Biogas groups sue EPA over rule cutting renewable electricity from RFS

Biogas Works for America LLC and Biogas Works Coalition on June 1 sued the U.S. Environmental Protection Agency in the U.S. Court of Appeals for the D.C. Circuit, setting up a precedent fight over whether renewable electricity can still count as a renewable fuel under the Renewable Fuel Standard. The case challenges EPA’s final Set 2 rule, which stripped so-called eRINs from the program and, in the process, cut off a potential compliance pathway for electricity generated from biogas.

The challenge landed in the D.C. Circuit docket on June 3, just days before the rule is set to take effect June 15. EPA finalized the Set 2 package on March 27 and published it in the Federal Register on April 1. In the final text, the agency declined to approve any of the eRIN pathway petitions it had received and made the exclusion of renewable electricity explicit, after its March proposal had already framed the change as a permanent and comprehensive removal from the program.

For biogas developers, the stakes go beyond one revenue stream. An eRIN structure would have broadened demand for biogas-derived electricity and given lenders and investors another way to value dairy RNG, landfill gas and other power-linked projects. By removing renewable electricity from the RFS framework, EPA narrowed the set of pathways that can monetize low-carbon biogas and left developers more exposed to state programs, direct fuel use and other policy channels.

EPA’s final rule also includes a 70 percent reallocation of small refinery exemptions granted for 2023 through 2025. The agency says the Set 2 rule will generate more than $10 billion for rural economies and create over 100,000 jobs, language aimed at casting the rule as a broader market reset even as the eRIN cut removes one of the sector’s most closely watched growth options.

The Biogas Works petition is already part of a wider legal crossfire around the Set 2 rule. The D.C. Circuit has consolidated it with other challenges from the RNG Coalition, American Fuel & Petrochemical Manufacturers, the Center for Biological Diversity, Sierra Club, small refiners and several refining companies. That makes the eRIN dispute more than a biogas fight, it is now part of a larger test of how EPA defines renewable fuel eligibility under the RFS and how far the program can stretch into adjacent decarbonization pathways. If the challengers win, the ruling could reopen an important crediting route for biogas power; if EPA prevails, the agency will have drawn a much tighter line around what qualifies inside the program.