The USEPA sent amendments to the Renewable Fuel Standard (RFS) to the White House’s Office of Management and Budget (OMB) that would further incorporate the use of biogas into the RFS. OMB review is the last step before finalizing an agency rule—it is reasonable to expect the final rule to be published some time this summer.
RFS requires gasoline and diesel refiners, blenders and importers to purchase and use an renewable fuel credits (RINs) representing volumes of renewable fuel to offset the annual production of petroleum-based transportation fuel. The final rule, if not modified by OMB, would increase the number of RINs required generated on biogas and therefore, increase the value of those RINs. This is part of the strategy to encourage the profitable production of biogas for heat and for transportation.
Currently, the USEPA allows the generation of “Advanced Biofuel” RINs only for biogas produced at landfills, wastewater treatment plants and manure digesters used as a direct transportation fuel (unmodified). Biogas that is converted to another form, such as electricity, and then used as a transportation fuel (electric vehicles) are not included.
The proposed rule allows biogas from landfills to qualify as a Cellulosic Biofuel, which would generate a RIN. Few RINs are currently from cellulosic sources. The USEPA has also proposed that the entity that can generate and sell the RINs is the “producer” of the renewable fuel, the company that compresses or liquefies the biogas into compressed natural gas or liquefied natural gas that is combusted as the transportation fuel.
The proposed rule would also allow RINs to be awarded for biogas that is subsequently converted to electricity, provided that that electricity is used as a transportation fuel. Given the large amount of room, most of the biogas collected at landfills, wastewater treatment plants and dairy farms is combusted to produce electricity. Some of that electricity is used for energy for the facility’s processes (pumps at wastewater treatment facilities, pasteurization at dairy farms). The proposed rule would require the producer to delineate electricity from landfills used specifically for transportation and all other uses of the electricity. Only the former would qualify the producer for RINs.
How will this affect you and your company? The proposed amendment of the RFS biogas rule will further encourage the production and distribution of biogas for electric and compressed natural gas-fired vehicles. Now that electricity can be an intermediate to qualify for RINs, more electric vehicles will be on the market and, therefore, become more affordable. This should also increase the number of biogas projects around the country, spur research, and make them more ubiquitous and profitable.
CCES has the experts to help you determine your proper energy mix for not just your processes, but for your fleet and other needs, as well. We can help you reduce your risk by expanding your energy sources and save money, too. Contact us today at karell@CCESworld.com or at 914-584-6720.