Top 3 Takeaways — From Infocast’s RNG & SAF Capital Markets 2025
This July 15-16, 2025 event was my first opportunity to meet those involved in Renewable Natural Gas (RNG) project financing and development. As always, exposure to another branch of the fuels ecosystem brought lots of new learning.
Here’s the countdown on my Top 3 Takeaways from this event:
Number 3: Doom and Gloom
The second day of the conference began with a direct, explicit observation that the mood on Day 1 had been gloomy. This was a very astute opening observation. My notes from Day 1 are littered with quotes like: “it is risk-off”, there is “investor fatigue”, it is the “exact opposite of the gold rush days”.
On Day 1, I was straining to see if there are any signs of light at the end of the tunnel. Maybe if you have a “long-term off-take contract with guaranteed prices” and you are “really creative” in all aspects, you can raise some attention. But even then, “there is no appetite”.
Number 2: Excitement
On the morning of Day 2, after hearing the above astute observation about Day 1’s gloomy mood, I asked what the mood was like at last year’s meeting and was told it was “exciting”.
And this year’s Day 2 also set an exciting atmosphere, with stories of 30% growth in renewable natural gas production, new applications for RNG, innovations that are reducing costs for RNG application at all stages of the value chain, and credible expectation of expanding demand for RNG use in transportation, especially for over-the-road 18-wheelers equipped with the new Cummins X15N natural gas fueled engine.
In trying to reconcile this contrast in moods, it occurred to me that the excitement of Day 2 is all about what’s actually happening on the ground in this new All-American industry, and the gloom and doom of Day 1 is all about what’s happening in Washington in supporting it.
the excitement of Day 2 is all about what’s actually happening on the ground in this new All-American industry, and the gloom and doom of Day 1 is all about what’s happening in Washington in supporting it.
Number 1: Gut punch
From July 2024 to July 2025, the D3 Renewable Identification Number (RIN), which is the only mechanism for the Renewable Fuel Standard (RFS) to support this new All-American industry, fell from $3.40 to $2.10 per RIN. The mood on Day 1 reflected this gut punch.
On Day 2, Charles Love and others emphasized how subsidies like the D3 RIN are convincing people to switch to clean natural gas fueled vehicles, because the RIN value passes through to the truckers. When the RIN value is there, switching to the new natural gas platform is a lucrative proposition for the risk averse, intensely competitive over-the-road trucking industry, as Waste Management, UPS, Amazon, Frito Lay, and many other high quality truck fleets did long ago.
From a financial standpoint, this industry just got dealt a gut punch, which is the $1.30 fall in the D3 RIN.
From a financial standpoint, this industry just got dealt a gut punch, which is the $1.30 fall in the D3 RIN.
As part of my role on the RINs panel at this conference, I raised the question, why did the D3 RIN fall by $1.30 per RIN? — and then I proposed 3 specific causes:
- EPA partially waived some cellulosic volume mandates, after having first rejected that idea.
- EPA proposed setting the 2026 and 2027 cellulosic volume mandates at meaningless, non-binding levels, removing the driving force for the innovation happening on the ground.
- EPA proposed reinstating the cellulosic waiver credit, effectively overriding the fundamental purpose and function of the D3 RIN.
More than a gut punch, this is a 3-punch combination, with the 3rd blow being the knockout punch.
What is happening in Washington with RFS support for this new All-American industry? I would say the right word is abandon.
Recommendations
- EPA should fulfill its obligation to set meaningful cellulosic volume mandates for 2026 and 2027.
- EPA should take necessary steps to de-activate the cellulosic waiver credit for 2026 and 2027 so the D3 RIN can perform its function by floating to the level that ensures those mandates are met.
- Any company whose financial performance is affected by RINs should Get Hoekstra Research Report 10 and the ATTRACTOR spreadsheet
Get the Attractor spreadsheet, it is included with Hoekstra Research Report 10 and is available to anyone at negligible cost.
George Hoekstra
+1 630 330-8159
