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

The Numbers in the EPA’s Federal Renewable Fuel Standards Set Rule

*BBD volumes are given in billion gallons

More specifics:

  • The EPA’s rule has established volume requirements for future years, while retaining the authority to waive volumes if necessary.
  • The regulatory provisions for eRINs have not been finalized due to stakeholder comments and the complexity of the topics raised. However, the EPA will continue to work on potential paths forward for the eRIN program based on stakeholder interest.
  • Biogas reform includes provisions for using biogas as a biointermediate and RNG as a feedstock to produce biogas-derived renewable fuels. Biointermediate producers and renewable fuel producers must associate with each other to generate RINs for renewable fuels produced from biointermediates.
  • To enhance program simplicity and RIN integrity, the EPA is finalizing revisions to track the flow of RNG in the EPA moderated transaction system (EMTS). RNG producers will be the sole RIN generators for RNG injected into a natural gas commercial pipeline system. RIN separation will be allowed only for parties that demonstrate RNG use as transportation fuel.
  • Before the EPA accepts a registration submission, any biogas or RNG that is produced and stored must be stored on-site, under certain conditions.
  • Registration and reporting requirements have been updated, including the elimination of the need to submit contracts at registration. Real-time data in EMTS will reduce the reporting of affidavits and additional documentation.
  • The EPA has specified testing and measurement requirements for biogas and RNG production facilities, including measurement standards and certificates of analysis. QAP requirements have been revised for RNG producers, and third-party oversight enhancements have been implemented to ensure independence and impartiality.
  • The deadline for third-party engineering reviews for three-year updates will start after the 2023 update deadline, and RIN apportionment in anaerobic digesters will follow specific equations. The biomass-based diesel (BBD) conversion factor has been increased and separated food waste recordkeeping requirements have been modified to allow feedstock aggregators to hold records.
  • A bond requirement has been established for foreign RIN-generating renewable fuel producers and owners, and a definition of “produced from renewable biomass” is not being finalized at this time.

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