The U.S. renewable energy sector is currently undergoing a period of profound regulatory transformation. Driven by a renewed emphasis on domestic energy production and security, recent legislative and administrative actions have introduced significant shifts in the frameworks governing Renewable Energy Certificates (RECs), Renewable Identification Numbers (RINs), and Renewable Natural Gas (RNGs). For businesses operating in these markets, the challenge is no longer just about meeting existing obligations but about adapting compliance strategies to a rapidly changing landscape, ensuring adherence while simultaneously identifying new opportunities. This article explores the key regulatory updates and offers strategic guidance for navigating this dynamic environment.

‍

Renewable Energy Certificates (RECs): Navigating Post-OBBBA Compliance

Renewable Energy Certificates (RECs) are the foundational instruments for verifying renewable electricity generation and consumption in the U.S. market. They represent the environmental attributes of one megawatt-hour (MWh) of electricity generated from a renewable source. RECs are crucial for compliance with state-level Renewable Portfolio Standards (RPS) and for companies pursuing voluntary sustainability and net-zero goals.  

‍

The "One Big Beautiful Bill Act" (OBBBA) and its Impact

The enactment of the "One Big Beautiful Bill Act" (OBBBA) on July 4, 2025, has introduced substantial changes to federal clean energy tax credits, particularly impacting wind and solar projects. The OBBBA accelerates the phase-out of key incentives like the Section 45Y Production Tax Credit (PTC) and Section 48E Clean Electricity Investment Tax Credit (ITC) for these technologies. New wind and solar facilities generally must commence construction by July 4, 2026, or be placed in service by December 31, 2027, to qualify for these credits, a significantly shorter window than previously available.  

This accelerated phase-out is projected to lead to delays or cancellations of numerous clean energy projects, with analyses estimating a reduction of nearly 70 gigawatts in solar and wind capacity additions by 2030. Such a reduction directly impacts the future supply of RECs, potentially leading to supply constraints and increased price volatility in the compliance market. The increased cost of developing wind and solar projects due to the loss of tax credits is also expected to translate into higher electricity costs for consumers and impact Power Purchase Agreement (PPA) pricing.  

‍

Adapting REC Compliance Strategies

Despite these federal disincentives, the voluntary REC market has demonstrated surprising resilience, with corporate sustainability and ESG commitments continuing to drive demand. This divergence necessitates a nuanced approach to REC compliance:  

• Proactive Supply Management: Businesses relying on RECs for compliance or voluntary targets should assess their future supply needs in light of potential constraints from slowed new project development. Exploring forward contracts for REC vintages (e.g., 2027-2030) may be a prudent strategy to secure future supply and mitigate price risk.  
• Leveraging State-Level Policies: As federal support shifts, state-level policies and Renewable Portfolio Standards (RPS) will become increasingly critical drivers for renewable energy development and REC generation. Companies should intensify their monitoring of state-specific regulations and incentives, as these may offer more stable and predictable pathways for REC procurement.  
• Diversifying Procurement: While wind and solar face headwinds, other clean energy technologies like nuclear, geothermal, and battery storage largely retain their ITC incentives under the OBBBA, with later phase-down schedules. Exploring RECs from these sources, where available, could offer diversification.  
• Enhanced Due Diligence: With potential supply shifts, ensuring the integrity and eligibility of RECs becomes even more critical. Adhering to robust tracking systems and verification processes remains paramount to prevent double counting and ensure compliance.  

‍

Renewable Identification Numbers (RINs): Navigating the Evolving RFS Landscape

Renewable Identification Numbers (RINs) are the compliance currency of the federal Renewable Fuel Standard (RFS) program, which mandates minimum volumes of renewable fuels blended into the U.S. transportation fuel supply. Obligated parties, primarily fuel refiners and importers, must acquire and retire RINs to demonstrate compliance with their Renewable Volume Obligations (RVOs).  

‍

Key Regulatory Updates: EPA's Proposed RFS Rule for 2026-2027

On June 13, 2025, the EPA unveiled its proposed "Set 2" RFS rule for 2026 and 2027, introducing significant changes to the RIN market.  

• Increased RVOs: The proposed rule sets the highest ever total renewable fuel volumes, with 24.02 billion RINs for 2026 and 24.46 billion RINs for 2027, representing a 9.5% increase from 2025 to 2027. Biomass-based diesel (BBD) RVOs are projected to increase substantially, from 5.36 billion RINs in 2025 to 7.12 billion in 2026 and 7.50 billion in 2027. The implied conventional renewable fuel mandate (primarily corn ethanol) is maintained at 15 billion gallons for both years.  
• 50% RIN Value Reduction for Imports: A transformative change is the proposed reduction in RINs generated for imported renewable fuel and fuel produced from foreign feedstocks. Starting in 2026, these fuels would generate only 50% of the RINs compared to purely domestic renewable fuel. The EPA's rationale is to bolster national energy independence, strengthen domestic markets for U.S.-grown crops (like corn and soybeans), and promote U.S. production, aligning with the "American First" energy philosophy. This aims to redirect economic benefits of the RFS program towards American farmers and rural communities, reducing reliance on volatile global fuel and commodity trade dynamics.  
• Elimination of eRINs: The "Set 2" rule also proposes removing renewable electricity (eRINs) as a qualifying renewable fuel under the RFS program, meaning no RINs would be generated for electricity used in motor vehicles in the future.  

‍

Adapting RIN Compliance Strategies

These proposed changes necessitate a strategic re-evaluation of RIN compliance:

• Prioritize Domestic Sourcing: The 50% RIN value reduction for imported biofuels and foreign feedstocks creates a strong incentive to prioritize domestically sourced biofuels. Obligated parties should review their procurement strategies to maximize the use of U.S.-produced feedstocks and fuels to optimize RIN generation and minimize compliance costs.  
• Re-assess Blending Strategies: The increased RVOs for biomass-based diesel and advanced biofuels will require adjustments to blending strategies. Companies should ensure their blending operations are optimized to meet these higher mandates efficiently.  
• Monitor Final Rulemaking: The proposed rule is currently open for public comment until August 8, 2025, with the EPA intending to finalize it by October 31, 2025. Businesses must stay informed of the final decisions, particularly regarding small refinery exemptions (SREs), which could still influence final percentage standards.  
• Leverage Market Intelligence: The emphasis on domestic production and potential shifts in global trade dynamics will introduce new layers of market volatility. Robust market intelligence is crucial for anticipating supply-demand imbalances and price fluctuations, enabling more effective risk management.  

‍

Renewable Natural Gas (RNG): Capitalizing on New Incentives

Renewable Natural Gas (RNG) is pipeline-quality gas derived from organic waste sources like landfills, wastewater treatment plants, and livestock farms. It serves as a direct substitute for fossil natural gas and offers significant environmental benefits by capturing methane emissions. The growth of the RNG market has been driven by federal and state policies, including the RFS and state LCFS programs.  

‍

Regulatory Developments: The Renewable Natural Gas Incentive Act of 2025

A significant recent development is the introduction of the bipartisan Renewable Natural Gas Incentive Act of 2025 (S. 1252/H.R. 2596) in April 2025.  

• Proposed Tax Credit: This legislation proposes a $1.00 per gasoline gallon equivalent tax credit for RNG used or sold as transportation fuel, applicable through 2035. This long-term incentive aims to encourage substantial investment and accelerate RNG adoption, particularly in the transportation sector, by lowering fuel costs and making RNG more competitive with diesel.  
• Shift from Mandates to Incentives: This Act marks a notable shift in federal policy for RNG, moving from the mandate-based RFS system towards a direct financial incentive model. This approach is seen as less complex and aims to drive adoption through direct financial support, funded directly through the federal budget. This is particularly relevant given the comparatively bearish cellulosic biofuel mandates in the proposed RFS rule for 2026-2027.  
• Alignment with Broader Goals: The Act aligns with broader legislative efforts to reduce greenhouse gas emissions, enhance U.S. energy security, and expand access to affordable, low-carbon fuel alternatives.  

‍

Adapting RNG Compliance and Growth Strategies

The proposed RNG tax credit presents significant opportunities for businesses:

• Proactive Project Development: Companies involved in RNG production or utilization should proactively assess how the proposed $1.00/gallon tax credit could enhance the economic viability of new projects or expand existing operations.  
• Integrate into Decarbonization Plans: Given RNG's strong greenhouse gas reduction potential, businesses can integrate RNG procurement and use more deeply into their overall sustainability and net-zero strategies, leveraging the new federal incentive.  
• Monitor Legislative Progress: While proposed, the Act's passage through Congress is crucial. Staying informed on its legislative progress and any potential modifications is essential for strategic planning.
• Leverage State-Level Support: State-level initiatives, such as Oregon's SB 98 and California's LCFS and Dairy Digester Research and Development Program (DDRDP), continue to be important drivers for RNG market growth and should be integrated into compliance and investment strategies.  

‍

The U.S. renewable energy commodities market is undergoing a dynamic transformation, characterized by significant policy shifts impacting RECs, RINs, and RNGs. The "American First" energy agenda, manifested through the OBBBA and the EPA's proposed RFS rule, is reshaping supply chains, incentivizing domestic production, and introducing new compliance complexities. Concurrently, the proposed Renewable Natural Gas Incentive Act of 2025 signals a new era of direct financial support for RNG.

For businesses, navigating this evolving environment requires more than just adherence to current regulations; it demands proactive adaptation, strategic foresight, and robust market intelligence. Firms like AFS Commodities are uniquely positioned to provide the expert guidance necessary to:

• Optimize Compliance: Develop agile compliance strategies that account for accelerated tax credit phase-outs for RECs, the preferential treatment for domestic RINs, and the new RNG tax credit.
• Mitigate Risk: Utilize real-time market intelligence to anticipate supply-demand imbalances and price volatility across all three commodity markets.
• Identify Opportunities: Pinpoint emerging opportunities in the resilient voluntary REC market, the re-shored domestic biofuel sector, and the newly incentivized RNG space.
• Leverage Expertise: Partner with specialists who can translate complex policy changes into actionable strategies, ensuring businesses not only meet their obligations but also thrive amidst the ongoing energy transition.

By embracing these strategic adjustments, companies can transform regulatory challenges into competitive advantages, securing their position in America's evolving renewable energy future.