Regulatory Framework

Chapter from the Renewable Fuels Processing Guide.

REGULATORY FRAMEWORK

Key Regulatory Programs

Program	Jurisdiction	Mechanism	Value Driver	Who Benefits	Administering Body	Notes
RFS (Renewable Fuel Standard)	US Federal	RIN credits (D4 for biomass-based diesel)	RIN price ($0.50-$2.00+)	Producers generate RINs	EPA	Obligated parties must retire RINs
LCFS (Low Carbon Fuel Standard)	California	CI-based credits	Credit price ($50-$200+/MT CO2)	Lower CI = more credits	CARB	Most valuable incentive for low-CI feedstocks
BTC (Blender's Tax Credit)	US Federal	$1.00/gal tax credit	Direct per-gallon credit	Blenders (often producers)	IRS	Historically on/off, check current status
45Z Clean Fuel Tax Credit	US Federal	CI-based production credit	Up to $1.00/gal (IRA)	Producers	IRS	Replaces BTC starting 2025, CI-based
RED III (Renewable Energy Directive)	European Union	GHG reduction certification	Compliance + value	Producers selling into EU	EU Member States	ISCC or RSB certification required
CFS (Clean Fuel Standard)	Canada (British Columbia)	CI-based credit system	Credit price (variable)	Low-CI fuel producers	BC Government	Similar to CA LCFS

Carbon Intensity (CI) Scoring

Carbon Intensity (gCO2e/MJ) is the key metric driving economic value for renewable fuels.

CI Lifecycle Components:
1. Feedstock Production/Collection: farming, harvesting, rendering, collection
2. Feedstock Transportation: truck/rail/ship to processing facility
3. Processing/Conversion: energy use, H2 source, process emissions
4. Product Transportation: to blending terminal/end user
5. End Use: combustion (typically counted as biogenic = zero for biomass)

CI Reduction Strategies (highest impact):
• Use waste feedstocks (UCO, tallow, brown grease) — lowest feedstock CI
• Green hydrogen (electrolysis from renewable power) — eliminates SMR CO2
• Renewable natural gas for process heat — reduces Scope 1 emissions
• Carbon capture on hydrogen plant — direct CO2 reduction
• Efficient logistics — shorter transport distances
• Renewable electricity for utilities — reduces grid emission factor

Typical CI Scores (CA LCFS):
• Petroleum diesel baseline: ~100 gCO2e/MJ
• Soybean oil HVO: ~40-50
• UCO HVO: ~15-25
• Tallow HVO: ~20-30
• UCO HVO + green H2 + CCS: <10 (potentially negative with biogas)

Source: Renewable_Fuels_Processing_Guide_v1.xlsx · sheet “Regulatory Framework”

© 2026 Inflection Point Engineering, LLC. All rights reserved. The content of this page — including calculation methods, reference data, written analysis, interactive tools, and source code — is the intellectual property of Inflection Point Engineering, LLC and is protected under applicable copyright, trademark, and trade secret laws. Unauthorized reproduction, redistribution, modification, or derivative use in whole or in part is prohibited without prior written consent.

Disclaimer. This material is provided for informational and educational purposes only and does not constitute professional engineering advice. Calculations, reference data, and methodologies are based on published standards and accepted engineering practice but are not a substitute for engineering judgment, site-specific analysis, or review by a licensed Professional Engineer. Inflection Point Engineering, LLC makes no warranties, express or implied, regarding the accuracy, completeness, or fitness for a particular purpose of any content presented here, and shall not be liable for any direct, indirect, incidental, or consequential damages arising from its use. Users assume all risk associated with applying this content to real-world design, operations, or decisions.