On December 1st, the U.S. Environmental Protection Agency (EPA) released a proposed rule establishing the required Renewable Fuel Standard (RFS) volumes and associated percentage standards for 2023 through 2025. The preamble and the various supporting documents provide insight into EPA’s outlook on renewable fuel production and the proposed volumes. This proposed rule is referred to as the “Set” rule and includes the eRIN regulatory framework and reforms to RIN generation from biogas. The agency also incorporated the second of two “supplemental standards” of 250 million gallons addressing the court’s remand of the 2016 total renewable fuel standard. This proposed rule takes the total renewable fuel target from 20.82 in 2023 to 22.68 billion gallon RINs in 2025, a total growth rate of approximately 9% across the next three years.
TM&C’s team is actively reviewing both the regulatory and market implications of the proposed rule. Using our proprietary TM&C RIN Bank model allows us to assess various market scenarios and their impact on the RIN Bank, RIN prices, and implications for future renewable fuels investments. These insights and more will be included in the 1Q 2023 update of our Renewable Fuels Market Outlook. For inquiries about the Outlook, please contact Sam Davis at email@example.com.
Potential Market Disruptors:
|*||eRIN Regulatory Framework: Allow generation of eRINs from electricity generated from biogas for use in the “in-use Light Duty Vehicle fleet”. No new pathways being proposed.|
|•||Significant change to the equivalency value for calculating the amount of RINs generated.|
|*||Biogas Regulatory Reform: RIN generator to be the entity which upgrades the biogas into renewable natural gas (RNG) and then injects into a commercial pipeline. Concern has been around the double-counting of biogas.|
|*||Biomass-based diesel Outlook: Biodiesel and Renewable Diesel (RD) growth outlook proposed by EPA and the impacts this may have on the overall market.|
Other Proposed Regulatory Changes under Consideration:
|*||Enhancements to RFS third-party oversight programs|
|*||RIN apportionment in anaerobic digesters|
|*||Separated food waste recordkeeping requirement changes|
|*||Change in definition of “Produced from Renewable Biomass”|