In December 2022, the Environmental Protection Agency (EPA) issued a proposal to further enhance the Renewable Fuel Standard (RFS). Originally authorized under the Energy Policy Act of 2005 and expanded under the Energy Independence and Security Act of 2007, the RFS’s goals are to reduce greenhouse gas emissions, expand the nation’s renewable fuels sector and reduce reliance on imported oil.[EPA] The proposal, commonly referred to as the SET rule, set the Renewable Volume Obligations (RVO) for 2023, 2024 and 2025, as well as introduced policy that aims to accelerate electric vehicle adoption and production, and establishes a generation pathway for electric renewable identification numbers (eRINs).
What are eRINs?
The 2022 RFS proposal introduces eRINs, which are credits produced when qualifying biogas is used to generate renewable electricity for the charging of light-duty electric vehicles. The proposal allows original equipment manufacturers (OEMs) to generate eRINs based on this pathway. Similar to traditional renewable identification numbers (RINs), eRINs are then traded on the open market, to be ultimately purchased by an obligated party (refiners or importers of gasoline or diesel fuel) to meet their RVO.
Why are eRINs being introduced?
eRINs provide numerous benefits that align with the original goals of the RFS. Similar to existing RINs, eRINs can enable greater development of renewable energy projects. With more than 500 operational, under construction and planned RNG facilities in North America[RNG Coalition], eRINs create additional opportunity for increased RNG development and investment. Simultaneously, eRINs can assist electric vehicle manufacturers to increase production and drive adoption of electric vehicles. Currently, electric vehicles make up 6% of the United States automotive market[Reuters], presenting significant opportunity to transition away from gasoline and diesel vehicles while reducing greenhouse gas emissions.
Who do eRINs impact?
There are numerous stakeholders involved across the eRIN lifecycle. The original proposal designates electric vehicle manufacturers as the eRIN generator. The landscape of RIN market participants is complex, spanning RNG producers, renewable electricity generators, eRIN traders, Quality Assurance Plan auditors, electric vehicle charging infrastructure and obligated parties.
When do eRINs go into effect?
The initially proposed implementation date for eRINs is January 1, 2024.
What’s next for eRINS and the RFS?
The EPA is receiving public input on the RFS from stakeholders including RNG developers, electric vehicle manufacturers, industry associations, refiners and other interested parties throughout January and February 2023. The rule is then scheduled to finalize by June 14, 2023 and is expected to go into effect in September 2023.
Where can I learn more about eRINs?
Vertically-integrated RNG developers like Kinetrex Energy are best positioned to partner with the automotive industry as it leverages eRINs and advances the electric vehicle market. With deep regulatory and operational experience, RNG developers maintain the relationships and expertise needed to ensure compliance and maximum value generation.