On March 27, 2026, the U.S. Environmental Protection Agency (USEPA) announced its final regulations regarding the next phase (“Set 2”) of the Renewable Fuel Standard (RFS). Earlier in the week, USEPA issued a temporary waiver allowing nationwide sales of a gasoline mixture containing 15% ethanol starting May 1. I think the plan is to issue more temporary waivers every 20 days (that’s what the statute requires, anyway). It was a good week for farmers who grow crops for ethanol production.
The final regulations for the next phase of RFS removed regulatory language from the Biden Administration that was seen as setting the stage for electricity to qualify as a renewable motor vehicle fuel (eRINs). Many in the landfill gas industry were hopeful that USEPA would include eRINs in the program. No such luck. When Congress passed the RFS legislation 20 years ago, it did not mention electric vehicles (EVs). That might be because EVs did not really show up in the U.S. market until 2013 or so, when fewer than 50,000 EVs were sold. For the purists in the audience, we’re not counting hybrids because they use gasoline to make electricity. So, although there is some support for eRINs on Capitol Hill, they apparently didn’t write a law that requires eRINs. Not yet, anyway.
SCS Engineers is a market leader for those converting landfill gas (LFG) and digester gas into renewable natural gas (RNG). When RNG is used for motor fuel, it qualifies as a cellulosic biofuel. The required volumes for such will increase by 12.4% to 150 million Renewable Identification Numbers (RINs) (credits used for compliance) in 2026, and another 5.1% to 70 million RINs in 2027. These are larger increases than USEPA proposed last June, so in that sense, it is good for RNG clients.
RINs are units used in the RFS program; 1 RIN is the equivalent of a gallon of ethanol. Other renewable fuels have more energy content than ethanol, so a gallon of biomass-based diesel fuel might qualify for 1.6 RINs, for example. USEPA uses five “D” codes to track different types and uses of renewable fuels. Here is a link to USEPA’s website showing what materials and processes qualify for which D codes; you will see municipal solid waste (MSW) and biogas from landfills mentioned in feedstock or production process requirements for several types of renewable fuels. D3 RINs, for example, are assigned to cellulosic biofuel, the most sustainable renewable fuel category.
Final RFS rules complete one part of the puzzle, but recall that significant changes to tax credits also affect those in the RNG space. RNG projects that began construction before 2025 qualify for significant investment tax credits (ITCs), but those that began construction in 2025 or later do not. One company that provides RNG for transportation customers, Opal Fuels, sold almost $43 million in ITCs in 2025 for projects in Sampson County (NC), Prince William County (VA), and Polk County (FL). They announced recently that they have sold another $11.5 million for their 50% share of the Atlantic RNG facility in Egg Harbor, New Jersey.
Production tax credits (PTCs) are available for new RNG projects (and for LFG-to-electricity projects). As the name implies, PTCs are based on units of fuel or electricity produced. To qualify for PTCs, projects must be registered. And if a facility claimed ITCs, it cannot claim PTCs. The PTC RNG market is developing.
Below is the table with the final RFS numbers from USEPA.
Having a final rule for 2026 and 2027 is helpful—it provides certainty for everyone in the market. One aspect that USEPA wanted to address but has put off until 2028 is the issue of imported renewable fuels and imported feedstocks for making renewable fuels; apparently, USEPA is planning to allow only half a credit for such starting in 2028.
In 2023, USEPA finalized requirements for cellulosic biofuel in 2025 at 1.38 billion RINs. Because the market did not produce that many RINs in 2025, USEPA is now changing the 2025 volume requirement to 1.21 billion RINs and “waiving” the difference. Another aspect of the rule concerns Small Refiner Exemptions (SREs)—to the extent USEPA grants SREs, there is a question about whether large refiners must pick up the difference. USEPA could have answered, “no” (no SRE reallocation) or “yes, all of it” (100% SRE reallocation), or something in between. They picked 70% reallocation in the final rule.
The use of corn or soybeans to produce renewable fuels is controversial. Farmers like the larger market for their crops. Refiners generally don’t care for the RFS because they sell less petroleum and have to buy ethanol (although large refiners can produce their own ethanol).
Corn-derived ethanol is ~40% less carbon-intensive (good), ~30% less energy per gallon (bad), and less expensive than gasoline. The lower cost of ethanol is offset to some extent by its lower energy content, leaving its lower carbon intensity as the real differentiator. One man’s opinion, anyway.
The final rule, while generally providing higher biofuel levels, has received a mixed response from the biogas sector. The RNG Coalition applauded higher cellulosic biofuel volumes, but the American Biogas Council criticized the rule for underestimating industry growth, constraining markets, and the specific constraints placed on D3 cellulosic RINs.
Our biogas experts at SCS Engineers are available to answer your questions and discuss the impact on planning for RNG and landfill gas conversions. Reach an expert at SCS Engineers.
About our Author: Mike McLaughlin, PE, JD, is a senior vice president and one of our National Experts. He is a licensed engineer and attorney with over 45 years of professional experience providing advice on environmental matters, particularly hazardous waste and Superfund issues. He is an expert on environmental regulatory compliance, remediation, and allocation of response costs. He has served as Chair of the Environmental Law Section of the Virginia State Bar and in a variety of leadership roles with the American Bar Association Section of Environment, Energy and Resources.
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