Mixed reaction from US biogas industry to EPA's 2020 final RVO rule
On December 19, 2019, the US Environmental Protection Agency (EPA) released the final 2020 volumes for the Renewable Fuel Standard (RFS) prompting a mixed reaction from the American Biogas Council (ABC).
“On the one hand, the increased volume of biogas-derived cellulosic fuel is appreciated because it will create more demand for biogas fuels. But two other provisions do not help," said Patrick Serfass, Executive Director of the ABC.
On December 19, 2019, the US Environmental Protection Agency (EPA) released the final 2020 volumes for the Renewable Fuel Standard (RFS). The final rule includes 577 million (US) gallons (≈ 2.18 billion litres) for the cellulosic biofuel category, 95 percent of which comes from biogas-derived renewable natural gas (RNG).
This represents an increase of 52 million gallons (≈ 196.8 million litres) or 10 percent in the final rule compared to the proposed 525 million gallons (≈ 1.99 billion litres). That will lead to a greater demand for biogas to upgrade into RNG.
However, the final rule also includes a methodology for counteracting the negative impact of waivers that the ABC thinks will be minimally effective compared to just replacing the gallons that were waived with an equal number in the fuel targets.
In addition, the EPA rule failed to include any fuel gallons in its targets for renewable electricity. In fact, the approved pathway was not mentioned while all others were included in the final rule. This summer, in response to the proposed fuel targets, the ABC requested that 662 million gallons (≈ 2.5 billion litres) be added to the cellulosic category, in addition to the volumes allocated for RNG, to account for Renewable Identification Numbers (RINs) that can be produced under the renewable electricity pathway.
This would bring the total volume of the cellulosic category to 1.24 billion gallons (≈ 4.69 billion litres) compared to the 577 million cellulosic gallons (≈ 2.18 billion litres) from biogas included in this rule. Nothing was added for the renewable electricity pathway.
For context, the final 2020 volume for the entire RFS including all categories is 20.1 billion gallons (≈ 76 billion litres).
On the one hand, the increased volume of biogas-derived cellulosic fuel is appreciated because it will create more demand for biogas fuels. But two other provisions do not help. The rulemaking indicates the Administration will continue their frequent and indiscriminate issuance of waivers which tank the value of the renewable credits our industry sells, RINs. In the last two years, we’ve seen that every time waivers are issued, RIN values crash, and if that continues at the current pace, those actions will negatively outweigh the benefits from larger required volumes, said Patrick Serfass, Executive Director of the ABC.