Renewable natural gas (RNG) developers have a supply problem, and ethanol producers have a demand they aren’t allowed to use to solve it. Dispensing capacity hasn’t kept pace with RNG production, and the market is increasingly oversupplied. Ethanol plants, meanwhile, are significant consumers of natural gas for process heat. On paper, that looks like an obvious match. In practice, the accounting rules governing how RNG’s environmental value can be claimed stand in the way, and nobody in the industry has managed to close the gap.

Where the accounting breaks down

Book-and-claim accounting enables the transfer of the environmental attributes associated with RNG independently of the physical gas molecules. This approach is widely accepted for RNG used as a transportation fuel under California’s Low Carbon Fuel Standard. Likewise, renewable identification numbers (RINs) under the Renewable Fuel Standard function as a book-and-claim mechanism, allowing renewable fuel attributes to be tracked and transferred separately from the physical fuel. These pathways are mature, verified, and widely used. 

Apply the same accounting to RNG used as process energy at an ethanol plant, however, and the answer is no. Book-and-claim isn’t recognized for that use, even though the metering, verification, and contractual infrastructure underpinning RNG delivery is generally more rigorous than many book-and-claim electricity claims that are permitted elsewhere in current programs.

The technology and accounting methodology are not new concepts. Ethanol producers already rely on similar market-based instruments throughout their compliance and sustainability programs. For example, the 45Z Clean Fuel Production Credit incentivizes the production of lower-carbon-intensity fuels and allows producers to reduce their carbon intensity (CI) score through the procurement of renewable energy credits (RECs), which are accounted for using a book-and-claim framework

However, you cannot book and claim renewable thermal credits (RTCs) to supplement natural gas consumption at an ethanol plant and reduce CI of ethanol in any regulated program. The infrastructure and precedent for crediting RNG’s attributes without physical delivery already exist and are already trusted elsewhere in fuels policy. The gap is that process energy at an ethanol facility hasn’t been added to the list of recognized uses.

Why the gap doesn’t hold up

It’s difficult to construct a policy rationale for treating RNG-as-transportation-fuel and RNG-as-process-energy so differently. Both uses displace fossil natural gas. Both rely on the same underlying gas grid and the same book-and-claim logic to connect a specific molecule of injected RNG to a specific claimed use. If anything, crediting RNG as process energy at an ethanol plant is a similar claim to verify, since the volumes, timing, and end use are well documented through existing RFS and state reporting requirements that ethanol producers already meet. Until regulators extend recognition to this use, RNG used at ethanol facilities largely needs to happen physically behind the meter, a real project a plant can undertake, but a narrow one compared to what book-and-claim accounting would allow.

A home for oversupplied RNG

The market timing makes this worth pressuring regulators on now rather than later. RNG production has been outpacing the dispensing capacity and end-use demand needed to move it, and that oversupply shows up as compressed pricing and stranded value for developers. Ethanol plants represent a large, geographically distributed, and already-metered base of natural gas demand. Recognizing book-and-claim RNG as an eligible process energy input wouldn’t require new pipelines or new physical infrastructure. It would simply let existing environmental attribute markets do what they already do for transportation fuel, applied to a second, sizable use case that happens to sit right next to where a meaningful share of RNG is being produced.

A two-sided win 

Closing this gap benefits both sides of the transaction. RNG developers gain another recognized, credible outlet for their product at a moment when they badly need one. Ethanol producers gain another well-documented lever for lowering carbon intensity, one that sits alongside carbon capture and improved farm practices as a genuine, verifiable input rather than a marketing claim. Neither industry is positioned to make this case alone; it takes both sides showing regulators that demand and supply already exist and that the only missing piece is a rule change to let book-and-claim accounting extend to a use regulator that has simply never gotten around to adding it. It doesn’t appear likely to move quickly. But it’s a clean, well-documented ask, and one that both the ethanol and RNG industries have every incentive to make together, loudly and specifically, rather than leaving it as one more item on a long list of open questions as carbon markets continue to shift.

Chelsa Oren is ethanol and biodiesel service director at EcoEngineers, an LRQA company. She oversees regulatory, carbon intensity (CI) modeling, and verification services across programs including the U.S. Renewable Fuel Standard (RFS), California’s Low Carbon Fuel Standard (LCFS), Canada’s Clean Fuel Regulations (CFR), and emerging federal and global carbon markets. She is known for helping ethanol and biodiesel producers navigate complex compliance landscapes. Her work has supported dozens of facilities across North America, enabling millions of dollars in credit revenue through streamlined registration, verification, and credit optimization strategies.