a few key items to keep in mind for every project. First, all on-highway transportation fuels in the US must have a Part 79 registration. To obtain Part 79 registration, a company must complete a government-regulated prod- uct specification and Health Effect Testing (HET) programme (Tier 1 and 2 testing) at an authorised laboratory. This typically involves running a significant amount of fuel for a substantial time in a designated car, followed by a detailed comparison to reference fuel databases. For the project planning of an innovative, not yet proven, low-carbon fuel investment, both the costs and time required for Part 79 should be included. Second, when applying for a petition for the use of a new feedstock, the USEPA will require a feedstock plan, including items like traceability. For waste-based feedstocks, the USEPA requires traceability from the restaurant to usage. For woody biomass, there are specific requirements related to the location, year of planting, forest manage- ment, and traceability. The US Department of Energy (DOE) is optimistic about this pro - cess and required feedstock availability. In a study released in March 20241, the DOE’s Bioenergy Technologies Office (BETO)
Active discussion on program me Legislation introduced Legislation passed Program me implemented
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British Columbia and the country of Canada both have program me s *
Figure 3 Overview of North American LCFS programmes Courtesy: EcoEngineers
renewable fuel produced. The value of RINs fluctuates based on renewable fuel supply and demand dynamics. It can be traded among obligated parties – refiners and importers of refined fuel – to meet their prescribed RVO requirements. Additionally, LCFS credits are generated based on the reduc - tion of the CI of fuels and, like RINs, can be traded in the market. At the time of writing, LCFS credits are available in California, Oregon, Washington, and New Mexico. California was and is the front-runner, while many other states are cur- rently considering LCFS-type programmes (see Figure 3 ). When evaluating an investment in renewable fuels, it is essential to understand the market values of RINs and LCFS credits. It is also crucial to understand the timeline for when a project can begin to monetise credits. Financial due diligence reports can sometimes be overly optimistic, often assuming credits will be available immediately upon start-up. However, it is important to recognise that credits are not accessible until production meets all compliance requirements and feed- stock, process, and fuel products have gained approval from regulatory and/or voluntary entities. This principle applies to both regulated and voluntary low-carbon fuel markets. RIN prices are not solely dependent on market data. RIN prices are typically dependent on supply and demand, as well as rules and targets related to buying and selling of renewable transposition fuels (see Figure 4 ). In the case of biomass-based diesel, the USEPA’s multiyear RFS rule allows for minimal growth despite large investments in new facilities. For example, the USEPA’s multiyear RFS rule states that there is only potential demand growth of 100 million RINs per year from 2022 through 2025, despite a
estimated that more than 70% of US fuel demand can be supplied from biomass, including 400 million tons per year of cellulosic purpose-grown energy crops on about 7% of cropland and 9% of agricultural lands overall by 2050. Lastly, although not always required like it is for renewable natural gas (RNG), it is strongly encouraged that renewable fuel producers, especially foreign entities and entities with complex feedstock supply chains or foreign feedstock, enroll in the USEPA’s RFS Quality Assurance Program (QAP). This helps producers ensure that their low-carbon fuel complies with the RFS regulation and prevents fraudulent activities. Established in 2014, the USEPA’s QAP programme provides a means for ensuring that RINs are properly generated through audits of renewable fuel production conducted by independent third parties. It also provides an affirmative defence for the transfer or use of invalid RINs that had been verified under an approved QAP. It even defines the conditions when RINs must be replaced and a process for determining who will replace the RINs. This is highly desired in the market, and buyers often do not accept the fuel without making sure it is fully in compliance. The USEPA collaborates with independent third-party consult - ants like EcoEngineers and others to develop procedures for any specific verification pathway. The concept is like the verification of other carbon claims in California, Europe, or voluntary markets; however, for the RFS, it is still voluntary. ROI risks and low-carbon fuel projects In the US, RINs are the currency of the RFS programme, representing a unique identifier assigned to each gallon of
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