Renewable Fuel Standard
RFS
The Renewable Fuel Standard is a federal policy administered by the EPA, which requires a certain volume of renewable fuel is used to replace petroleum transportation fuels consumed in the United States each year. The goal of the RFS is to replace 36 billion gallons of petroleum-based fuels with renewable fuel by 2022.
Renewable Identification Numbers
RINs
The volume of renewable fuel added to or replacing conventional fuel in the national pool is tracked via Renewable Identification Number (RIN). Refiners and blenders ("obligated parties, in the text of the regulation) use RINs to demonstrate they have met their annual renewable volume obligation. Each RIN represents 1 ethanol gallon equivalent of replacement fuel. 1 dekatherm of renewable natural gas generates 11.727 D3 RINs
D code
D3, D4, D5, D6, D7
D codes are categories representing the different types of Renewable Identification Number (RIN), and include renewable fuel (D6), advanced biofuel (D5), biomass-based diesel (D4), cellulosic biofuel (D3), or or cellulosic diesel (D7). RINs are assigned a "D" code based on lifecycle greenhouse gas reductions.
D3 RIN
D3 RINs are generated from the production of ethanol or methane dispensed as CNG or LNG produced from cellulose, hemicellulose or lignin materials. Methane produced from these feedstocks is commonly referred to as cellulosic biomethane. Production in this category has not met the statutory volumes, giving EPA authority to set annual obligations and make Cellulosic Credit Waivers available.
obligated party
For the RFS, an obligated party is any refiner or blender that produces gasoline or diesel fuel in the U.S. is required by law to purchase RINs
cellulosic biomethane
Renewable fuel produced from cellulose, hemicellulose or lignin. Cellulosic biofuel must reduce lifecycle greenhouse gas emissions by at least 60%; compared to the petroleum baseline.
renewable natural gas
RNG
Renewable natural gas (RNG) is pipeline grade methane derived from organic waste materials such as food waste, garden and lawn clippings, and animal and plant-based material. It can also be derived from degradable carbon sources like paper, cardboard and wood. RNG is produced when biogas is cleaned and conditioned to remove or reduce non-methane elements. The RNG is processed so it’s interchangeable with traditional pipeline-quality natural gas to ensure the safe and reliable operation of the pipeline network and customer equipment. RNG is extremely versatile, and can be delivered by the nation’s extensive pipeline infrastructure.
Renewable Volume Obligation
RVO
Each year, EPA sets the total volume of renewable fuels Obligated Parties must replace. This is called the Renewable Volume Obligation, or RVO. Obligated Parties’ individual RVOs are assigned by EPA based on the volume of gasoline or diesel they supply to the national fuel pool.
Low Carbon Fuel Standard
LCFS
The Low Carbon Fuel Standard is a program designed to encourage low-carbon fuel is California. The LCFS is performance-based and fuel-neutral, thus allowing the market to determine how the carbon intensity of California's transportation fuels will be reduced. The program assigns fuels a carbon intensity (CI) based on a greenhouse gas lifecycle assessment which includes direct emissions associated with producing, transporting, and using the fuels.
biogas
Raw methane gas, CH4, produced by the breakdown of organic matter in the absence of oxygen. Biogas can be produced from raw materials such as agricultural water, manure, municipal waste, plant material, sewage, green waste or food waste. Biogas is a renewable energy source.
biomethane
Biogas that has been processed and is ready for injection into the natural gas pipeline.
Cellulosic Waiver Credit
CWC
In the cellulosic category, Obligated Parties may purchase a Cellulosic Waiver Credit (CWC) from EPA to meet it’s D3 obligation when the supply is less than the demand.It is calculated as the greater of: $0.25 adjusted for inflation compared to 2008 Or, $3.00 less the wholesale price of gas adjusted for inflation compared to 2008. The price of the CWC is determined by EPA. The 2019 CWC is $1.77. CWC can only be purchased by an Obligated Party and cannot be traded.
allowances
greenhouse gas reduction
California Air Resources Board
CARB
AB32
California Environmental Quality Act Mitigation
Climate Action Reserve
CAR
California compliance offset
Additionality
Projects may only count emissions reductions that are "additional to what otherwise would have occurred in the absence of the certified project activity" (environmental additionality). These reductions must be "real" and "measurable" and must be quantified against a project baseline against which the additionality of the project can be measured and tested. Central to the discussion of additionality is that of what constitutes a project baseline.
Carbon Disclosure Project
CDP
emissions reduction credits
ERCs
ERCs represent pollution that is no longer being emitted. They are certified reductions of VOCs, NOx, SO2, PM-10, ROGS or CO2 from facilities in non-attainment areas. A company that retained the right to emit a given quantity of a pollutant into the air, and voluntarily lowered or eliminated those emissions may apply to have those emissions ‘certified.’
Discrete Emission Reduction Credits
DERs
DERs are created by temporary reductions against permitted levels under voluntary open market trading rules (OMTR) adopted by individual states. Currently New Jersey, Connecticut, Massachusetts, New Hampshire, Michigan, and Texas have promulgated OMTRs of some type. While some states certify DERs, others allow self-certification with third-party verification. These credits are usually traded to existing major emission sources for compliance with Reasonably Available Control Technology (RACT). DERs are created by temporary reductions against permitted levels under voluntary open market trading rules (OMTR) adopted by individual states. Currently New Jersey, Connecticut, Massachusetts, New Hampshire, Michigan, and Texas have promulgated OMTRs of some type. While some states certify DERs, others allow self-certification with third-party verification. These credits are usually traded to existing major emission sources for compliance with Reasonably Available Control Technology (RACT).
Environmental Attribute
EA
Average Weighted Price
A calculation used to determine price taking into account the quantity of allowances sold
Banking
The process of registering emission reduction credits with the proper regulatory agency. After credits are "banked", they can be saved for future use or sold to another company.
Clearing Price
price at which a buyer and seller agree to transact a trade
Compliance period
A calendar year, beginning January 1 and ending December 31 of each year in which renewable energy credits are required of a competitive retailer.
Exercise Price
A price at which the stock or commodity underlying a call or put option can be purchased (call) or sold (put).
Fugitive Emissions
Fugitive emissions are intentional or unintentional releases of gases from anthropogenic activities such as the processing, transmission or transportation of gas or petroleum. In particular, they may arise from the production, processing, transmission, storage and use of fuels, and include emissions from combustion only where it does not support a productive activity (e.g., flaring of natural gases at oil and gas production facilities).