RFS & LCFS Program Updates
45z, RFS, British Columbia, Washington, Oregon, California Drama
Senate Finance 45Z
The Senate made some changes to the 45Z Clean Fuel Tax Credit:
Indirect Land Use Change (iLUC) not counted for the tax credit
Extends out to 2031
Foreign Feedstock get 80% of tax credit vs 100% for Domestic
SAF credits go to max $1/gallon from $1.75/gallon
Renewable Fuel Standard
Big news last Friday as the EPA released the Proposed RVOs for 2026-2027
D3: supply of RNG is not constrained but demand is due to CNG/LNG trucks
D4: drops RD RINs per gallon to 1.6 and foreign feedstock/fuel to 50%
D5: non-cellulosic advance less than 200 million gallons supply (~250 million RINs), total D5 RIN RVO 9.02-9.46 billion RINs (shortage made up by D4 RINs)
D6: estimating 14 billion gallons ethanol blending (mainly corn ethanol) but EPA is still using the EIA AEO from 2023 for gasoline demand in the proposed volumes.
D4 RINs jumped on Monday after the news due to not only the overall RVOs (and the current not-so-great production/blending margins) but also due to EPA’s forecast on the amount of aggregate RINs generated per gallon of fuel.
British Columbia
In the most illiquid LCFS market in North America, the BC LCFS traded at an avg price of $245 CAD/mt with a total number of xfers at 6 during the month of May, an improvement of an extra 2 trades vs April 2025.
The spread between the Max and Min prices in the BC LCFS world finally dropped below $50 CAD/mt in May.
