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EPA announced in a final rule  on July 2 that wastewater-derived transportation fuels would qualify as cellulosic biofuels in the Renewable Fuel Standards (RFS), which will provide a potential new source of revenue for clean water agencies that produce transportation fuels from biogas. This decision achieves a goal of the Water Resources Utility of the Future (UOTF) efforts to have EPA and other federal agencies fully recognize that fuels produced at wastewater utilities are renewable. The newly approved RFS cellulosic fuel production methods, or “pathways,” that apply to publicly owned treatment works (POTWs) are compressed and liquefied natural gas produced from POTW biogas and electricity produced from biogas that is used to power electric vehicles.

EPA’s decision is a direct result of a July 15, 2013 letter  sent by NACWA in response to the Agency’s proposal  to allow landfill gas to qualify as a cellulosic biofuel, urging EPA to include POTW biogas in this determination as well. EPA responded positively to NACWA’s request, and the Association worked with the Water Environment Federation (WEF) and the Water Environment Research Foundation (WERF) as part of the UOTF effort to provide EPA with additional data to justify this decision.

NACWA will be working to increase its understanding of how the program operates and how utilities can participate in the program. Member Agencies that are producing transportation fuel from biogas, or are considering adding this type of program, are encouraged to contact Cynthia Finley at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Renewable Fuel Standards Program Background

The RFS program was created under the Energy Policy Act of 2005 and expanded by the Energy Independence and Security Act (EISA) of 2007. The program establishes minimum volumes of renewable fuel that must be used for transportation fuel. Oil refiners, blenders, and gasoline/diesel importers must meet their RFS obligations by selling the required biofuels volumes or by purchasing Renewable Identification Numbers (RINs), which are the credits used by EPA to track compliance. The RFS recognizes four categories of fuels: conventional biofuels, cellulosic biofuels, biomass-based diesel, and advanced biofuels. Cellulosic biofuels must be derived from at least 75 percent cellulose, hemicellulose, or lignin content and must have lifecycle greenhouse gas emissions that are at least 60 percent less than the baseline. The baseline for POTW biogas is flaring. Part of NACWA’s reasoning for requesting that fuels from POTW biogas be classified as cellulosic is that RINs from cellulosic biofuels have been the most profitable of the fuel types.

The volume of cellulosic and advanced biofuels used for transportation fuel is required by the EISA to increase each year, although goals for overall volume of cellulosic biofuels are higher than advanced biofuels. EPA sets the specific required volumes each year, but this has been problematic for cellulosic and advanced biofuels since production of these fuels has fallen far short of EPA’s requirements, resulting in retroactive lowering of the required volumes. For example, the cellulosic biofuel volume for 2013 was set by the EISA at 1 billion gallons, but EPA set the RFS program target at 6 million gallons. EPA was forced to lower this requirement in April 2014 to 810,000 gallons – the actual volume of cellulosic biofuels that were produced in 2013.

POTW Biogas Pathways Approved

EPA’s new final rule approves additional cellulosic pathways for several types of fuels, since the Agency was determined that they met the cellulosic content and GHG emission reductions levels necessary for cellulosic biofuels.  Compressed and liquefied natural gas produced from POTW biogas and electricity produced from biogas that is used to power electric vehicles are now classified as cellulosic biofuels.  In addition, “biogas from waste digesters” is classified as a new advanced biofuel pathway.  These types of fuels are eligible for RINs, which utilities can sell to the fossil fuel refiners, blenders, and importers that must meet RFS quotas.

Implications for POTWs

Only a few POTWs are currently producing transportation fuels from biogas, but utilities may find these types of projects more feasible if they are able to sell RINs for their fuel production. NACWA will be considering how to assist member agencies with participation in the RFS program, and will work with the Energy Workgroup of the Utility & Resource Management Committee to determine what type of information will be most useful to members.

Member agencies that are currently considering transportation fuel projects or that would be interested in learning more about these types of projects should contact Cynthia Finley at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .