On December 1, the U.S. EPA released a proposed rulemaking under the Renewable Fuel Standard (RFS) program, which includes a long-awaited regulatory framework to generate credits (“eRINs”) from biogas projects, including anaerobic digestion (AD) facilities, that produce renewable electricity for electric vehicles. For a quick refresher, the RFS introduced a market-based compliance mechanism that requires refiners or importers of gasoline/diesel fuel to show that particular volumes of renewable fuels have been introduced into the nation’s transportation fuel mix. Refiners or importers are required to meet the volumetric standards by blending renewable fuels in their petroleum-based fuels, or, as explained in a Dec. 18 National Law Review article, “by obtaining credits known as Renewable Identification Numbers (RINs) that otherwise proves that renewable fuel was used as a transportation fuel. Renewable fuel producers generate RINs by producing a gallon (or gallon equivalent) of renewable fuel, such as ethanol, biodiesel, or compressed natural gas.”
EPA’s proposed eRINs rule expands the program to electric vehicles (EVs). EV manufacturers (or, potentially, renewable electricity generators and EV charging networks) may “generate RINs for electric vehicles (eRINs) charged with renewable electricity sourced from renewable biomass,” continues the article. “…EPA’s preferred method for calculating eRIN generation would use contractual relationships between renewable electricity generators and EV manufacturers (also known as original equipment manufacturers, or OEMs) to show that renewable electricity was used as transportation fuel. Under this method, OEMs would be able to generate a quantity of eRINs representing the amount of renewable electricity used by both new and previously sold light-duty EVs. The OEM would be responsible for purchasing renewable electricity from generators, and matching the quantity of renewable electricity with fleet-wide electricity consumption averages for that OEM’s vehicles. …. Under EPA’s preferred approach, biogas producers would first produce biogas under existing EPA-approved pathways for biogas to electricity. Second, renewable electricity generators would either use biogas directly supplied to their electric generating units or procure renewable natural gas from the natural gas commercial pipeline system. Third, OEMs would determine the electricity consumption of their vehicles and enter contracts with renewable electricity generators for energy sufficient to cover their fleet’s in-use electricity consumption.”
According to the National Law Review article, “EPA’s proposed eRINs rule would prevent eRINs from being generated until January 1, 2024. If finalized in this form, the eRIN program would greatly expand opportunities for companies to generate or share in the economic rewards of cellulosic biofuel (D3) RINs under the RFS. …. OEMs may also start pursuing arrangements to secure long-term supplies of biogas-generated renewable electricity, which could spur the development of anaerobic digesters that are located close to power transmission but a considerable distance from interstate natural gas pipelines.”
The public comment period ends February 10, 2023. EPA is then likely to finalize the rule by June 14, 2023.