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. The proposed rulemaking also includes an alternate accounting methodology to help increase food waste recycling in anaerobic digesters, and fuel volumes for the next three years.
“Of the 2,300 biogas systems currently operational in the U.S., 2,000 produce uninterruptible renewable electricity,” says Patrick Serfass, executive director of the American Biogas Council (ABC). “This guidance from EPA will create the opportunity for these projects as well as new ones, to generate eRIN RFS credits if their electricity is used to charge electric vehicles. This with help decarbonize transportation and increase the volume of organic material that we recycle in the U.S., especially smaller volumes from small towns, farms, and food processors.”
The proposal also addresses a core problem for digesters processing various food waste streams. “Food waste today is often rejected from biogas systems that participate in the RFS because the program has, in most cases, required system owners to devalue all their renewable fuel credits if they accept it,” adds Serfass. “The ABC is hopeful the new [accounting] methodology will not only address that issue but encourage a new wave of food waste recycling across the U.S., producing more renewable energy and recycling nutrients to reduce dependence on the fossil-fuel derived, synthetic fertilizers used across agriculture.”
Another key element of the proposal is setting renewable fuel volumes for 2023-2025. “Because the Energy Independence and Security Act of 2007 (EISA) [which fully established the RFS] does not include volumes after 2022, this is the first time that EPA is setting these proposed biofuel volume targets without using those outlined in statute,” explains an EPA webpage about the proposed rules. “When setting biofuel volumes for years after 2022, EPA must consider a variety of factors specified in the statute, including costs, air quality, climate change, implementation of the program to date, energy security, infrastructure issues, commodity prices, and water quality and supply. The agency is seeking comment on the proposed volumes and how to appropriately balance these factors so that the program works for renewable fuel growers and producers, refiners and the union workers who operate these facilities, and fuel consumers.”
While ABC appreciates having three years of renewable fuel volumes proposed, it notes the amounts attributed to renewable natural gas (RNG) are inadequate. “Previously, EPA’s volumes have only recognized an 8% annual growth rate of RNG while the number of RNG projects has been increasing at a rate of 20% to 40% and the industry this year is already likely to exceed 2022’s target,” explains Serfass. “As a result, while the fuel volumes proposed recognize a higher 36% annual growth over the next three years, they are probably too low. We think EPA is still underestimating the impact of continued strong growth in RNG production, new renewable electricity projects participating in the RFS in 2024, and potentially more food waste generated biogas electricity and RNG. If EPA doesn’t make the volumes higher, it risks crashing credit values and halting renewable fuel production, development, and investments.”