EPA sets RFS volumes for 2023–2025: the role of RNG in the cellulosic category (D3) grows

The US EPA announced on 21 June 2023 the final rules of the Renewable Fuel Standard (RFS) programme for 2023–2025. For the biogas sector the most important thing is that in the cellulosic fuels category (identifier D3) – which includes RNG from digestion biogas and landfill gas – the EPA adopted 25% annual growth in RNG production, higher than the 13.1% in the proposal.

Volumes and dates

The regulation was published in the Federal Register on 12 July 2023 (88 FR 44468). According to the table on the EPA website, the cellulosic fuel volumes were 0.84 billion RINs in 2023, 1.09 billion in 2024 and 1.38 billion in 2025 (one RIN is the equivalent of a gallon of ethanol). For biomass-based diesel (BBD) 2.82, 3.04 and 3.35 billion gallons were given respectively. The preamble of the regulation in the Federal Register gives the cellulosic volumes in rounded millions of RINs: 838, 1,090 and 1,376. The total renewable fuel volume was 20.94, 21.54 and 22.33 billion RINs.

Dropping eRIN

The EPA dropped the proposed eRIN provisions, that is, RINs for electricity from biogas powering electric vehicles. The original proposal assumed large eRIN volumes in 2024 and 2025, so their removal significantly lowered the final cellulosic volumes. The American Biogas Council assessed that the final D3 RNG volumes better match what is actually observed in the industry.

Supplemental volume

The regulation also introduced a supplemental volume of 250 million gallons of renewable fuel for 2023. This is the second such correction – a response to the ruling in Americans for Clean Energy v. EPA (2017), which vacated part of the 2016 regulation; a similar volume of 250 million gallons had been introduced earlier for 2022.

How D3 works in practice

RNG used as a transport fuel (e.g. bioCNG for vehicles) generates D3 RINs, which are sold to obligated parties – refineries and fuel importers. The price of RINs makes up a significant part of the revenue of an RNG project, so changes in the EPA's volumes and rules directly affect the profitability of investments.

What this means for Poland and Europe

The RFS is the counterpart of the EU obligation on the share of renewable energy in transport (RED II), but with tradable RIN units of wider scope. For European investors it is an example of how regulatory instability – changes of volumes, court rulings, delays – affects certificate prices and investment decisions.