Proposed Change to RVO Calculation Concerns RNG Industry

By Arlene Karidis, Waste 360.

The Environmental Protection Agency (EPA) is proposing a change in how it calculates the renewable volume obligation (RVO) as it pertains to cellulosic fuel. And many investors in renewable natural gas (RNG) worry that if it passes as it is, it would create an oversupply of product and could disincentivize RNG use for transportation.

The RVO is an assessment, in the form of a draft rule, to set biofuel volumes that parties must purchase for compliance with the Renewable Fuel Standard (RFS), which mandates that a percentage of annual fuel consumption come from renewable fuels, advanced biofuels, and cellulosic biofuels. The latter is a subset of advanced biofuel with the most stringent requirements; it must achieve at least 60 percent greenhouse gas emission reduction.

Cellulosic fuel’s inclusion in the RFS has sparked more projects and driven growth of this commodity.

The proposed change would mean beginning Nov. 30, 2017, gas production data from 2016 would be compared to 2017 data to develop growth rate percentage.