Category: Insights

Six Things Renewable Natural Gas Producers Need to Know About the Renewable Fuel Standard Set Rule

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.

READ MORE: Insights From the New Federal Renewable Fuel Standard Set Rule

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:

  1. 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).

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. 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.

READ MORE: Renewable Natural Gas and Asset Development Consulting

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:

Brad Pleima
Brad Pleima
Dave Lindenmuth
Dave Lindenmuth

 

Brad Pleima, President | bpleima@ecoengineers.us

Dave Lindenmuth, Managing Director, RNG | dlindenmuth@ecoengineers.us

EcoUniversity — Answering Your Most Complex Carbon Questions

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.

Lyndsey Nielsen

 

For more information about our EcoUniversity services, contact: Lyndsey Nielsen, EcoUniversity Director | lnielsen@ecoengineers.us

Insights From the New Federal Renewable Fuel Standard Set Rule

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.

As always, feel free to reach out to your contact at EcoEngineers to help you navigate the twists and turns of the growing low carbon economy, or email us at clientservices@ecoengineers.us.

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.

Life-Cycle Analysis – The Praxis of Carbon Accounting

Adapting to the new energy paradigm requires action. For businesses, this means measuring emissions footprint, making the right investment decisions, and filing reports and managing data through the lens of carbon accounting. EcoEngineers has helped hundreds of businesses gain control of this journey, guiding them through the energy transition without disrupting their core activities. 

Clean energy regulations, investment opportunities in voluntary carbon markets, and incentive programs such as the U.S. Inflation Reduction Act (IRA) all have product Life-Cycle Analysis (LCA) as their foundation. Therefore, in addition to measuring Scope 1, 2, 3 emissions, measuring product life-cycle carbon intensity (CI) of your inputs-outputs or a more comprehensive environmental product declaration of your inputs-outputs is one of the first steps in a successful transition to net-zero. 

Life-Cycle Analysis (LCA) is the praxis and application of carbon accounting. It is a systematic and comprehensive method for evaluating the environmental impact of a product, service, or system, from its inception to its end-of-life (cradle-to-grave). It assesses the environmental aspects and impacts throughout the entire life cycle of a product, including the extraction of raw materials, production, transportation, use, and disposal.

 Regulations that provide incentives to using low-carbon fuels based on an LCA: 

  • U.S. Renewable Fuel Standard (RFS) 
  • California Low Carbon Fuel Standard (LCFS) 
  • Oregon Clean Fuels Program (CFP) 
  • Canada Clean Fuel Regulations (CFR) 
  • British Columbia Low Carbon Fuel Standard (LCFS) 
  • EU Renewable Energy Directive (RED) and its implementing measures 
  • Brazil RenovaBio 
  • Emerging Voluntary 

LCAs are used by regulators to create a performance-based standard for incentives or to identify compliance issues. LCAs are also increasingly popular for environmental product declarations or labeling a product’s environmental footprint. EcoConsulting performs LCAs to support regulatory compliance and to inform decision-makers on priority areas to focus by identifying emissions hot spots associated with a product and their potential for improvement. 

Eco’s team of industry-renowned scientists, led by Dr. Zhichao Wang, has performed more than 500 carbon LCAs since 2015, on a variety of products including grains, oils, fuels, plastics, farm products, supplements, lubricants, metals, and more. Our team is fully adept at utilizing all available LCA tools such as the Argonne GREET (Greenhouse gases, Regulated Emissions, and Energy use in Technologies) model and its derivative CA-GREET, GHGenius, SimaPro, and OpenLCA. We advocate for establishing an international LCA standard and database for the global good. 

 For more information about our RIN Management System, contact: Client Services | clientservices@ecoengineers.us

Creating New Opportunities for Ethanol Producers

With unprecedented new policy sparking incentive for clean energy, ethanol producers are seeking new ways to reduce their carbon footprint. EcoEngineers can help. We’re committed to assisting the biofuels industry reach their carbon management goals to maintain a competitive advantage for years to come.

We know what’s important to producers of low-carbon biofuels, and understand that each ethanol producer is unique. We offer a customized approach for each client, helping to categorize and create a flexible project plan that producers understand and feel confident about from concept through completion.

Eco’s team of ethanol experts helps navigate regulations, carbon financial impacts, carbon-reduction technologies, options for carbon utilization, and more. We can assist in small-to-large-scale project carbon management, bringing technical and operational experience across on asset development, project scoping, and advising clients through their respective low-carbon projects.

Our Services Include:

• Carbon Market Training, Education & Workshops
• Life-Cycle Analysis (LCA) & Assessment
• Project Due Diligence & Scoping
• Asset Development Consulting
• Carbon Market Compliance
• EPA RIN Management Services
• Carbon Market Program Auditing
• Among Many Others

One of the keys to successful carbon reduction initiatives is to understand the carbon markets. Eco provides ethanol producers with in-depth knowledge on alternative fuel technologies and regulations, including the Environmental Protection Agency (EPA), Renewable Fuel Standard (RFS), California Low-Carbon Fuel Standard (LCFS), Oregon Clean Fuels program (CFP) Renewable Fuel Standard Pathways (RFS), along with expertise in emerging voluntary carbon markets.

Through EcoUniversity, our portfolio of training and education modules empower you to make informed decisions and maintain control over your carbon reduction goals. Our comprehensive training workshops, market outlooks, intensive Carbon Literacy training program, and condensed board and management training modules help you effectively evaluate the impacts of climate-related risks on your business.

Ethanol from Fermentation

Since 2021, many ethanol plants in the Midwest have announced that they will utilize carbon capture
and storage to become bioenergy with carbon capture and storage (BECCS) projects. BECCS is a key technology required to control emissions from fuel production and use. Currently, only around two metric tons of biogenic carbon dioxide are captured globally per year, relative to the 250-metric-ton removal required per year by 2030 for the Net Zero Emissions by 2050 Scenario. Ethanol plants in the Midwest have a tremendous opportunity to prove to the world that BECCS can be done. EcoEngineers is helping make this happen.

Our team of geologists, market analysts, and engineers has deep knowledge of the ethanol industry and experience managing capital-intensive projects. From helping with the technical aspects of subsurface gas storage to managing compliance and stacking carbon market credits with tax credits to achieve optimum economics, our work is critical to our ethanol clients as they take advantage of this opportunity.

  For more information about our ethanol services, contact: Client Services | clientservices@ecoengineers.us

Renewable Natural Gas and Asset Development Consulting

Since 2009, EcoEngineers has guided the growth of the biogas and renewable natural gas (RNG) sector, assisting many organizations to understand and navigate RNG projects from concept to commissioning and operations, resulting in more than $2 billion dollars invested in successful clean energy initiatives. 

Biogas and RNG are energy-rich byproducts of municipal and industrial waste management practices. They are biogenic sources of carbon. The use of this energy in place of fossil gas or diesel has resulted in millions of tons of fossil carbon dioxide emissions being avoided, and it has created a circular economy that rewards extracting energy from waste. 

Eco assists biogas and RNG projects in navigating regulatory complexities, carbon measurements, and reporting and validations – and we are creating new markets for biogas and RNG as well. 

 Our Services Include: 

  • Education on Markets, Projects, and Regulations 
  • ESG Advisory Services 
  • Life-Cycle Analysis 
  • Carbon Markets Advisory Services 
  • Independent 3rd Party Verification and Validation 
  • Compliance Management 
  • Regulatory Engagement 
  • Investment Due Diligence 
  • GHG Inventory and Accounting 

Our Asset Development team has worked with scores of emerging and established technologies to accurately measure and report the emissions reductions they achieve. As the biogas and RNG market expands, it’s pushing the boundaries of the compliance markets that initially fueled its growth. Corporate buyers are voluntarily purchasing energy from biogas and RNG to offset their Scope 1 and 2 emissions. Eco is developing Life-Cycle Analysis (LCA) methodologies to make it easier for biogas and RNG projects to quantify and sell offsets in voluntary carbon markets. 

With a highly qualified and well-respected LCA modeling team, Eco has provided carbon intensity (CI) scores for hundreds of RNG projects at all stages of development. We have modeled every variety of biogas and RNG projects, including landfills, dairy, and swine manure projects, and other, to meet the requirements of a wide range of programs, including the California, Oregon, Canadian, and European low-carbon fuel programs, and several voluntary carbon registries. 

Dave Lindenmuth

 

For more information about our renewable natural gas services, contact: Dave Lindenmuth, Managing Director, RNG | dlindenmuth@ecoengineers.us

EcoEngineers: Your Trusted Guide Through the Energy Transition

EcoEngineers is a consulting, audit, and advisory firm with an exclusive focus on the energy transition. From innovation to impact, we help you navigate the disruption caused by carbon emissions and climate change.

We help you stay informed, measure emissions, make investment decisions, maintain compliance, and manage data through the lens of carbon accounting. Our team consists of engineers, scientists, auditors, consultants, and researchers with deep expertise on global fuels policy, energy and carbon markets, and alternative solutions to meet energy demands. 

Eco was established in 2009 to steer low-carbon fuel producers through the complexities of emerging energy regulations in the United States. Today, our global team is shaping the response to climate change by advising businesses across the energy transition.

Together, we can create a world where clean energy fuels a healthy planet.

For a full view of our services, access the document attached.

Life-Cycle Analysis and Clean Hydrogen Consulting

Transitioning to a sustainable and equitable world is one of the greatest challenges humankind has faced. It’s the balance of maintaining and raising human standard of living for all, while reducing waste, loss of biodiversity, and carbon emissions – sustainable development. This requires a complete transformation of how we produce, store, and use energy.  

Low carbon fuels, particularly clean hydrogen, will play an important role in the energy transition. And to make real progress, we need to understand the environmental aspects and potential impacts of producing, transporting, and using clean hydrogen. To asses these impacts, we use a technique called Life-Cycle Analysis (LCA).

Conducting an LCA involves compiling an inventory of relevant energy and material inputs and environmental releases; evaluating the potential environmental impacts associated with the identified inputs and releases; and then interpreting the results to help you make more informed decisions. This expertise of multi-disciplinary teams is often not available in-house. What’s your clean hydrogen project’s CI score?

A carbon intensity (CI) score is the aggregated greenhouse gas (GHG) emissions during the “life cycle” of a fuel divided by the quantity of the fuel. To qualify for the clean hydrogen production tax credit (45v) under the United States Inflation Reduction Act (IRA) of 2022, you’ll need an LCA to determine if the hydrogen has a CI score of 4 kg CO2e per kg of hydrogen or lower on a well-to-gate basis. An LCA should be conducted as early as possible in the project development cycle. You’ll want to design your project from the outset to maximize the value of the 45v tax credit and other relevant programs. EcoEngineers helps companies develop clean fuels projects from conception to commissioning, including the review of off-take agreements. After the project is up and running, we provide ongoing compliance management to make sure your revenue stream from carbon credits and incentives remains stable.

Our services include:

  • Life-Cycle Analysis

  • LCFS Pathway Application

  • Investment Due Diligence

  • Feasibility Studies

  • Offtake Market & Revenue Analysis

  • H2 Project Development

  • White Papers

  • Training & Education

  • Regulatory Engagement

  • Ongoing Compliance Management

EcoEngineers has performed more than 500 carbon LCAs since 2015. We have experience in all of the regulations that require LCA, including the US 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.

Tanya Peacock
Guillermo Aguirre

For more information about our clean hydrogen services, contact:

Tanya Peacock, Managing Director, California and Hydrogen | tpeacock@ecoengineers.us  

Guillermo Aguirre, Senior Account Manager, RNG | gaguirre@ecoengineers.us

EcoEngineers RIN Management System

When EcoEngineers was formed in 2009, one of the first services we offered was a system to track Renewable Identification Numbers (RINs), called the RIN Management System (RMS). We recognized that producers of renewable fuels would need a way to track their RIN and fuel transactions easily, and we developed the RMS to meet that need.

Tailored for small to mid-sized companies who don’t have capacity to manage RIN transactions, RMS is a secure, cloud-based subscription service that helps producers and marketers track all buy, sell, and trade activity for RIN credits and fuel transactions. It interfaces with the US Environmental Protection Agency Moderated Transaction System (EMTS) and keeps all transactions related to RIN credits in one place. Because it’s cloud-based, you can log in and complete your work from anywhere, securely.

There are several benefits to having a RIN Management service, including:

Organized, User-Friendly System: The dashboard view provides an overview of transactions that may need your attention, allowing users to quickly confirm buys and check any pending sales. Relevant updates and notices are posted on the dashboard, and users can easily move through the platform using the navigation toolbar.

Multiple Transactions: RMS helps producers save time and provides plenty of flexibility. It allows you to complete multiple transactions with a single entry, and there are several options available.

Pending Sell Data: The Pending Sell page shows any “sell” transactions that have not been accepted by the buyer, and the number of days until the sell expires in EMTS. RMS automatically resubmits the sell until it is accepted by the buyer or becomes too old.

Compliant: USEPA requires certain information for each RIN transactions, including fuel pathway, volume, quantity and QAP type. They also require a Product Transfer Document (PTD) with each transaction. Our RMS ensures your transactions are all USEPA-compliant. PTDs are stored and easily retrieved in the system.

Reporting: Solid reporting provides a system of record for compliance purposes. Our reporting shows your RIN inventory at a glance. Transaction reports can be quickly downloaded as needed. Quarterly reports can be used to aid in quarterly and annual fuel pathway reporting.

Secure Data Warehouse: RMS is Sarbanes-Oxley Act (SOX)-compliant – which is a requirement for publicly-traded companies – and is hosted on Amazon Web Services (AWS), one of the most flexible and secure cloud computing environments available.

Help Desk/Regulatory Expertise: Our RMS team provides onboarding and training, and with their background in RFS, they can provide regulatory guidance to ensure you’re correctly submitting your RIN and fuel transactions.

Whether you’re a new fuel producer, or you’ve been in the market for years, consider using EcoEngineers’ RMS to manage your RIN program. It’s perfect for small to mid-sized companies who don’t have capacity to manage RIN transactions.

  For more information about our RIN Management System, contact: Client Services | clientservices@ecoengineers.us.

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Eco Engineers

1300 Walnut St., Suite 100

Des Moines, IA 50309

  +1 515.985.1260

  clientservices@ecoengineers.us

   

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