In a recent webinar hosted by EcoEngineers on September 10th, experts from EcoEngineers and the International Air Transport Association (IATA) focused on the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and the opportunities for sustainable aviation fuel (SAF). CORSIA is a global program that helps airlines reduce carbon emissions by using lower-carbon fuels, such as SAF, or purchasing carbon credits. SAF is made from renewable sources and must meet sustainability standards. Most airlines currently use credits, but SAF’s role is growing.
As EcoEngineers’ Managing Director Kristine Klavers said during the webinar, “SAF is the best-known lever we have to decarbonize aviation.” The goal is to make flying more sustainable.
The session concluded with a Q&A addressing various technical and regulatory aspects of CORSIA SAF and lower-carbon aviation fuel (LCAF). Below is a brief FAQ from the presentation. You can watch the webinar on demand here. Additionally, a more detailed look at the questions asked during the webinar will be published in the coming weeks.
What is CORSIA?
CORSIA is a global market-based mechanism developed by the International Civil Aviation Organization (ICAO) to achieve carbon-neutral growth in the aviation industry.
What is the main objective of CORSIA?
The primary objective of CORSIA is to achieve carbon-neutral growth within the aviation industry based on a baseline set according to the sector’s 2019 emissions.
How does CORSIA work?
CORSIA works by setting a baseline for emissions and requiring airlines to offset emissions that exceed this baseline through the purchase of offsetting credits or the use of CORSIA-eligible fuels.
Which countries participate in CORSIA?
CORSIA is implemented by member states of ICAO, which include 193 countries. Participation is voluntary until 2027, after which it becomes mandatory for certain states.
What happens if an airline does not comply with CORSIA?
Penalties for non-compliance are determined by the member states that implement CORSIA within their respective legal frameworks. These penalties can vary by country.
How are offsetting requirements calculated under CORSIA?
Offsetting requirements are calculated based on the emissions that fall within the scope of CORSIA for a given year, multiplied by the sectoral growth factor for that year.
What are CORSIA-eligible fuels?
CORSIA-eligible fuels include SAF and LCAF. These fuels must meet specific sustainability criteria and achieve a net reduction in greenhouse gas emissions of at least 10% compared to conventional aviation fuels.
What is the difference between SAF and LCAF?
SAF is made from renewable or waste-derived sources, while LCAF is fossil-based but produced with processes that reduce its life-cycle greenhouse gas emissions by at least 10%. Both must meet ICAO CORSIA sustainability criteria and be certified by approved schemes. The key difference is that SAF is renewable, whereas LCAF is an improved fossil fuel with stricter requirements due to its origin.
How is SAF certified under CORSIA?
SAF must be certified by sustainability certification schemes approved by ICAO, such as the International Sustainability and Carbon Certification (ISCC), the Roundtable on Sustainable Biomaterials (RSB), and ClassNK. The certification process ensures that the fuel meets the sustainability criteria and achieves the required emissions reductions.
What is the role of SAF registries?
SAF registries track the production and use of SAF to ensure traceability and prevent double-counting of emissions reductions. The CORSIA registry operated by the Civil Aviation Decarbonization Organization (CADO) supports both regulatory and voluntary frameworks.
How is life-cycle analysis (LCA) conducted for CORSIA-eligible fuels?
LCA for CORSIA-eligible fuels is conducted using a specific methodology prescribed by ICAO. The analysis calculates the greenhouse gas emissions reductions on a life-cycle basis, considering all stages of the fuel’s production and use.
Can new feedstocks be introduced into the CORSIA system?
Yes, new feedstocks can be introduced into the CORSIA system if they meet the sustainability criteria and achieve the required emissions reductions. Entities can apply for default values for new feedstocks through a procedure available on the ICAO website.
For more information about EcoEngineers, SAF, LCAF, and Renewable Diesel, contact:
By Edward Arnold, Asset Development Director, EcoEngineers
Every week, I read announcements about new, early-stage renewable fuel production projects. Many involve converting some novel feedstock—such as a new source of waste biomass or a new seed oil—into sustainable aviation fuel (SAF), renewable diesel, or hydrogen. Often, the core process technology, the technology provider, and the product slate are selected at a very early stage of the project.
When new project developers approach EcoEngineers for assistance with life-cycle analysis (LCA), pathway registration, compliance issues, price forecasts, or market studies, we sometimes find that the project planning process was relatively weak.
We see that the project’s process technology is chosen without thorough due diligence and a comparison of alternatives. Once we understand the project, often, our opinion is that the developer did not select the best process technology and flow scheme to generate the highest ROI from their feedstock.
Sometimes, we discover that the project developer is relying on the total installed project capital cost estimates developed by the technology licensor to determine their project economics. These cost estimates are usually unrealistically too low.
We also see that the project developer is basing their product carbon intensity (CI) score on estimates provided by the technology licensor, or they estimated it themselves. These CI estimates are often unrealistically low as well.
Sometimes we learn that the prime feedstock is not viable in the client’s main target market because of blocking regulations.
Too often, we tell ourselves, “They should have conducted a project feasibility and project strategy development study, fully independent of the inputs and opinions from a process technology provider.”
Many of these projects run out of investor money before they get back on a realistic track to success.
During the post-mortem phase, I have been asked, “What should we have done differently?” My answer usually contains a variation of the following:
Evaluate the Technology: Don’t select a final process technology until you have evaluated the alternatives. Remember that the process performance yield and operability guarantees are what you should base your project financial analysis on, not the yields and operability claims that appear in a technology sales presentation.
Avoid Unproven Technology: Stay away from non-commercialized process technologies. Let someone else be the first licensor.
Watch Out for Supplier Cost Estimates:Don’t use a project capital cost estimate and a project completion time schedule estimate from a process technology supplier. They have too many incentives to low-ball the estimates. Develop the initial total installed capital cost estimates and project schedule estimates by working with independent technical consultants who have realistic data from actual similar projects.
Don’t Trust Technology Developer CI Scores: Avoid basing your project economics on product CI estimates from process technology suppliers. They have too many incentives to deliver an unrealistically low value, and it is unlikely their numbers were developed by LCA experts using the appropriate model. Have your product LCA analysis performed by a proven, independent LCA expert.
Perform In-depth Regulation Analysis: Do not assume that your renewable fuel production pathway will allow for sales in any market without performing an in-depth analysis of all the pertinent current regulations. Today’s regulatory frameworks are typically complex and are often in a state of transition.
Conduct Third-Party Validation: Have market experts check your credit value estimates and feedstock costs now and into the future.
EcoEngineers can help project developers with:
Life cycle analysis (LCA)
Pathway registration
Regulatory compliance
Market analysis and forecasting
Process technology selection (Best Available Technology)
Project economics development
Process Guarantee and Offtake/Supply Agreement reviews
Please reach out to me to discuss ways we can help you drive your projects forward.
This article was originally published by POWER Magazine on August 1, 2025.
Biogas doesn’t just offer a backup plan for tech companies seeking more power; it provides a blueprint for sustainability. By transforming landfill, agricultural, and wastewater emissions into usable power, biogas solves two problems at once: it reduces fugitive methane emissions, a potent greenhouse gas (GHG), and generates renewable electricity. This is energy that’s good for business and better for the planet.
As artificial intelligence (AI) and cloud computing expand rapidly, so does the electricity demand of data centers. These digital nerve centers consumed about 4.4% of total U.S. electricity in 2023, and could use up to 12% of total U.S. electricity by 2028, according to a U.S. Department of Energy (DOE) data center energy use report published in December 2024. In tech-heavy states like Virginia, data centers account for more than 25%of total power consumption, according to an EPRI white paper. With projections indicating an additional 325 to 580 terawatt-hours (TWh) of demand by 2028, the industry urgently needs scalable, low-carbon solutions.
Produced through the anaerobic digestion of organic waste, biogas can be converted into electricity at or near the point of generation, such as at landfills, farms, or wastewater treatment plants. These distributed generation assets offer a reliable, renewable alternative to fossil-based grid electricity and can be deployed at a relatively higher speed to market than traditional generation facilities.
There is a renewed opportunity to pair waste management with power demand. Data centers, if they want always-on, renewable electricity, can source it from biogas projects that also help communities manage waste more sustainably.
From Waste to Watts
Biogas typically contains 45% to 70% methane, with the remainder composed mostly of carbon dioxide (CO2) and trace amounts of other gases like hydrogen sulfide, nitrogen, and water vapor. When burned in a generator, biogas can produce baseload electricity with capacity factors comparable to fossil-based natural gas, but without the climate penalty. Biogas projects deliver dual environmental benefits: avoiding methane emissions from waste and displacing fossil energy. Methane is 25 to 80 times more potent as a GHG gas than CO2 over a 20-year horizon.
The U.S. hosts approximately 2,500 operational biogas systems, with the potential to add another roughly 17,000 sites, which is enough to generate about 194 million megawatt-hours (MWh) annually and displace the CO2equivalent of removing 2.6 million cars. Despite this promise, progress is slowed by limited long-term power purchase agreements (PPAs) and waning renewable credits.
Biogas vs. Other Energy Sources
When comparing clean energy options for data centers, the choice isn’t just about which fuel has the lowest emissions—it’s about balancing emissions, cost, scalability, reliability, and speed to market. Biogas stands out as a carbon-smart, cost-effective, and rapidly deployable solution that can reduce reliance on centralized fossil fuel infrastructure, while also supporting rural economies by creating jobs and revenue streams for farmers, landowners, and municipal wastewater treatment facilities.
Biogas engines operate 24/7, making them a vital asset that is essential for maintaining data center uptime. Additionally, co-located biogas projects can serve as microgrids capable of islanding during grid-wide events. Low-impact interconnections mean less dependence on new transmission, a persistent bottleneck in many regional grids.
Biogas is available now, and projects can be completed in as little as six to 18 months, often utilizing existing infrastructure such as landfill methane capture systems or wastewater treatment plants. Feedstocks for biogas—like municipal food and organic waste, agricultural residues, animal manure, sewage sludge, and green waste—are plentiful and widely available in both urban and rural areas. With carbon emissions of about 50 grams of CO2e/kWh, biogas can even reach carbon-negative levels when methane capture benefits are fully considered.
Additionally, the waste-to-energy pathway offers several benefits. It decreases methane emissions from decomposing organic waste, replaces fossil fuels, provides consistent base or peak power, helps reduce landfill volumes, supports local employment, and allows wastewater facilities to recover energy, heat, and revenue from sludge treatment.
Cost is another differentiator. At about $0.07 per kWh, biogas is competitive with other sources and is dispatchable around-the-clock power, which is critical for data centers that demand uninterrupted uptime.
Table 1 compares key attributes of major power sources used in or proposed for data center applications. Biogas may not top the list in every category, but its combination of low emissions, reasonable cost, and fast deployment makes it a compelling transitional—and in many cases, long-term—solution for clean, resilient data infrastructure.
One example is the Pennsylvania-New Jersey-Maryland Interconnection (PJM), a regional transmission organization (RTO) that serves 65 million customers from Illinois to the mid-Atlantic. The PJM obtains about 48% of its power generation capacity from natural gas, with coal and nuclear each accounting for 21%. The capacity auction for 2025–2026 reached approximately $14.7 billion, an eightfold increase driven largely by data center demand spikes and generator retirements. This led to capacity clearing prices topping $269.92/MW-day, compared to just $28.92/MW-day the year prior.
AI-heavy data centers are stressing grid operations. The U.S. Energy Information Administration (EIA) projects power demand will rise to 4,193 billion kilowatt hours (kWh) in 2025 and 4,283 billion kWh in 2026 from a record 4,097 billion kWh in 2024. Grid operators warn that without fast new capacity, reliability and rates will suffer. Biogas deployment now could alleviate future shortfalls, especially in zones like Virginia and New Jersey, where interconnection barriers have slowed renewable uptake.
Not Just Local: Aggregating Biogas Distribution
Data centers don’t necessarily need to sit next to a digester to benefit from biogas electricity. Through virtual power purchase agreements (VPPAs) and grid-connected systems, electricity from multiple biogas sites, such as landfills or dairies, can be aggregated and matched to a facility’s energy use, regardless of location.
This approach, already common in wind and solar markets, is gaining traction for firm renewables like biogas. In a typical VPPA, a developer or energy aggregator bundles output and environmental attributes (like renewable energy credits, or RECs) from several smaller biogas projects. Corporate buyers, including data centers, then contract for this power virtually, receiving the emissions benefits without requiring direct physical delivery.
Utilities often play a supporting role by managing interconnection, dispatch, and, in some cases, offering green tariff programs, utility-led clean power options for large customers. While aggregating biogas involves more complexity than wind or solar due to smaller project size and feedstock variability, new tools like digital REC tracking and lifecycle-based credit systems are making it increasingly viable. Ultimately, aggregation helps scale biogas from a local waste solution into a grid-integrated, low-carbon energy source capable of serving the demands of the digital economy.
Biogas Across the U.S.
To better understand the national scale and potential of biogas electricity, it’s helpful to visualize where current biogas projects operate and where new ones could be developed. The American Biogas Council offers two compelling charts that map the distributed power potential of organic waste. The first is a market snapshot map (Figure 1), illustrating both existing and untapped sites across all 50 states, highlighting opportunities in places like Pennsylvania, California, and the Midwest. The second map (Figure 2) shows more than 2,300 active biogas projects, including landfills, farms, and wastewater treatment plants. Together, these visuals reinforce that biogas is not just a niche solution, but a scalable, distributed, and ready-to-deploy asset in the clean energy transition.
1. Existing and untapped biogas sites across all 50 states. Courtesy: American Biogas Council
2. There are more than 2,300 active biogas projects in the U.S. Courtesy: American Biogas Council
Policy and Market Challenges
Despite its promise, biogas-to-power remains disadvantaged by a lack of policy and market parity with other renewables. Technologies like solar and wind benefit from longstanding tax credits, favorable project financing, and inclusion in most renewable portfolio standards (RPS). Biogas, by contrast, is often excluded from those frameworks or limited in scale and credit eligibility.
At the federal level, this landscape is changing. The Inflation Reduction Act (IRA) extended the Investment Tax Credit (ITC) and Production Tax Credit (PTC) to include biogas systems under Section 48E. According to the DOE, these credits now offer up to a 30% baseline incentive, with stackable bonuses for domestic content, prevailing wages, or location in energy communities. Additionally, the Section 45Z Clean Fuel Production Credit, which went into effect this year, provides performance-based incentives for clean fuels like renewable natural gas (RNG), including electricity generated from agricultural waste such as dairy manure.
The recently enacted One Big Beautiful Bill Act (OBBBA) maintains many of these key incentives and reinforces federal support for the biogas sector. Industry stakeholders have noted that the bill helps provide much-needed stability and planning certainty for developers by continuing support for clean fuel production and biogas-to-power projects.
Together, the provisions in the IRA and OBBBA represent the most comprehensive federal support to date for biogas development. This policy foundation enables continued growth of projects that turn waste into low-carbon energy while supporting rural economies and climate goals.
Additionally, several state-level programs also recognize the unique environmental value of biogas, though eligibility varies widely. In California, its Low Carbon Fuel Standard (LCFS) offers performance-based credits for biogas used as a transportation fuel or to displace fossil energy, and the state’s Energy Commission provides grants for biogas infrastructure, and research and development (R&D). Illinois offers property tax exemptions and energy consumption tax incentives through the state’s Clean Energy Jobs Act. New Mexico and Oregon include landfill gas and manure digesters in their net metering and public purpose funding programs, respectively. And in Pennsylvania, biogas qualifies under the state’s Alternative Energy Portfolio Standard (AEPS) as a Tier I renewable, encouraging utilities to purchase power from qualified biogas facilities.
However, many regions still lack the robust policy frameworks needed to incentivize smaller or distributed biogas projects, particularly those focused on electricity rather than pipeline-injected RNG. Standardized crediting systems, like the LCFS model in California or lifecycle-based performance metrics, could help address this gap by rewarding both the climate impact (methane abatement) and resilience value (dispatchable baseload power) of biogas systems. Expanding these frameworks to explicitly support electricity use by high-demand sectors, such as data centers, could further accelerate adoption by aligning incentives with the growing need for resilient, low-carbon baseload power.
Looking Ahead
Biogas may not be the largest renewable source, but it’s uniquely positioned to meet near-term baseload demand with low-carbon, reliable, and dispatchable power. In the regions managed by grid operators, with capacity constraints tight and emissions targets firm, biogas-to-electricity offers one of the fastest, lowest-risk paths to decarbonization for data center infrastructure. By linking societal waste with server workloads, this model not only cleans the planet, but it also powers its future. Furthermore, biogas aligns with the current administration’s goals for energy dominance by reducing dependence on imported fuels, lowering emissions, and offering a reliable energy source at a cost-effective price. It turns waste into a strategic asset, supporting domestic energy security, environmental resilience, and infrastructure stability—a true win-win-win.
As climate regulations evolve, consumer expectations shift, and global carbon markets expand, the need for life-cycle analysis (LCAs) has never been greater. LCAs have emerged as a cornerstone methodology for evaluating the environmental impact of products, services, and systems throughout their life cycle, from inception to end-of-life. Understanding and implementing LCAs is crucial for businesses to stay ahead in these changing times.
For professionals seeking to deepen their understanding and application of LCAs, EcoEngineers’ LCA Academy 2025, taking place in Houston, Texas, on October 7–8, 2025, offers a timely and immersive learning opportunity.
Here are the top five reasons why attending this two-day event should be a priority for sustainability professionals, LCA practitioners, compliance officers, and industry leaders alike.
Immersive Learning Experience
The LCA Academy is designed to move beyond theory and into practice. Attendees will explore the full life-cycle of products, from raw material extraction to end-of-life disposal, and learn how to quantify environmental impacts such as carbon emissions, water use, land-use change, and more. The program emphasizes real-world applications, including how to prepare carbon intensity (CI) scores using leading standards and guidelines. Whether you’re new to LCA or looking to refine your skills, the LCA Academy provides a structured, immersive learning environment to build practical expertise.
Navigate the Regulatory Landscape with Confidence
Sessions will cover how LCAs are used in regulatory and compliance with frameworks such as Scope 1, 2, and 3 emissions reporting, environmental product declarations (EPDs), environment, social, and governance (ESG) disclosures, climate action plans, and corporate sustainability reporting. Attendees will also gain insight into how LCAs support participation in voluntary carbon markets (VCMs) and help organizations align with evolving tax credit and incentive programs. For example, the recent passage of the One Big Beautiful Act (OBBBA) introduces implications for renewable fuel producers, hydrogen developers, and carbon capture operators, with LCAs underpinning the determination of CI scores and tax credit eligibility. In addition to the OBBBA, insights into regulations shaping the global marketplace, such as the U.S. Renewable Fuel Standard (RFS), Europe’s Renewable Energy Directive (RED), and Canada’s Clean Fuel Regulations (CFR) and provincial regulations, to name a few, will also be discussed. This regulatory deep dive equips participants to anticipate changes and position their organizations for long-term success.
Learn From Industry-Leading Experts
EcoEngineers, recently acquired by LRQA, brings together a team of scientists and consultants who have conducted over 1,000 carbon LCAs since 2015. For example, we used LCAs to help H2B2 navigate the complex application and registration process under California’s Low Carbon Fuel Standard (CA-LCFS) program. This year, we’re teaming with LRQA to bring together expertise from both organizations. LRQA is a leading global assurance partner and brings together decades of sector-specific expertise, data-driven insight, and on-the-ground presence to help you navigate a new era of risks and opportunities.
Expert Insights and Networking
The LCA Academy fosters a collaborative learning environment where professionals from diverse sectors can share experiences, challenges, and best practices. Through workshops, panel discussions, and informal networking opportunities, attendees will engage in meaningful dialogue with peers who are also navigating the complexities of carbon accounting and sustainability reporting. This peer-to-peer exchange not only enhances learning but also helps build a professional network that can support ongoing LCA implementation efforts.
Stay Ahead in a Changing Market
As climate regulations continually evolve, understanding and implementing LCAs is crucial for organizations to comply with regulations, monetize tax incentives, and participate in VCMs. The LCA Academy agenda reflects this urgency, with sessions focused on deploying energy transition technologies, improving operational efficiency, and aligning with ESG goals. By attending, participants will gain the tools and insights needed to make informed decisions, reduce environmental impact, and drive innovation within their organizations.
Whether you’re an executive looking to shape policies or a practitioner seeking hands-on experience, EcoEngineers LCA Academy 2025 is a valuable investment in your professional development and environmental impact.
Click here to register for the EcoEngineers LCA Academy 2025.
To learn more about EcoEngineers’ LCA expertise and capabilities, CLICK HERE.
About EcoEngineers
EcoEngineers, an LRQA company, is a consulting, auditing, and advisory firm exclusively focused on the energy transition and decarbonization. From innovation to impact, EcoEngineers helps its clients navigate the disruption caused by carbon emissions and climate change. 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. For more information, visit www.ecoengineers.us.
The ethanol industry is undergoing significant shifts, particularly pertaining to carbon intensity (CI) reduction, feedstock and technology innovations, and evolving federal tax incentives. In a recent webinar hosted by EcoEngineers, Laith Amin, vice president, Growth and Development, McCord Pankonen, managing director, North America Biofuels, Juan Vargas Ramirez, Ph.D., account manager, North America Biofuels, and Logan Leduc, manager, Life-Cycle Analysis, discussed the latest industry trends gleaned from the 2025 Fuel Ethanol Workshop (FEW) held in Omaha, Nebraska on June 9-11.
This article highlights key topics discussed in the webinar, including the latest on the Section 45Z Clean Fuels Production Tax Credit, energy attribute credits (EACs), as well as corn and sorghum kernel fiber conversion.
Impact of Section 45Z and EACs
With uncertainty around the Section 45Z tax credit building ahead of this year’s FEW, the One Big Beautiful Bill Act (OBBBA) was eventually signed into law on July 4, 2025. The bill resulted in significant changes to Section 45Z, including:
Extended Availability: Originally, Section 45Z was scheduled to expire after December 31, 2027. The OBBBA extends the Section 45Z credit through December 31, 2029.
Feedstock Sourcing Requirements: After December 31, 2025, qualifying fuel must be produced from feedstocks sourced from the United States (U.S.), Mexico, or Canada.
Emissions Rate Determination: The OBBBA provides clarity on the determination of emissions rates, excluding emissions attributed to indirect land-use change (ILUC). The U.S. Treasury is directed to provide distinct emissions rates for fuels derived from animal manure.
No Double Credit: The OBBBA clarifies that a taxpayer cannot claim the Section 45Z credit for fuel produced from a fuel that has already generated a Section 45Z credit.
Foreign Entity Restrictions: The OBBBA incorporates restrictions related to Specified Foreign Entities (SFE) and Foreign-Influenced Entities (FIE), applying the SFE prohibition for tax years beginning after enactment and the FIE prohibition for tax years beginning two years after enactment.
Ethanol producers recognize the importance of accurate CI calculations and robust documentation to mitigate risks and ensure compliance. Tracking and validating data, through accredited third-party verifiers, is essential for reducing underwriting costs, insurance, and maximizing the benefits of the Section 45Z tax credit.
EACs, particularly renewable energy credits (RECs), a type of EAC, are also key factors in enabling producers to offset carbon emissions by purchasing credits from renewable energy sources. The timing and quantity of renewable energy production can be challenging, especially for facilities operating 24/7. The impact of RECs on CI scores varies based on the grid’s emissions factor and a facility’s energy consumption. Producers must evaluate the cost-effectiveness of RECs and other renewable energy options to ensure a favorable return on investment.
Kernel Fiber Ethanol and ASTM E3417-25 Method Update
Interest in kernel fiber conversion remains high within the ethanol producer community. Under the Renewable Fuel Standard (RFS), kernel fiber ethanol offers access to higher-value D3 Renewable Identification Numbers (RINs), compared to D6 RINs for starch ethanol, due to its lower CI score. Producers should remain informed about the latest biotechnological advancements and regulatory updates to capitalize on this opportunity.
The United States Environmental Protection Agency’s (USEPA) approval of methods to measure kernel fiber conversion has led to more than 120 ethanol producer registrations for this pathway. The USEPA’s latest update to the American Society for Testing and Materials (ASTM) E3417-25 method, which determines the kernel fiber converted fraction from blends of corn and up to 69% sorghum, and the National Renewable Energy Laboratory (NREL) method issued in 2021, open up opportunities for ethanol producers to contribute significantly to the cellulosic biofuels mandate.
Although renewable natural gas (RNG) dominates the D3 category, with over 90% of RINs, the USEPA’s proposed revision to decrease the D3 RINs set for 2025 underscores the need for increased participation from ethanol producers. Demonstrating the capacity to produce cellulosic ethanol can help prevent further revisions and showcase the ability of the ethanol industry to help meet regulatory requirements.
In response to the latest ASTM E3417-25 method update, the USEPA requires ethanol producers with an approved in-situ kernel-fiber-to-ethanol pathway and using the ASTM method to measure the kernel fiber converted fraction and submit an engineering review addendum performed by a third-party professional engineer. This is particularly important as these producers approach their next kernel fiber converted fraction recertification. Ethanol producers must update their engineering reviews to reflect the use of the new ASTM method, regardless of feedstock.
EcoEngineers has supported more than 30 ethanol facilities in registering in-situ D3 kernel fiber pathways and provides Quality Assurance Programs (QAP) for those requiring Q-RIN status.
Summary
The ethanol industry is at another pivotal moment: production margins are thin, accentuating the importance of CI reduction as a strategy to improve federal tax incentive value.
To improve risk/return profiles, Biofuel producers must continue to focus on accurate data management, understanding their EAC options, and market diversification (e.g., kernel fiber ethanol). Staying informed on regulatory changes and technological advancements will also be crucial for navigating challenges and seizing growth opportunities. The inclusion of new feedstock options, such as sorghum, along with improved measurement methods, signals progress. Compliance with updated standards and active contributions to the D3 RIN category will help shape the future of ethanol. These ongoing advancements highlight the dynamic nature of the ethanol industry and the potential for significant innovation and growth.
For more information about our North America Biofuels services and capabilities, contact:
EcoEngineers, an LRQA company, is a consulting, auditing, and advisory firm exclusively focused on the energy transition and decarbonization. From innovation to impact, EcoEngineers helps its clients navigate the disruption caused by carbon emissions and climate change. 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. For more information, visit www.ecoengineers.us.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, reshaping the U.S. clean energy tax credit landscape. While the Inflation Reduction Act (IRA) of 2022 introduced broad, long-term incentives for clean energy deployment and manufacturing, OBBBA narrows the scope, introducing new restrictions, phasing out key credits, and tightening compliance with a focus on national energy dominance and domestic sourcing. For renewable fuel producers, hydrogen developers, and carbon capture operators, the implications are significant.
EcoEngineers is uniquely positioned to help stakeholders navigate this transition. We offer compliance audits to protect credit eligibility, GREET-based lifecycle modeling for Sections 45Z, 45V, and 45Q, and credit transfer structuring under the new restrictions. We can also provide policy impact reviews tailored to your fuel or energy portfolio.
Link here to a summary of the changes and key actions to take to stay compliant and competitive.
Climate action and transition plans are important tools for organizations seeking to future-proof their operations and develop pathways to net-zero emissions, in alignment with global science-based targets. As environmental changes accelerate, businesses must proactively manage climate-related risks and opportunities to ensure long-term resilience and profitability. Responding to climate risk and opportunities is especially critical for companies operating globally in jurisdictions that mandate climate-related disclosure, as it is key to maintaining operational continuity and supply chain stability. Enhancing climate risk assessment is no longer just a compliance requirement; it’s a strategic imperative for safeguarding financial performance and driving sustainable growth.
In a recent webinar hosted by EcoEngineers, an LRQA company, Dan Krekelberg, director, climate strategy at EcoEngineers, Thomas Zumbühl, associate director, advisory at LRQA, Ece Satar Pfister, senior consultant at LRQA, and Josh Bell, senior consultant at LRQA, discussed the importance of climate action planning and risk management, the evolving regulatory landscape, and practical approaches for organizations to navigate these challenges effectively.
Blueprint for Strengthening Climate Risk Management
Climate risk management is crucial for businesses as climate change disrupts supply chains, damages assets, and reshapes markets. The increasing frequency and severity of events like floods and wildfires, along with shifting regulations and evolving consumer expectations, pose significant risks. Effective climate risk management allows companies to anticipate these challenges, adapt operations, and protect financial performance. It ensures compliance with new laws, builds stakeholder trust, and fosters innovation and market opportunities, ultimately enhancing long-term resilience and competitiveness.
The global regulatory landscape is evolving rapidly, with more than 100,000 companies expected to disclose their climate-related performance in the next five years. This shift emphasizes materiality and transparency in sustainability reporting. Companies must clearly and consistently disclose risks and opportunities related to their environmental and social impact, adhering to emerging climate-reporting regulations, such as California’s Accountability Package (SB 253 and SB 261) and the EU’s Corporate Sustainability Reporting Directive (CSRD). Understanding these frameworks is critical for compliance, credibility, and long-term success.
Climate risk assessment is integral to effective climate risk management. It involves identifying and managing climate-related risks and opportunities to build trust and drive sustainable growth. The Task Force on Climate-Related Financial Disclosures (TCFD) framework provides recommendations on the information companies should disclose to help investors, lenders, and underwriters assess and price climate-related risks appropriately. The framework covers four areas: governance, strategy, risk management, and metrics and targets, aiding investors in understanding how organizations approach climate-related risks and opportunities.
Scenario analysis is a vital tool for preparing for the potential impacts of climate change on operations, strategy, and financial performance. It tests the resilience of an organization’s strategy against different climate-related scenarios, including a 2°C or lower scenario, helping organizations develop strategies to mitigate risks and seize opportunities. Conducting scenario analysis enables companies to better prepare for the future and ensure long-term resilience.
A comprehensive approach to climate risk assessment involves a multi-step process starting with scope analysis. Assessing 95 countries based on business leverage and climate vulnerability helps identify priority markets for deeper evaluation. Grouping these countries into tiers based on segmentation models allows for targeted risk management strategies. Key operational geographies like the United States (U.S.), the United Kingdom (UK), Canada, Brazil, and Australia often require focused attention due to their significant market impact.
Developing a global risk catalog is the next crucial step. Identifying material risks, including seven transition risks like carbon pricing, ESG customer requirements, and macroeconomic disruptions due to climate change, alongside five physical risks such as extreme weather events, provides a comprehensive risk profile. Recognizing climate-related opportunities, such as increased demand for sustainable products and material substitution, offers strategic advantages. This dual focus ensures a balanced approach to climate resilience.
Scenario analysis based on established frameworks like TCFD and Intergovernmental Panel on Climate Change (IPCC) guidance is essential for understanding potential future impacts. Assessing three transition scenarios—orderly net zero by 2050, disorderly delayed transition, and a hothouse world following current policies—across short, medium, and long-term timeframes (2030, 2040, and 2050) provides a robust foundation for strategic planning. Considering best, medium, and worst-case outcomes enables businesses to prepare for various futures, enhancing adaptability and resilience.
The final step is conducting a financial impact assessment. Qualitative prioritization of climate risk-related opportunities and tailored recommendations for mitigating critical risks are crucial for effective risk management. This approach not only protects businesses from the financial consequences of climate change but also improves financial resilience. Strengthening compliance with future climate-related reporting regulations positions companies ahead of current requirements, facilitating better investment and partnership decisions.
Companies evaluating climate risk under the TCFD framework are also positioned to align globally with mandatory and voluntary disclosure frameworks. In 2023, the International Sustainability Standards Board (ISSB) published a set of global sustainability standards, International Financial Reporting Standards (IFRS) S1 and S2 (ISSB Standards), which fully incorporate the recommendations of the TCFD. IFRS S1 and S2 also include elements of the industry-specific sustainability standards from the Sustainability Accounting Standards Board (SASB) and the GHG Protocol.
As of July 2025, thirty-six jurisdictions worldwide have adopted or are otherwise using the ISSB standards or are in the process of finalizing steps towards introducing them into their regulatory frameworks. This primarily includes countries, but also subnational jurisdictions, such as California’s SB 261, where reporting via the TCFD framework or IFRS standards can be used for compliance beginning January 1, 2026. To provide confidence in quality reporting to end users of the data, third-party verification and assurance of climate risk reporting is possible under existing standards and proposed auditing standards.
Summary
Climate action and transition planning have become a critical business imperative, demanding proactive measures to address climate-related risks and opportunities for resilience and long-term success. Effective management strategies enable companies to anticipate and adapt to challenges while safeguarding financial performance. Navigating the evolving regulatory landscape and conducting thorough risk assessments and scenario analyses are essential steps.
By integrating climate risk into strategic planning, businesses not only ensure future security but also position themselves as leaders in driving a sustainable global economy. A standardized approach to disclosure that includes comprehensive risk and financial impact assessment, coupled with third-party assurance, provides the quality data needed to effectively mitigate risks and unlock opportunities in a rapidly changing environment.
EcoEngineers: Your Guide to Effective Climate Action
EcoEngineers’ team of engineers, scientists, auditors, consultants, and researchers brings a multidisciplinary technical approach to administering, implementing, and supporting climate action initiatives, ensuring clients receive comprehensive and tailored solutions that fit their specific climate resilience and net-zero goals.
To learn more about our climate action planning expertise, click here.
For more information about how EcoEngineers can support your climate action and resilience efforts, contact:
EcoEngineers, an LRQA company, is a consulting, auditing, and advisory firm exclusively focused on the energy transition and decarbonization. From innovation to impact, EcoEngineers helps its clients navigate the disruption caused by carbon emissions and climate change. 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. For more information, visit www.ecoengineers.us.
By Lisa Hanke, Director, Regulatory Engagement, EcoEngineers
On June 13, 2025, the U.S. Environmental Protection Agency (USEPA) released the proposed Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS) for 2026 and 2027, with a partial waiver of the 2025 cellulosic biofuel volume requirement, and other changes. Stakeholders are invited to send comments on or before August 8, 2025.
The USEPA’s proposal reflects a deliberate approach—one that aims to support domestic biofuel and feedstock production while discouraging imports and clarifying compliance expectations.
EcoEngineers is closely tracking the USEPA’s RFS rulemaking process and how it impacts renewable fuel producers and markets. Our team of experts is here to help you navigate these proposed changes through tailored education, stakeholder engagement, regulatory advisory, and compliance management services. Whether you’re a fuel producer, importer, or obligated party, we’re ready to support your success in this dynamic regulatory environment.
Below, we break down the key elements of the proposal.
Volume Targets: New Growth, New Metrics
The USEPA proposes to express biomass-based diesel targets in Renewable Identification Numbers (RINs) rather than gallons, using a conversion factor of 1.6 RINs per gallon. While this shift aligns biomass-based diesel with other fuel categories, the overall volume growth is modest (Table 1). Cellulosic biofuel volumes show only slight increases from 2025 to 2027 and remain below the original 2025 targets. Implied conventional renewable fuel targets remain flat at 15 billion gallons, while total renewable fuel volumes inch upward from 22.33 billion RINs in 2025 to 24.46 billion in 2027.
Table 1: RFS Volume Requirements for 2023-2027 (Billion RINs)a
Source: USEPA
Notes:
a One RIN is equivalent to one ethanol-equivalent gallon of renewable fuel.
b USEPA originally established a cellulosic biofuel volume requirement of 1.09 billion gallons for 2024 in the Set 1 Rule. USEPA subsequently reduced this volume requirement to 1.01 billion RINs in a separate action.
c USEPA originally established a cellulosic biofuel volume requirement of 1.38 billion gallons for 2025 in the Set 1 Rule. The USEPA is proposing to reduce this volume requirement to 1.19 billion RINs in this action.
d Through 2025, the BBD volume requirement was established in physical gallons rather than RINs. The USEPA is proposing to specify the BBD volume requirement in RINs, consistent with the other three renewable fuel categories, rather than physical gallons. For the sake of comparison, the USEPA converted the BBD volume requirements for 2023–2025 from physical gallons to RINs using the BBD conversion factor in 40 CFR 80.1405(c) of 1.6 RINs per gallon.
e The total renewable fuel volume requirement for 2023 does not include the 0.25 billion RIN supplemental standard.
The USEPA finalized a partial waiver for the 2024 cellulosic biofuel requirement, reducing the target from 1.38 billion to 1.19 billion RINs. This follows a similar adjustment for 2025 and reflects market saturation and ongoing production delays in the cellulosic sector.
Key Policy Changes and Clarifications
Import RIN Reduction: To reduce reliance on foreign feedstocks and mitigate fraud risks, the USEPA proposes a 50% reduction in RIN value for imported renewable fuels and fuels made from foreign feedstocks. This change would apply starting in 2026 and includes new reporting and liability provisions for importers and domestic producers.
Removal of Renewable Electricity: The USEPA proposes to remove renewable electricity as a qualifying fuel under the RFS, citing its limited role in displacing fossil fuels in transportation.
Adjusted Equivalence Values: To better reflect fossil-derived hydrogen content, the USEPA proposes new equivalence values: 1.6 for renewable diesel and jet fuel, and 1.4 for renewable naphtha. Producers may still apply for alternative values.
RIN Generation Timing: The proposal clarifies when RINs must be generated, depending on the fuel type and production location. For gaseous fuels like renewable natural gas (RNG) and compressed or liquified natural gas (CNG/LNG), RINs must be generated within five business days of meeting all requirements.
Biodiesel Use Restrictions: Reinforcing the program’s focus on transportation fuels by proposing RINs cannot be generated for pure or neat biodiesel used for process heat or power generation.
Expanding and Refining Fuel Pathways
The USEPA proposes to add new pathways for naphtha and liquefied petroleum gas (LPG) derived from biogenic waste oils, and to clarify existing pathways with more precise language. Two new biointermediates—activated sludge and converted oils—are also proposed for inclusion.
Compliance and Oversight Enhancements
Small Refinery Reporting: Even if exempt from RFS obligations, small refineries would still be required to file annual compliance reports and address any carried-over deficits.
Auditor Registration: Third-party auditors would only need to renew their registration every two years instead of annually, reducing administrative burden.
Engineering Review Site Visits: Site visits must occur within six months of submitting a registration request to ensure accuracy and relevance.
Biogas Regulatory Reform Updates
The USEPA also proposes to allow biogas batches to be defined by calendar month and to expand approved measurement and calibration methods for RNG and biogas. These updates aim to align regulatory requirements with industry practices and improve data accuracy.
About the Expert
Lisa Hanke, director, regulatory engagement at EcoEngineers, has worked in the renewable fuels space for more than 18 years. Ms. Hanke led government relations and regulatory outreach in the U.S. Europe and Canada. She has extensive experience with the Renewable Fuel Standard (RFS), California’s Low Carbon Fuel Standard (LCFS), the Renewable Energy Directive (RED), the Renewable Transport Fuel Obligation (RTFO) and she closely follows the Canadian Clean Fuel Regulation (CFR) and a variety of other carbon programs across the world. Ms. Hanke was responsible for evaluations of policy, regulatory engagement, compliance, and life-cycle analysis (LCA). She has also sat on the board of directors for the Advanced Biofuels Association of Canada, the Advanced Biofuels Business Council, and the Leaders of Sustainable Biofuels.
For more information about EcoEngineers’ Regulatory Engagement and/or Compliance Management services and capabilities, contact:
EcoEngineers, an LRQA company, is a consulting, auditing, and advisory firm exclusively focused on the energy transition and decarbonization. From innovation to impact, EcoEngineers helps its clients navigate the disruption caused by carbon emissions and climate change. 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. For more information, visit www.ecoengineers.us.
In a landmark move for climate policy and international carbon markets, the European Union (EU) and the United Kingdom (UK) recently announced their commitment to Emissions Trading Systems (ETS).
The decision, announced at the EU-UK Summit in May, marks a significant step toward greater regulatory alignment and climate cooperation post-Brexit. For companies and stakeholders engaged in hard-to-abate heavy industries like cement, steel, aluminum, and paper, the agreement seeks to enhance market efficiency, reduce compliance costs, and strengthen climate ambition through coordinated emissions caps and mutual recognition of allowances.
The EU’s ETS, launched in 2005, is the world’s largest carbon market and a cornerstone of the EU’s climate strategy. Following Brexit, the UK established its own ETS in 2021, closely modeled on the EU’s framework but operating independently.
This linkage of an ETS between different jurisdictions is not without precedent. The EU previously linked its ETS with Switzerland’s in 2020, demonstrating the feasibility and benefits of cross-border carbon market integration. However, the EU–UK linkage is far more consequential due to the scale and economic interdependence of the two regions.
The technical and legal work to operationalize the EU-UK ETS linkage is expected to begin immediately, with a target implementation date in 2026.
Key Objectives and Provisions
The primary goal of linking the EU and UK ETS is to enhance the cost-effectiveness and efficiency of emissions reductions. By allowing mutual recognition of allowances, companies in both jurisdictions can trade emissions permits across borders, increasing market liquidity and price stability. The agreement also aims to:
Ensure a level playing field for businesses operating in both markets.
Strengthen climate ambition through coordinated cap-setting and compliance mechanisms.
Facilitate long-term investment in low-carbon technologies by providing regulatory certainty.
Both parties have committed to respecting each other’s regulatory autonomy while aligning key design features such as cap trajectories, auctioning rules, and monitoring, reporting, and verification (MRV) standards.
Implications for Industry and Stakeholders
For regulated entities, the linkage offers several advantages. First, it expands the pool of available allowances, potentially reducing compliance costs. Second, it harmonizes carbon pricing signals, reducing the risk of carbon leakage and competitive distortions. Third, it simplifies compliance for multinational firms operating in both the EU and the UK.
However, the integration also introduces new complexities. Companies will need to stay informed of evolving rules and ensure their internal compliance systems can accommodate cross-border trading. Market participants should also anticipate increased scrutiny from regulators as the linked system will require robust oversight to maintain environmental integrity and prevent fraud.
Impacts on the EU’s Carbon Border Adjustment Mechanism (CBAM)
The EU’s Carbon Border Adjustment Mechanism (CBAM), which entered its transitional phase in October 2023 and will last until the end of 2025, is designed to prevent carbon leakage by imposing a carbon price on imports of certain goods from countries with less stringent climate policies. Once fully implemented in 2026, CBAM will require importers to purchase certificates reflecting the carbon price that would have been paid had the goods been produced under the EU ETS.
The planned linkage between the EU and UK ETS could exempt UK exporters from CBAM obligations, assuming the UK’s carbon pricing is deemed equivalent to the EU’s. This would streamline trade between the two regions and reduce administrative burdens for businesses operating across borders.
However, such an exemption is not certain. The EU will need to assess the UK ETS’s alignment with EU standards, including cap stringency, MRV protocols, and enforcement mechanisms. If the linkage is successfully implemented and maintained, UK exporters of CBAM-covered goods—such as steel, cement, and aluminum—could avoid double carbon pricing and maintain competitiveness in the EU market.
For companies in both jurisdictions, this underscores the importance of staying informed on both ETS and CBAM developments. The intersection of these policies will shape compliance strategies, supply chain decisions, and long-term investment planning.
Opportunities for Innovation and Leadership
The EU-UK ETS linkage opens the door for innovation in carbon finance, digital MRV (dMRV) solutions, and cross-border emissions accounting. Companies that proactively invest in emissions reductions and carbon market intelligence will be better positioned to capitalize on arbitrage opportunities and demonstrate climate leadership.
Moreover, the linkage could serve as a model for future international cooperation. As more jurisdictions consider carbon pricing, the EU-UK framework may inform global efforts to create a network of interoperable carbon markets.
Reform of the EU ETS
The linkage of the EU and UK cap-and-trade systems coincides with the announced review of the EU ETS. A review of some of the system’s elements is due by 2026 and will include an assessment of whether additional policies are needed to reach those targets. The Market Stability Reserve (MSR), which helps regulate the structural supply and demand of allowances, is also due for review by 2026. Both the EU ETS and the MSR are currently being evaluated to inform these reviews.
As part of the 2023 revisions of the ETS Directive, the monitoring and reporting of emissions was launched in 2025. Throughout 2027, a 30% higher volume of allowances will be auctioned to provide market liquidity. As in the existing EU ETS, the ETS2 will operate with a dedicated, rule-based MSR to mitigate insufficient or excessive supply of allowances to the market.
The proposed reforms are part of the broader “Fit for 55” legislative package, aligning the ETS with the EU’s legally binding target to cut net greenhouse gas (GHG) emissions by at least 55% by 2030 under the European Climate Law.
Climate Removals and Carbon Farming
In 2024, the EU created a separate system of Carbon Removals and Carbon Farming (CRCF) (i.e., industrial and nature-based permanent storage and utilization of biogenic carbon dioxide (CO2)), which has led to industrial carbon removal projects being developed in both regions. The CRCF is currently excluded from the EU ETS and, therefore, cannot be used by EU ETS obligated parties as a compliance mechanism.
There are, however, discussions taking place in the EU about the inclusion of carbon removals within the EU ETS system, an approach the UK has been considering for some time. The ability to use carbon removal as a compliance mechanism would ease compliance and operability for the majority of the industry.
Summary
The announced intent between the EU and UK to link their respective ETSs represents a pivotal moment in climate policy and carbon market evolution. The recent agreement underscores the importance of international cooperation in addressing global emissions and sets a precedent for future market integration. However, while broader integration of carbon markets across jurisdictions may benefit market players and industries by improving efficiency and liquidity, it must not come at the expense of traceability and compliance requirements. Maintaining environmental integrity and robust oversight remains essential to the credibility and effectiveness of the system.
About the Expert
Urszula Szalkowska is the Managing Director, European Markets, and leads EcoEngineers’ European practice, supporting both European-based clients and international clients doing business in the EU. Ms. Szalkowska has more than two decades of experience working in renewable energy, fuels, climate change, and transportation. She has a deep understanding of regulations, business impact, and strategic communications in the EU. She advises businesses on compliance with national regulations in EU Member States and helps navigate the highly regulated renewable energy markets.
For more information about how we can help you navigate the UK or EU carbon market landscape, contact:
EcoEngineers, an LRQA company, is a consulting, auditing, and advisory firm exclusively focused on the energy transition and decarbonization. From innovation to impact, EcoEngineers helps its clients navigate the disruption caused by carbon emissions and climate change. 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. For more information, visit www.ecoengineers.us.
In the dynamic landscape of renewable energy, understanding the intricacies of market pricing and regulatory impacts is crucial for stakeholders. EcoEngineers’ “California Low Carbon Fuel Standard (CA-LCFS) and Renewable Fuel Standard (RFS) Credit Pricing Analysis” report provides valuable insights into market trends and factors influencing energy credit prices.
This article provides a brief overview of recent developments in Renewable Identification Number (RIN) and California Low Carbon Fuel Standard (CA-LCFS) credit pricing, examining the implications of regulatory changes and market conditions. Subscribing to the monthly report provides actionable insights, analysis, and outlooks.
Subscribers receive curated news, in-depth analysis, and actionable insights to drive your clean energy projects. The authors of the report, Roxby Hartley, Ph.D., Climate Risk Director, Holland Heins, Carbon Consultant, Asset Development, and Kylie Bednarick, Senior Carbon Consultant, are fully immersed in these markets and have deep experience tracking and analyzing data, monitoring trends, and developing informed forecasts.
RIN Market Trends and Price Influences
D3 RIN prices have been low due to prevailing market uncertainty. At the end of 2024, D3 RIN prices dropped following the U.S. Environmental Protection Agency’s (USEPA) announcement of proposing to partially waive the 2024 cellulosic biofuel volume requirement. While the proposed waiver means the final volume obligation for 2024 is unknown, USEPA officially extended 2024’s compliance deadline, indicating a likely reduction in the 2024 volumes. This, combined with unknown renewable volume obligations (RVOs) beyond 2025 and lingering small refinery exemptions (SREs), has contributed to keeping D3 RIN prices low. The overall lack of policy clarity is causing a wide range in our price projections through 2027. As we await further information, the market remains in a state of flux, with prices staying relatively low due to the prevailing uncertainty.
While D3 RIN generation continues its annual growth trend at around 25%, the total compressed natural gas (CNG) dispensing capacity remains a limiting factor. The USEPA’s consideration of these factors in developing the 2026 RVO will be pivotal in shaping the future of the D3 RIN space. The USEPA must balance renewable natural gas (RNG) growth with CNG dispensing limitations when setting the RVO, as a strong RVO could drive prices up and incentivize the development of additional CNG stations to expand capacity, while a weak RVO could lower prices and drive RNG to alternative markets.
The transition to the new Inflation Reduction Act (IRA) Section 45Z Clean Fuel Production Tax Credit (PTC) has impacted D4 RIN prices by offering an upstream production-based carbon intensity (CI)-driven incentive structure compared to the $1-per-gallon biodiesel blender’s tax credit (BTC) point-of-sale incentive structure typically favored by downstream fuel blenders and distributors. This shift has led to a surge in D4 RIN prices, especially in April 2025, due to low D4 RIN generation in the first quarter and rumors of a higher biomass-based diesel RVO anticipated to be proposed by the USEPA for 2026 and beyond.
D4 RIN production in 2025 has been lower compared to previous years, primarily because the new Section 45Z PTC is available only for domestic producers. This has led to a drop in foreign RIN generation. Domestic production of D4 RINs has also dropped due to the Section 45Z PTC offering lower credit amounts than the previous BTC for biodiesel, renewable diesel, and sustainable aviation fuel (SAF) producers. Many producers are operating at lower rates or planning shutdowns due to low margins and uncertainty surrounding the Section 45Z PTC guidance. The forecast for D4 RIN prices over the next three years suggests they will remain in the current range, influenced by future commodity prices. However, D4 RIN prices are expected to fluctuate with the release of full Section 45Z PTC guidance and announcement of the biomass-based diesel RVO for 2026 and beyond.
CA-LCFS Credit Market Trends and Price Influences
The CA-LCFS program remains the flagship of the state’s transportation decarbonization strategy, and its success is driving imitation across many western states. The regulatory framework has established market mechanisms that incentivize innovation while providing compliance pathways for regulated entities. Credit banking mechanisms create market stability, allowing stakeholders to plan investments with confidence, in stark contrast to regulatory signals across the nation that are confusing at best.
Renewable diesel has emerged as an alternative to petroleum-based diesel, transforming California’s diesel fuel market. The technology has achieved commercial-scale deployment across multiple production facilities, utilizing feedstock portfolios that range from waste oils to energy crops. The biodiesel sector maintains its volumes, though it faces competition from renewable diesel for feedstock resources. RNG is the third pathway for decarbonizing the heavy-duty vehicle sector in the state, particularly in vehicle segments where electrification faces challenges. Dairy and agricultural sectors have become the dominant feedstock source, lowering the average carbon intensity (CI) score dramatically. SAF development is accelerating as the aviation industry pursues decarbonization objectives within a sector facing few alternative technology options.
California’s gasoline market continues to thrive despite transportation electrification trends. Ethanol integration continues providing content within the gasoline pool, and EV use continues to grow across vehicle categories.
Looking ahead, California’s low-carbon fuel market demonstrates the viability of policy frameworks that balance environmental objectives with economic realities. The program’s success in driving technology deployment, market transformation, and CI reductions provides a blueprint for other jurisdictions pursuing transportation decarbonization.
As production capacity continues expanding across renewable diesel, SAF, and RNG, while electric vehicle adoption accelerates, California’s LCFS program positions the state to meet its climate goals while maintaining energy security and economic competitiveness. The convergence of these technologies creates a diversified, resilient transportation fuel portfolio that reduces dependence on petroleum while supporting innovation and job creation across the clean energy sector.
To gain more detailed information now and in the future, subscribe to EcoEngineers’ “CA-LCFS and RFS Credit Pricing Analysis” by contacting EcoEngineers’ client services at clientservices@ecoengineers.us.
About EcoEngineers
EcoEngineers, an LRQA company, is a consulting, auditing, and advisory firm exclusively focused on the energy transition and decarbonization. From innovation to impact, EcoEngineers helps its clients navigate the disruption caused by carbon emissions and climate change. 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. For more information, visit www.ecoengineers.us.
Table 1. Power source comparison for data centers. Sources: 
1. Existing and untapped biogas sites across all 50 states. Courtesy: American Biogas Council
2. There are more than 2,300 active biogas projects in the U.S. Courtesy: American Biogas Council
