameters.
Click on the image above to read the full methodology report.
Click here to read the announcement in the Carbon Herald.
Six Things Renewable Natural Gas Producers Need to Know About the Renewable Fuel Standard Set Rule
Want a more technical dive into the renewable natural gas (RNG) changes from the recently adopted Renewable Fuel Standard (RFS) Set Rule (“the Rule”)? For RNG producers, here is a summary of the changes and impacts on existing, in-construction, and planned RNG facilities for participation in the RFS to generate Renewable Identification Numbers (RINs). This latest RFS ruling will impact all RNG facilities participating in the RFS program.
All existing pathways will need to be amended and comply with the new RFS rule by Jan 1, 2025. For new pathways registered after July 1, 2024, they will need to immediately comply with the Rule. The major changes that will impact most RNG and biogas facilities include:
Registration Changes – The Rule requires the addition of the biogas producer to the RFS pathway. Now landfills and digesters will need to register with the U.S. Environmental Protection Agency (USEPA).
Reporting Changes – Biogas producers (digester or landfill) must begin regular reporting of raw biogas quantities and quality and compressed natural gas (CNG) dispense/RIN separator will also have new reporting requirements.
Virtual Gas Storage is Eliminated – Any gas storage must be done on-site. This will require very careful coordination between our RFS registration team, Quality Assurance Program (QAP) team, and the RNG producer. There is the potential to lose Renewable Identification Numbers (RINs) and revenue without this close coordination.
RIN Generation Process is Changing – RINs will now be generated upon pipeline injection and separated by the CNG dispenser instead of the current practice of generation and immediate separation. This may necessitate contractual changes between the RNG producer and the offtake partner.
Significant Measurement and Testing Requirement Additions – Facilities must now continuously measure flow and gas quality with a gas chromatograph (GC) for raw biogas and finished RNG. The Rule is very detailed about which American Petroleum Institute (API), American Society for Testing and Materials (ASTM), and USEPA standards must be used to collect this information. Many RNG producers do not have full GCs on raw biogas streams and this change will require them to add equipment. This is the most time-sensitive concern with the new Rule given lead times on meters/GC equipment.
D3/D5 RIN Split Methodology for Digesters – If digesters are co-digesting D3 and D5 materials, they can now likely get some D3 RIN value from the cellulosic feedstocks.
Weighing the Good with the Bad
The good news is that D3 RIN prices are up 50% since the Rule was released. The bad news? Existing, under-construction, and proposed biogas and RNG facilities will need to understand and comply with the new processes to register, generate RINs, report, and comply with RFS regulations.
There is much more detail and nuance to evaluate changes required for each facility and pathway, and this is a summary of several hundred pages of the Rule into six bullet points to get you started. Bottom line: if you have or are working on RNG projects that will generate RINs, these Rule changes will impact biogas and RNG projects and their development cycles going forward — and Eco is here to help you navigate these changes.
For more information about the RFS Set Rule or RNG services, please contact:
The transition to a clean energy future requires a solid grasp of global policies, technologies, and carbon markets. Our comprehensive training workshops, which include market outlooks and executive modules, help you effectively evaluate the impacts of climate-related risks on your business and maintain control over your environmental, social, and governance (ESG) goals. Understanding global policies, technologies, and carbon markets is critical to taking control of your environmental, social, and governance (ESG) goals. EcoUniversity provides comprehensive training workshops, market outlooks, and educational webinars that can be taken individually or bundled together to create a bespoke training program for your entire organization.
Training Workshops
EcoUniversity’s workshops are immersive and interactive, and led by our industry experts, both in-person and virtually. Our training modules can be tailored to meet the needs of your team, with focused discussion of your specific goals and challenges spanning low-carbon and zero-emission fuels, emerging mitigation and carbon removal technologies, policies and best practices for robust carbon markets, and carbon literacy.
Sample Workshops:
Low-Carbon Fuel Regulations
Low-Carbon Fuel Markets
Compliance Training
Life-Cycle Analysis with GREET
Fuel Market Project Development
Carbon Literacy Training
Custom Program Development
Market Outlooks
Our team has worked in the regulatory landscape for decades, analyzing data from two of the most influential low carbon fuels programs in the United States — the U.S. federal Renewable Fuel Standard (RFS) and the California Low Carbon Fuel Standard (LCFS). Our two annual outlooks and periodic updates give your business an advantage regarding regulatory changes occurring in your markets.
Educational Webinars
EcoUniversity’s webinars are attended by hundreds of industry experts and clean energy workers each month. We cover a wide range of topics, including carbon literacy, next frontiers for a renewable fuel, deep dives into new regulations, and more.
Insights From the New Federal Renewable Fuel Standard Set Rule
Our team at EcoEngineers has thoroughly reviewed the U.S. Environmental Protection Agency (USEPA) Renewable Fuel Standard (RFS) Set Rule Summary that was released on June 21, 2023. The Set Rule contains some good news for the renewable natural gas (RNG) industry, for biofuels markets and for project developers. Below are the key takeaways:
D3 RINs – 33% RVO increase and $0.60 price jump. The Cellulosic (D3) volumes were up 120 million renewable identification numbers (RINs) against the December proposal. This is a 33% increase over the 2022 mandate and is reflective of the enormous growth in RNG seen in this year’s RIN data, as many new RNG projects come online. D3 RINs prices surged 60 cents on the news.
No eRINs. The rule did not contain the option for biogas-based electric fuel (eRINs). EPA does state, “Given strong stakeholder interest in the proposed eRIN program and the range of potential benefits that the program could provide, EPA will continue to work on potential paths forward for the eRIN program. To that end, EPA will continue to assess the comments received.”
Biogas reform but greater expansion. Much of the biogas reform was in the final rule, and this does pave the way for biogas to be a feedstock for possible future eRIN implementation or other creative biofuels use. Biogas reform impacts RFS registration, ongoing compliance, RIN generation procedures, RIN separation processes, biogas/RNG storage, and other mechanics of how RINs are generated and reported.
Advanced biofuel and renewable fuel RVOs flat. Significantly, much of the proposed Renewable Volume Obligation (RVOs) stayed the same, but that is not a positive outcome for the biodiesel and renewable diesel market.
No growth for biomass-based diesel. Both the proposal and the final rule had very little room for growth in biomass-based diesel consumption. Many new renewable diesel plants have come online and more than 3 billion gallons of new capacity has been announced for startup by the end of 2025.
D4 RINs and soy oil prices fall. The market had been expecting a final rule to account for much higher annual growth, especially as demonstrated by the recent data. But with this final ruling, D4 RINs prices fell, and soy oil prices had a limit-down price drop.
Cellulosic waiver is out. Cellulosic waiver credits will not be available as a compliance mechanism for obligated parties during the years covered by this RVO (2023-2025) unless there is a future action to exercise the cellulosic waiver authority. If, for example, EPA reduces cellulosic volumes under the cellulosic waiver authority, than EPA also is required to make cellulosic waiver credits (CWCs) available. This will essentially remove the D3 market-driven price cap (CWC + D5 RIN) and the market will have to adjust.
D3/D5 split.EPA finalized, as proposed, specific equations to determine feedstock energy for when predominantly cellulosic and non-predominantly cellulosic feedstocks are simultaneously converted in anaerobic digesters. EcoEngineers can help calculate this split.
Bumpy road ahead. The new multiple year rule is designed to provide some medium-term policy stability to encourage investment and growth, but there are some catches and the roll-out may not be smooth.
The Numbers in the EPA’s Federal Renewable Fuel Standards Set Rule
*BBD volumes are given in billion gallons
More specifics:
The EPA’s rule has established volume requirements for future years, while retaining the authority to waive volumes if necessary.
The regulatory provisions for eRINs have not been finalized due to stakeholder comments and the complexity of the topics raised. However, the EPA will continue to work on potential paths forward for the eRIN program based on stakeholder interest.
Biogas reform includes provisions for using biogas as a biointermediate and RNG as a feedstock to produce biogas-derived renewable fuels. Biointermediate producers and renewable fuel producers must associate with each other to generate RINs for renewable fuels produced from biointermediates.
To enhance program simplicity and RIN integrity, the EPA is finalizing revisions to track the flow of RNG in the EPA moderated transaction system (EMTS). RNG producers will be the sole RIN generators for RNG injected into a natural gas commercial pipeline system. RIN separation will be allowed only for parties that demonstrate RNG use as transportation fuel.
Before the EPA accepts a registration submission, any biogas or RNG that is produced and stored must be stored on-site, under certain conditions.
Registration and reporting requirements have been updated, including the elimination of the need to submit contracts at registration. Real-time data in EMTS will reduce the reporting of affidavits and additional documentation.
The EPA has specified testing and measurement requirements for biogas and RNG production facilities, including measurement standards and certificates of analysis. QAP requirements have been revised for RNG producers, and third-party oversight enhancements have been implemented to ensure independence and impartiality.
The deadline for third-party engineering reviews for three-year updates will start after the 2023 update deadline, and RIN apportionment in anaerobic digesters will follow specific equations. The biomass-based diesel (BBD) conversion factor has been increased and separated food waste recordkeeping requirements have been modified to allow feedstock aggregators to hold records.
A bond requirement has been established for foreign RIN-generating renewable fuel producers and owners, and a definition of “produced from renewable biomass” is not being finalized at this time.
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