Breaking Through the Bottleneck Forest Concepts is taking on the woody biomass-based industry’s biggest challenge—drying.
By Caitlin Scheresky
20 RNG
From Refuse to Renewable Fuels
Turning municipal garbage into cellulosic biofuels, WāstAway Fuels is deploying a process known as cellular explosion. By Katie Schroeder
26 MARKETS
Reading the Road Ahead
A recent OPIS webinar examined evolving biofuel policy and what it means for market dynamics, investment decisions and growth ahead. By Keith Loria
CONTRIBUTIONS
32 POLICY
New Mexico Clean Transportation Fuel Program: New Market Opportunity for Biofuels By Graham Noyes
34 POLICY
Canada’s Clean Fuels Market: What 2025 Clarified and What 2026 Will Test By Sally Taylor
36 MARINE FUELS
2026 Outlook for Maritime Biofuels
By Brittany M. Pemberton, Shailesh Sahay and Lauren E. Davidson
ANNA SIMET DIRECTOR OF CONTENT & SENIOR EDITOR
The Same Song, Louder Now
At present, many world events are making headlines. How they affect each of us depends on a combination of factors—perhaps the most obvious being where we live. Almost immediately, the war with Iran spurred a jump in oil prices; it was only a matter of days before that was reflected at the pump. The average across all U.S. states increased by 60 to 70 cents per gallon in just a few weeks—a 27% gain and the highest prices seen since 2023, post-Hurricane Katrina. For jet fuel, it’s worse. U.S. jet fuel prices have risen 45% in just 10 days. In Asia, costs have increased 72% to record highs.
For those of us in the biofuels and bioenergy industry, this is the time to reiterate, embolden, highlight and emphatically push forward one of the many positive facets of what we we do, and that’s helping facilitate energy independence. We’ve always touted this benefit, but now may be the time to gain some traction.
Our industry sectors are impactful. They are meaningful. They are a crucial component of an all-of-the-above strategy to achieve energy independence and reduce carbon emissions. The springboards needed to get there—tax credits, policy incentives, grants, loans and programs designed to expedite implementation—provide critical support. They are not simply line items that can be struck from budget packages without negative repercussions or without setting us back. And whether times are favorable or less favorable for bioenergy or biofuels, there are people and companies who continue to do this work because they believe in it.
For example, in our page-20 feature, “From Refuse to Renewable Fuels,” Associate Editor Katie Schroeder profiles WāstAway Fuels’ Cellulator technology, which transforms household trash into a solid, pelletized biofuel or a feedstock for renewable natural gas. The company runs a plant in Morrison, Tennessee, and believes its technology could be replicated and used in municipalities around the world to help manage mounting waste problems. Says CEO Steve Napolitan, “Waste, by definition, is something that is no longer useful to people, and with it we can make energy, which everyone needs right now … We take what someone no longer wants and make something everyone wants. That gets me up every day.”
As for our contribution articles, all three focus on policy—the lifeblood of sectors still maturing compared to oil and gas, and thus are reliant on support to reach competitiveness. From the Canadian biofuel landscape to opportunities in maritime decarbonization to the newly implemented New Mexico Clean Transportation Fuel Program, there’s a common thread: Domestically produced energy and energy independence are critical to national security. And the environmental benefits are not just a bonus—they’re part of why this industry is essential.
So, the bottom line? Our case hasn’t changed. We still have the same message that we always have—and like many times in the past, it’s been reaffirmed as of late. Let’s amplify our voices and keep spreading the word.
2026 Int’l Fuel Ethanol Workshop & Expo
JUNE 2-4, 2026
America’s Center, Saint Louis, Missouri
Now in its 42nd year, the FEW provides the ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. As the largest, longest-running ethanol conference in the world, the FEW is renowned for its superb programming. Powered by Ethanol Producer Magazine, the FEW maintains a strong focus on commercial-scale ethanol production, policy, plant management, advancing technology and near-term research and development. The event draws more than 2,400 people from over 31 countries and from nearly every ethanol plant in the United States and Canada.
(866) 746-8385 | FuelEthanolWorkshop.com
North American SAF Conference & Expo
AUGUST 25-27, 2026
Greater Tacoma Convention Center, Tacoma, WA
Taking place in August, the North American SAF Conference & Expo, produced by SAF Magazine, in collaboration with the Commercial Aviation Alternative Fuels Initiative (CAAFI) and Canadian Council for Sustainable Aviation Fuels (C-SAF) will showcase the latest strategies for aviation fuel decarbonization, solutions for key industry challenges, and highlight the current opportunities for airlines, corporations and fuel producers.
(866) 746-8385 | SAFConference.com
2027 Int’l Biomass Conference & Expo
MARCH 2-4, 2027
Cobb Convention Center, Atlanta, Georgia
Now in its 20th year, the International Biomass Conference & Expo is expected to bring together more than 1000 attendees, 175 exhibitors and 75 speakers from more than 25 countries. It is the largest gathering of biomass professionals and academics in the world. The conference provides relevant content and unparalleled networking opportunities in a dynamic business-to-business environment. In addition to abundant networking opportunities, the largest biomass conference in the world is renowned for its outstanding programming—powered by Biomass Magazine—that maintains a strong focus on commercial-scale biomass production, new technology, and near-term research and development. Join us at the International Biomass Conference & Expo as we enter this new and exciting era in biomass energy.
CUSTOMER SERVICE COORDINATOR Brandon McGarry brandon.mcgarry@bbiinternational.com
Please check our website for upcoming webinars biomassmagazine.com/events/webinars
P ELLETIZ E OPPORTUNIT Y
Simplifying Actuation to Improve Reliability
As renewable energy production expands across biomass, waste-to-energy and alternative fuel facilities, material handling system reliability has become a critical priority. These plants operate in demanding conditions where uninterrupted flow control directly affects efficiency, safety and production continuity.
Renewable processing environments introduce challenges that place stress on mechanical systems. Facilities regularly handle materials with inconsistent density, high moisture levels, and abrasive ash or particulate matter. Operations also occur in dust-sensitive environments where safety and containment are essential. Combined with continuous production schedules, these factors make downtime especially costly. Within these systems, reliability at each control point—particularly valve actuation—plays a significant role in overall plant performance.
Traditional pneumatic actuation has long served as a standard approach in bulk material handling. While effective in many industrial applications, pneumatic systems introduce additional infrastructure and operational dependencies. Compressed air systems require consistent pressure, clean air lines and routine maintenance. In renewable environments where moisture, dust and particulate buildup are common, these variables contribute to performance variability and increased maintenance demands. As facilities focus on improving uptime and simplifying system architecture, they need actuation strategies that reduce dependencies and stabilize performance.
Electric Valve Actuation represents one such approach. Rather than focusing solely on the power source, the greater value lies in sim-
plifying how actuation systems function within complex processing environments. By reducing infrastructure requirements and failure points, simplified actuation designs help maintain more consistent valve performance.
Applications such as biomass feed systems, ash handling, dust collection discharge and alternative fuel processing require equipment operating reliably under high-cycle conditions while managing abrasive materials, temperature variation and moisture exposure. In these settings, reducing mechanical complexity can play a meaningful role in improving operational consistency.
To address these challenges, Plattco Corporation has introduced a patented Electric Valve Actuation solution developed specifically for harsh bulk material handling environments common in renewable processing. The design focuses on simplifying actuation architecture while maintaining the durability required for industrial conditions. This development builds on decades of engineering focused on durability and efficiency in valve technology. Earlier innovations such as the double flap valve—originally created to replace disposable valve solutions— demonstrated how more robust designs could reduce waste while improving long-term reliability.
As renewable infrastructure continues to scale, the need for dependable, low-maintenance systems will increase. Solutions that simplify actuation while supporting consistent valve performance offer facilities a practical path toward improved uptime, operational stability and longterm efficiency.
BIOMASS NEWS |
EIA: Biofuel Demand to Climb Through 2027, Despite Renewable Diesel Decline
The U.S. Energy Information Administration reduced its forecast for 2026 renewable diesel production in its latest Short-Term Energy Outlook, released March 10. Forecasts for biodiesel and “other biofuel,” defined to include sustainable aviation fuel (SAF), were maintained.
The EIA now expects renewable diesel production to average 230,000 barrels per day in 2026, down from the February outlook of 240,000 barrels per day. The agency maintained its forecast that renewable diesel production will average 280,000 barrels per day in 2027. Production averaged 190,000 barrels per day last year.
The agency expects net imports of renewable diesel to average -10,000 barrels per day this year and next year, compared to last month’s forecasts of -20,000 barrels per day. Net imports averaged -30,000 barrels per day last year.
The EIA reduced its forecast for 2026 renewable diesel consumption to 210,000 barrels per day, down from the February outlook of 220,000 barrels per day. Consumption is now expected to reach 270,000 barrels per day in 2027, up from last month’s forecast of 260,000 barrels per day. Renewable diesel consumption averaged 160,000 barrels per day in 2025.
The EIA maintained its forecast that biodiesel production will average 100,000 barrels per day in both 2026 and 2027, up from 80,000 barrels per day in 2025.
Net imports of biodiesel are expected to be zero this year and next year, unchanged from both last month’s forecast and reported net imports for 2025.
Biodiesel consumption is expected to average 100,000 barrels per day in 2026 and 110,000 barrels per day in 2027, up from last month’s forecasts of 90,000 barrels per day and 100,000 barrels per day, respectively. Biodiesel consumption averaged 80,000 barrels per day last year.
Production of “other biofuel”—defined to include renewable heating oil; renewable jet fuel, including SAF, alternative jet fuel and biojet; renewable naphtha; renewable gasoline; and other emerging biofuels in various stages of development and commercialization—is expected to average 40,000 barrels per day in 2026 and 50,000 barrels per day in 2027, unchanged from the February STEO. Production averaged 40,000 barrels per day in 2025.
Net imports of “other biofuel” are expected to remain zero this year and next year, unchanged from last month’s forecast and last year’s reported levels.
The EIA also maintained its forecast that consumption of “other biofuel” will average 40,000 barrels per day in 2026 and 50,000 barrels per day in 2027. Consumption averaged 40,000 barrels per day in 2025.
Jan. US Wood Pellet Exports Exceed 960,000 Metric Tons
The United States exported approximately 964,860 metric tons of wood pellets in January, up from 834,615 metric tons in December and 825,270 metric tons in January 2025, according to data released by the USDA Foreign Agricultural Service on March 12.
The U.S. exported wood pellets to more than a dozen countries in January. The United Kingdom was the top destination for U.S. wood pellet exports at 805,760 metric tons, followed by Denmark at 97,026 metric tons and the French West Indies at 43,119 metric tons.
The value of U.S. wood pellet exports reached $189.5 million in January, up from $164.19 million the previous month and $157.96 million in January 2025.
2025 Yielded Record-High Annual Facility Growth for RNG
The RNG Coalition released its data for 2025, indicating the North American RNG industry achieved historic growth in 2025, with 130 new operational facilities added to the North American RNG portfolio. This marks a second consecutive annual record high for facility growth, after a then-record 114 facilities were added in 2024, according to the coalition.
Strong growth in 2025 was propelled by historic development in food waste RNG facilities, with technological development and landfill diversion programs taking root across North America. Segmental growth figures included: operational food waste facilities grew by 54%; operational wastewater facilities grew by 4%; operational agricultural facilities grew by 31%; and operational MSW grew by 26%.
RNG Coalition said that it continues to rally support behind its Sustainable Methane Abatement and Recycling Timeline, which targets 1,000 operational facilities by 2030, after hitting its 2025 benchmark of 500 operational facilities in 2025, months ahead of schedule.
US Pellet Production Hits 1 Million Tons in October
U.S. manufacturers produced approximately 1 million tons of densified biomass fuel in October, according to the U.S. Energy Information Administration’s Monthly Densified Biomass Fuels Report. Sales of densified biomass fuel reached 970,000 tons during the month. The production total is among the highest monthly levels reported in the EIA dataset, with most recent months typically ranging between roughly 900,000 and 950,000 tons.
The EIA collected data from 74 operating manufacturers of densified biomass fuel to complete the report. The report does not include data on facilities with annual production capacities of less than 10,000 tons, which report data annually rather than monthly.
The manufacturers surveyed for October had a total combined production capacity of 13.03 million tons per year and collectively had the equivalent of 2,439 full-time employees.
Respondents purchased 2 million tons of raw biomass feedstock in October, produced 1 million tons of densified biomass fuel and sold 970,000 tons of densified biomass fuel. Production included 155,744 tons of heating pellets and 560,423 tons of utility pellets.
Domestic sales of densified biomass fuel in October reached 198,893 tons at an average price of $245.57 per ton. Exports in October reached 773,661 tons at an average price of $203.18 per ton.
Inventories of utility pellets expanded to 662,174 tons in October, up from 561,001 tons in September. Inventories of premium and standard wood pellets fell to 178,207 tons in October, down from 235,394 tons in September.
Data gathered by the EIA shows that total U.S. densified biomass fuel capacity reached 13.43 million tons in October, with all of
that capacity listed as currently operating or temporarily not in operation. Capacity included 1.97 million tons in the East, 10.67 million tons in the South and 797,700 tons in the West.
Mars Mineral Names
Woodward Business Manager
Mars Mineral, a global pelletizer manufacturer, is pleased to announce that Elliott Woodward has joined the company as business manager.
Woodward brings more than seven years of engineering and project delivery experience across the environmental, mining and industrial process sectors. Prior to joining Mars Mineral, he served as a senior process engineer at Burns & McDonnell in Denver. He previously held engineering roles with AECOM and Forsgren Associates Inc., where he focused on process design, environmental systems and project delivery for municipal and industrial clients.
In his new role, Woodward will focus on strengthening customer partnerships, supporting pelletizing and agglomeration projects from early feasibility through commercial scale operations, and expanding Mars Mineral’s presence in global markets.
Eliott Woodward Business Manager, Mars Minerals
The Rise of RNG
Project status in 2026
RNG operations grew by 315 facilities between 2021 and 2026.
2021 2022
Operational: 125
Under Construction: 27
Multiple dairy projects begin development in California, Wisconsin and Iowa, signaling the industry's shift from landfill gas toward agricultural feedstocks.
By Chloe Piekkola
RNG End Use by Sector
Average RNG facility build time: 2.5 years
2023
Operational: 165
Under Construction: 73
Project proposals surge as California becomes a the center for RNG development. Federal renewable fuel policies and credit markets strengthen investment across the industry
Operational: 214
Under Construction: 86
EPA finalizes Renewable Fuel Standard volumes through 2025, providing stability for RNG markets. 49 facilities come online as projects move from under construction to operational
RNG Hotspots Across the U.S.
Wisconsin: A hub for agricultural RNG, driven by the state’s large dairy industry supplying feedstock for transportation fuel
California: Most diverse RNG portfolio in the U.S., including agricultural, wastewater, and landfill gas projects
New York: Strong landfill gas development supporting pipeline injection and transportation fuel
38
Texas: A growing RNG hub, with large landfill gas projects supplying feedstock for transportation fuel.
2024 2025 2026
Operational: 282
Under Construction: 73
68 facilities move into operation as the industry shifts from rapid development into large-scale production.
Operational: 351
Under Construction: 116
RNG hits a peak construction year. Dairy becomes the dominant RNG feedstock category with 155 facilities.
Operational: 420
Under Construction: 114
Record Operational Year: 420 RNG facilities operating nationwide, marking the industr y's largest expansion to date.
BREAKING THROUGH THE BOTTLENECK
Forest Concepts is taking on the woody biomass-based industry’s biggest challenge—drying.
BY CAITLIN SCHERESKY
In an industry known for its innovation, one bottleneck stands above the rest: drying, the industry’s most expensive intermediary step. Between its constant demand for operator supervision, rapidly growing energy costs and all-or-nothing quality control outcomes, material drying presents a Sisyphean task waiting to be solved.
Enter Forest Concepts: a small, Washington state-based company with over 20 years of experience across environmental preservation, woody biomass conversion
and automatic material drying technology. David Lanning, vice president and mechanical engineer at Forest Concepts, notes that for most instances of dryer bottlenecking, the culprit is often variable moisture content.
“Let’s say you have a wood chip, and it’s going into the dryer. What day is it? Has it been raining? Has it been sitting in a pile? Was it harvested six months ago or yesterday? These all affect the internal moisture content of the wood,” he explains. “[Conventional] dryers don’t usually get left unat-
Forest Concepts holds over 20 years of expertise across environmental preservation, woody biomass conversion and automatic material drying technology.
tended for very long, so 25% of an operator’s day is probably spent trying to adjust and operate ahead of the curve.”
Dryers require experienced operators not only for temperature and bed depth adjustments, he notes, but for fuel rates and feedstock variability as well. And if operators aren’t careful, Lanning adds, that feedstock variability can lead to over- or under-drying. “If I have a 15% moisture content swing from morning to afternoon or after a rainfall and my dryer is not adjusted for that, I [either] don’t move as much
water, or I move too much water.” The solution to the drying bottleneck? Forest Concepts’ Advanced Drying Controls for belt dryers.
Becoming Forest Concepts
In 1998, now-Chief Technology Officer Jim Dooley founded Forest Concepts. Holding advanced degrees in agricultural engineering and forest resources/forest engineering, Dooley is described by CEO Mike Perry as the visionary behind the company. But before Forest Concepts be-
came known for its Advanced Drying Controls technology, it made its debut in environmental restoration.
“The Forest Service came to Jim and asked him to develop an erosion control mulch, something to use after wildfires to prevent the ash and stuff from getting into streams,” Perry says. In 2005, in partnership with the USFS Rocky Mountain Research Station and with funding from the Forest Service and the USDA-CSREES-SBIR program, Forest Concepts commercially released WoodStraw, an environmentally
friendly wood-strand mulch used for erosion control, fire rehabilitation and wildland construction. Perry credits Lanning with the design for this technology. “He developed the equipment to make the WoodStraw from low-grade veneer … and it was used on 35 major wildfires. We’ve since licensed it to two companies—one in Colorado and one in Oregon—that are producing it,” he says.
With a strong foot in the door to biofuels and a 2012 contract with the Department of Energy, Forest Concepts turned
to woody biomass conversion, producing the trademarked Crumbler Rotary Shear system. “A rotary shear is kind of like a beefy paper shredder,” Lanning says. “That core technology, when you change grain orientation, will make the Crumbles product, which is super flowable. In the two- to six-millimeter size, you’re looking at BBs to marbles, depending on what your downstream processes wants.”
The company turned to drying technology soon after—a step that can account for up to 70% of a pellet mill’s total energy when using raw wood chips. It has been in this shift to drying technology that Forest Concepts discovered its niche. In January of this year, the company was awarded the American Society of Agricultural and Biological Engineers AE50 Award for Innovation for its Advanced Drying Controls for belt dryers.
The innovation begins long before a dryer’s installation. Before a project begins, Forest Concepts presents a threephased program to clients. The first, preliminary system specification phase allows for guided discussions in which all design requirements, constraints and parameters,
ifications are mapped. The second phase offers system modeling using Forest Concepts’ software, Simulation of Preprocessing Systems for Techno-Economic Analysis (SiPS TEA), allowing capital and operating expenditure estimates, critical material attribute tracking, and energy source options to be adjusted. “SiPS TEA enables us to link different pieces of equipment together and model mass and energy balances. Unlike doing that in Excel, it’s super easy to change link pathways or adjust equipment parameters,” explains Lanning. Finally, the equipment layout and integration phase marks the finalized decisions for equipment, power specifications and connection points.
Eyes on the Prize
Lanning’s side of the process is in size reduction, which remains crucial to drying effectively. “If you need a dry product at the end and you can do size reduction first, your overall operating expense can be significantly lower,” he notes. “If you send it through the chipper, through a Crumbler, size reducer, and then the dryer—as opposed to a chip dryer and hammer mill, which would be a traditional pathway—you could save roughly 50% of your energy on
the dryer. And the dryer far outweighs any size reduction cost in terms of energy consumption.”
While Lanning’s specialty is the size reduction of the material, his brother, Chris Lanning, operates a model that allows for multiple adjustments, including bed depth, dryer airflow rate and temperature. “If we get a new material, we run what we call a research dryer apparatus (RDA) that is fully instrumented across multiple levels within the bed. You can model out the moisture migration, the moisture flow through the bed depth,” Lanning explains.
Mike Perry CEO, Forest Concepts
David Lanning Vice President, Forest Concepts
Founded in 1998 by CTO Jim Dooley, Forest Concepts got its start in environmental restoration projects before landing on the drying technology bottleneck that they’ve become known for remedying.
“He’s got models that build off of the coefficients that we get from the RDA and then the software can use those as guide maps,” he continues. “It’s kind of like a fuel map for an automotive engine, but it can use that information with appropriate sensors. So, we’ll put a moisture content sensor on the infeed and the outfeed. Then we
have airflow process sensors, so you can use process sensors to feed information into the software that can respond and react accordingly, both looking ahead and looking backward to match the two.
“We will typically keep the temperature relatively consistent because we design around 120 degrees Celsius air tempera-
ture, which is fairly low in comparison to a lot of ag material dryers,” Lanning says. “That helps prevent the blue haze that you get associated with wood drying. It helps keep your emissions lower, so you have less scrubbing to do on the other end. So, if we’re going to stay below an emissions point, then the other options we have are
Forest Concepts’ Advanced Drying Controls for belt dryers earned them the ASAE AE50 Award for Innovation in January.
SOURCE: FOREST CONCEPTS
bed depth and airflow, [and] 90% of the time we can get there by adjusting the airflow rather than the bed depth.”
When operating both the Crumbler Rotary Shear and the Advanced Drying Controls for belt dryers, Lanning says improvements can be seen across the board. A switch from a hammer mill to Crumbler rotary shears, for example, could save up to $52 million annually, according to an Idaho National Laboratory analysis. Energy and labor costs can also be saved using the technology. “If we’re conservatively saying we can reduce energy consumption by 30%, you could go up to a 60% operating cost reduction in terms of energy consumption,” Lanning says. “If all your unit operations talk together and are coordinated in an integrated fashion, you can start to remove some labor as well because the machines can respond to what’s happening elsewhere in the plant without an operator … running around to push buttons on the individual machines.”
Forest Concepts’ first installation, a small-scale Beltomatic Advanced Downdraft Conveyor Dryer built in partnership with Norris Thermal, boasts full control
over the mechanical, drying and cooling systems through a touchscreen interface on the dryer, processing up to 400 pounds of dried material per hour. The company’s first commercial-scale dryer system is 90% commissioned, Lanning says. Looking through the pipeline of upcoming projects, he notes one with Oakridge National Lab. “We’re improving the wear life of the cutters inside the rotary shear,” he says. “Then we’ve got several people we’re working with … at smaller distributed scale [refineries], either biochar or heat and energy distribution.”
Forest Concepts’ semi-customizable hardware platform allows for modular plugand-play additions for clients with existing technology in place. “We’ve found that every company we work with is different and needs almost a customized system to get where they need to go,” Perry says. “We built our first modular design preprocessing system that we placed at a biochar demonstration plant in Houston with a company called Locoal.”
Outside of its own technology, Forest Concepts provides research and development and consulting services. “We have a toll processing line, so if somebody is not
ready to buy equipment but they’re in their early-stage piloting, we can process at a pilot scale,” Lanning explains. “There’s one company that went through their entire year-long pilot process shipping material to us. Over that year, we processed 25 truckloads of material for them so they could do all their early runs.”
The key takeaway for Forest Concepts: plug and play. “Don’t just look at one individual unit operation,” Lanning adds. “Look at the system and ask, ‘Can I rearrange unit operations and optimize across the full system, rather than just a single operation?’
Turning municipal garbage into cellulosic biofuels, WāstAway Fuels is deploying a process known as cellular explosion.
BY KATIE SCHROEDER
As Earth’s population grows, the garbage associated with daily life increases, too. Cities around the world are seeking new, climate-sensitive solutions to deal with their municipal solid waste (MSW), and one Tennessee-based company is confident in its solution: a technology that allows residents to simply throw their trash in the garbage can—no need to Google which types of plastic go into what recycling bin—with assurance that it will become an energy source.
WāstAway’s multi-patented, greentech waste-to-fuel system accepts everything in the garbage bag, removes high-value recyclablesand converts the remainder—via its patented Cellulator technology—into solid biofuel, transforming 85% of household trash in about 30 minutes. Originating in Morrison, Tennessee, the company designed the process with the intent of making a soil additive
for the horticulture and greenhouse industry, which it did successfully, according to Vice President of Engineering David Palmer. However, WāstAway realized its Cellulate biomass substance would also work well as an energy feedstock.
Steve Napolitan, CEO of WāstAway, became fascinated by the concept of mitigating the trash problem and providing an alternative to fossil-based fuels such as coal. Since joining the company in 2025, Napolitan looks forward to the impact this technology could have in municipalities around the world.
WāstAway has operated the Morrison facility for more than 20 years, now using it as an R&D and demonstration facility, proving the technology to potential partners. Six projects are in the pipeline, with 12 others “in the wing,” Napolitan says. “In the next two years, we’re going to see a much larger scale from WāstAway, and then
in the next five years, we’re going to see more than half a dozen plants,” he adds.
Process Design
The WāstAway process begins with removal of glass, dirt, rocks, metals, some types of plastic, coins and the occasional tire, battery or scrap metal. “We are sorting for recyclables,” Napolitan explains. “We’re taking the plastics and the metals out so we can actually recycle those things. But we’re not maximizing for that; we’re maximizing [to recreate] that material into a use.”
The focus is to retain as much material as possible to turn into sustainable energy. Though some valuable recyclable materials are removed from the waste stream, Palmer emphasizes that the company is not a recycling center; it’s not the company’s focus. While dirt, glass and metals must be removed, plastics left in the waste stream increase the fuel’s Btu value.
An average bag of garbage contains around 70% cellulose, with the remaining quantity consisting of a combination of metals, plastics and moisture, Palmer explains. The cardboard, food, packaging and some plastics are all made of cellulose. “Right now, we’re taking out [codes] 1 through 4 in our recycling because they have a high
value,” he says. “So, if it’s more valuable as recyclables than it is the fuel, we take it out.”
The remaining garbage, now containing about 80% cellulose, then enters the Cellulator—a pressurized steam vessel that uses pressure to render the organic material into a biofuel. The pressurized chamber is heated to 350 degrees Fahrenheit, creating a cellular explosion that separates bound-together cells to produce a fluffy, homogenous material called Cellulate. The material looks similar to blown-in insulation or mulch and can be utilized as a feedstock for renewable natural gas (RNG) or turned into a solid biofuel, explains Todd Smith, spokesperson for WāstAway.
Removing the non-combustibles beforehand allows for consistent chemical composition in the Cellulate. Coming from a 40-year garbage processing background, Palmer couldn’t believe his eyes when he first encountered the technology. Typically, “garbage varies all over the place,” he explains. But the fuel from WāstAway’s process consistently comes in at 8,500 to 9,500 Btu, depending on moisture content. “When you go through the sorting, you start to understand that no matter what comes in the front door, what ends up at the Cellulator is almost always the same chemical composition. So that explains why it comes out so stable and is inert,” Palmer says.
The Cellulator converts garbage into cellulate (left image), which can also be pelletized.
IMAGE: WĀSTAWAY FUELS
By that, he means the material is nonreactive, and it remains inert in storage as well. He shares an example from a company that wanted to test its large-sized pellets that had not been produced in 10 years. However, the pellets burned in the counterflow gasifier without issue, having lost no Btu content because the material is not biologically active.
Although the sorting line was originally designed for making compost, the Cellulator still yields a reliable, energy-dense product. Palmer believes that the fuel’s quality could be further improved if the sorter were replaced with one designed with fuel in mind. “Once the people get their air [in the gasifier] set right for our particular fuel, they don’t touch it,” Palmer says. “It’s more consistent than coal in terms of Btu content, and it is an amazing product.”
Back before the company began focusing on applying its Cellulate as a fuel, WāstAway produced a beneficial soil amendment for the greenhouse and horticulture
TOTAL SYSTEMS INTEGRATION
Located in Morrison, Tennessee, WāstAway’s first facility serves as a research and development site and provides potential partners an opportunity to observe the company’s technology.
industries. At that time, the team referred to the product as “fluff,” using it as a soil additive. The U.S. Environmental Protection Agency attested to its consistency, as repeated tests showed nearly identical results, shares Palmer. “The rumor was that the people at the EPA said, ‘Fluff is fluff is fluff,’” he says.
Waste Challenge
Public opinion increasingly opposes landfills, and understandably so, Napolitan says. However, as landfills run out of room and the flow of garbage does not slow, city officials are searching for different—and better—solutions. The public
wants to divert as much waste from the landfill as possible, Napolitan adds, and some states have mandates in place requiring a certain diversion percentage. “We want more public education that this is an option—a viable option, and one that already works,” Napolitan says. “That’s what we’re working on. We’re working on identifying municipalities that want the change we see, and [to] divert their waste to our projects, and then we’ll get the funding and sell the energy.”
Recycling has been the main strategy for waste diversion out of the landfill, but municipalities have encountered limitations with this approach, including an inability
to recycle the intended amount of material or difficulty finding a market for it, which leads to some material ultimately ending up at the landfill anyway. The typical fuel yield from a recycling facility stands at 30% to 35% of the material entering the facility, but WāstAway keeps as much material for fuel as possible, utilizing 85% of the total incoming material as fuel and 98% of the organic material. Such high diversion rates of the raw solid waste are “unheard of in the industry,” Smith says.
Refuse-derived fuel (RDF) systems have been around for a while but have run into problems, limiting adoption. A few examples include challenges from the instability and inconsistent energy density of the fuel produced, and batch production, which limits MSW flow through the system. “We’re the only technology [that runs continuously],” Napolitan says. “So, from the time that trash is dumped on our tipping floor, in 30 minutes, it’s no longer actually registered as municipal solid waste. This al-
Steve Napolitan CEO, WāstAway Fuels
David Palmer Vice President of Engineering, WāstAway Fuels
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lows us exemptions and special permitting to go into other areas. We don’t have to be way out in a rural area because we don’t have the odor that trash has.”
Implementing Innovation
The Morrison facility has capacity to run at 2.5 tons per hour, but the process could be scaled for 10 to 50 tons per hour, as the facility’s off-the-shelf sorting equipment is rated for that volume. The modular design of the facility allows for adaptive scaling, Napolitan explains. This could be resolved by adding multiple production lines to match the volume of MSW. The technology in the new system can handle 200 to 800 tons per day “without any problem,” Palmer adds.
Developing a larger facility would mean installing multiple Cellulators and lines, because the size of the vessel can only change so much while maintaining the same functionality, similar to an anerobic digester. “The Cellulators are modular as well,” Palmer says. “It can only be so big to work. And so, we just do it with modules. [It’s] the same thing with the digesters that we run; [a] digester has a physical limitation to it—it can’t be too big, or it won’t work.”
The same concept applies if it’s sized too small, Napolitan and Palmer explain, due to the economies of scale present with the technology. Therefore, 10 tons per hour is likely the smallest feedstock capacity possible for process profitability. Overall, the modularity of the process and variety of fuels available make the technology quite customizable. “That’s what’s so good for these communities, because WāstAway has a technology that can be customized to meet the needs of the communities,” Smith says.
Planning for Economics
WāstAway offers its services to municipalities and builds, owns and operates the facilities. This structure keeps cities from needing to find the financing for what will be expensive projects, Napolitan explains. The company will partner with municipalities willing to commit their MSW stream and provide the land needed for the facility. In turn, WāstAway will bring the technology, the sale of the fuel and secure the funding required for construction.
Multiple revenue streams are crucial to developing this type of project, Napolitan explains. “We can actually get paid for taking the waste, because you would normally pay to put it in the landfill anyway. Then, we can get paid for the recyclables that we remove, and then we can get paid for multiple energies,” he says.
Renewable identification numbers (RINs) could provide an additional revenue stream. Palmer explains that, if turned into RNG, the company’s fuel qualifies for a
The above graphic outlines the process steps of WāstAway’s waste-to-renewable fuel technology.
IMAGE: WASTAWAY FUELS
D3 RIN—among the most valuable—categorized as either a cellulosic RNG or sorted MSW RNG. Typically, RNG made from separated organics only attains a D5 RIN, which is less valuable than a D3 RIN.
Fuel Demand
In a January 2026 press release, the U.S. Energy Information Administration noted that the month’s “Short Term Energy Outlook” projects U.S. energy demand will grow for the fourth consecutive year, the first time a four-year streak in demand has occurred since 2007. Increased energy production is needed, and cellulate shows potential to work as a feedstock for solid, liquid and gaseous fuel.
WāstAway’s Cellulate is well suited to substitute for coal-fired power plants, cement kilns and other industrial uses—and its RNG, produced through anaerobic digestion, yields high-quality pipeline ready fuel for a variety of energy uses. Cellulate has a high surface area and is hydrophobic, preventing the feedstock from gathering moisture in storage and making it a consistent, high-Btu biofuel, according to Palmer.
Based on his anerobic digestion expertise—serving as a co-author of the EPA’s manual on anerobic digesters—Palmer explains that the residual moisture content found in the Cellulate will remain when being fed to the digester. “The digester want[s] the moisture, so we don’t take it out,” he says. “But we leave the food waste and all of that in, so we get a good biodegradability out of it as well.”
The energy density of the material makes it a good fit for RNG producers who commonly run into limitations when siting a digester and finding appropriate feedstock availability, Napolitan explains. “We can run [municipal solid waste] through our Cellulator and actually give them more feedstock at a higher Btu,” he says. Alongside use in anerobic digestion, Cellulate could also be gasified within a Fischer-Tropsch process to produce cellulosic biofuel.
The range of energy production options helps WāstAway adapt to a variety of project environments. “If someone needs electricity, we can bring that in, and we can use [Cellulate] to create that or renewable natural gas. You have so many choices, which brings more flexibility and economics to the table so we can make more projects feasible,” he says.
The need for trash disposal is unlikely to disappear, but WāstAway’s technology offers a way to turn one of modern civilization’s biggest problems into a sustainable, innovative solution. Napolitan recognizes the transformative potential of WāstAway’s technology. “Waste, by definition, is something that is no longer useful to people, and [with it] we can make energy, which everyone needs right now,” he adds. “We’re always having an energy shortage … where are we getting our power source from? When we expand [energy production], we take what someone no longer wants and make something everyone wants. That gets me up every day.”
A recent OPIS webinar examined evolving biofuel policy and what it means for market dynamics, investment decisions and growth ahead.
BY KEITH LORIA
As 2026 unfolds, the renewable fuels sector is navigating a complex mix of policy developments, market signals and emerging demand opportunities across the biofuels landscape. With federal incentives, state clean fuel standards and infrastructure challenges continuing to influence development, industry leaders note that the central theme for the year ahead remains centered around demand.
In fact, that was a main topic of conversation during a recent OPIS webinar moderated by Evelyn Olson, low-carbon fuels policy analyst. The discussion brought together several influential voices from the Midwest biofuels sector, including Monte Shaw, executive director of the Iowa Renewable Fuels Association; Brian Werner, executive director of the Minnesota Bio-Fuels Association; and Dawn Caldwell, executive director of Renewable Fuels Nebraska.
The webinar began with a market overview from Jordan Godwin, director of renewables at OPIS, who outlined current price trends and production dynamics
shaping the biofuels market as the industry moves into 2026.
Throughout the discussion, the experts offered insight into key policy debates, including the Renewable Fuel Standard, E15 legislation, carbon capture infrastructure and emerging markets such as marine fuels and sustainable aviation fuel (SAF).
Market Signals Set the Stage
Godwin opened the discussion by outlining recent pricing trends across the biofuels complex, including ethanol, renewable diesel and associated compliance credits such as renewable identification numbers (RINs). He pointed to Chicago ethanol prices, which recently hovered around $1.60 per gallon, reflecting modest recovery after a seasonal dip when production had reached record levels in late 2025 and early 2026, thus temporarily pressuring prices.
One notable shift in the market, he noted, is the reversal of the traditional price relationship between ethanol and gasoline. Historically, ethanol traded at a discount,
encouraging blending. But in recent months, declining oil prices and shifting gasoline markets have occasionally put gasoline below ethanol on a price basis.
“That’s something ethanol producers really have to keep an eye on,” Godwin said.
Renewable diesel markets have also shown volatility. California data revealed a drop in renewable diesel blending volumes in late 2025, partly due to tighter spreads between petroleum diesel and renewable diesel when credit values are excluded.
Meanwhile, biodiesel economics remain heavily dependent on policy support following the expiration of the federal blenders tax credit in 2024.
The bright spot, according to the we-
Jordan Godwin OPIS
binar, has been the rebound in RIN credit prices, which recently reached a 29-month high. Rising RIN values create stronger incentives for refiners and blenders to incorporate biofuels under the federal RFS, leading to broader policy conversation.
Policy Clarity, Uncertainty Around 45Z
A majority of the webinar focused on federal policy developments, especially the 45Z Clean Fuel Production Tax Credit, which replaced earlier incentives such as the biodiesel blenders credit.
The IRS recently released draft guidance outlining how producers can qualify for the credit, a development the panelists
described as an important step toward policy clarity.
“I think our members and renewable fuel producers have been eager to get some policy certainty,” Werner said, adding that the industry had been waiting for detailed rules governing how producers capture the value of the credit.
Still, significant questions remain, particularly around how carbon intensity scores will be calculated and how feedstock production practices such as regenerative agriculture might impact eligibility. Shaw mentioned another element that drew attention in the draft regulations: the clarification that qualifying fuels must be suitable for transportation use but not necessarily used for transportation. That interpretation, he
said, could open new markets for biofuels, including marine applications and biodiesel blends used in heating oil.
The panelists also discussed unresolved questions about the role of renewable energy credits and electricity sourcing in lowering carbon intensity scores, factors that could influence ethanol plant participation in the program.
Carbon Capture
Another key theme of the webinar was the growing role of carbon capture and storage (CCS) infrastructure in the future of ethanol production. Shaw noted that CCS could play a critical role in helping biofuels meet ultra-low carbon requirements needed to access emerging markets
Monte Shaw Iowa Renewable Fuels Association
Brian Werner Minnesota Bio-Fuels Alliance
Dawn Caldwell Renewable Fuels Nebraska
such as sustainable aviation fuel and marine fuels. “If we want access to those markets, we have to deliver ultra-low carbon biofuels,” he said. “Large-scale carbon pipeline projects, especially those proposed in the Midwest, have generated both support and opposition. Some infrastructure projects across the country are encountering growing resistance, even in regions historically supportive of energy development.”
Despite those challenges, CCS represents one of the most promising avenues for expanding demand for agricultural commodities, Shaw argued.
What’s more, global markets for aviation and marine fuels could require hundreds of billions of gallons annually in coming decades, creating major opportunities for biofuel feedstocks. “We need demand solutions for agriculture,” Shaw said. “Persistently low crop prices could trigger a deeper farm crisis if new markets fail to emerge.”
Caldwell pointed to Nebraska as an example of CCS deployment in progress. “Some ethanol plants in the state have already begun compressing and transporting captured carbon dioxide through pipeline systems,” she said. “It’s a first major step underway.”
The Push for Year-Round E15
One of the most immediate policy priorities for the industry is achieving permanent nationwide approval for yearround E15 sales, the panelists said. For years, E15—gasoline blended with 15% ethanol—has required temporary federal waivers to allow summer sales because of outdated fuel volatility rules. Werner noted industry groups have worked for more than a decade to secure a permanent legislative fix. “We’ve had emergency waivers since 2019,” he noted. “At some point, Congress has to step in and fix this.”
While there have been signs of bipartisan support, industry leaders remain
cautious after previous legislative deals collapsed at the last minute. Shaw said a federal solution is the preferred outcome, but states could pursue their own approaches if Congress fails to act.
Midwestern governors have already explored state-level regulatory strategies that would effectively allow year-round E15 sales within their jurisdictions. California is also moving toward approving E15, though its complex regulatory system means implementation may still take several years.
Caldwell said expanding higher ethanol blends is essential not only for renewable fuel producers, but also for farmers who depend on strong corn demand. “Our farmers have gotten really good at growing a lot of corn,” she said. “We need to keep grinding that corn.”
New Markets
Beyond E15, the panelists highlighted emerging markets that could significantly expand demand for biofuels.
ENGINEERING POSSIBILITIES.
Not surprisingly, SAF remains a major focus. However, recent policy changes reduced the base SAF tax credit from $1.75 to $1 per gallon, a shift described as a step backward for ethanol-to-jet fuel development. Producing SAF from ethanol, often referred to as alcohol-to-jet, requires additional processing beyond conventional ethanol production, which raises costs. The webinar panelists noted that stacking multiple incentives—including federal tax credits, RFS credits and state programs—will be necessary to make SAF economically viable in the near term.
Werner noted that Minnesota has established its own SAF tax credit and is actively engaging airlines interested in low-carbon aviation fuels. “Those incentives are absolutely essential to making ethanol-to-jet work,” he said.
Another emerging opportunity lies in marine fuels, where global shipping companies are seeking lower-carbon alternatives to
traditional bunker fuel. Shipping currently relies on some of the dirtiest and cheapest fuels in the energy system, meaning policy signals such as potential regulations from the International Maritime Organization will likely determine how quickly cleaner fuels gain market share.
Still, ethanol has advantages as a marine fuel candidate, including global availability at major port terminals. “Ethanol is already traded worldwide,” Shaw said. “The supply network is there.”
Driving the Industry Forward
As the webinar concluded, Olson asked each panelist to summarize the most important action the industry should pursue in 2026, and their responses were strikingly similar.
Shaw called for policies that expand demand, including E15, marine fuel adoption and carbon capture infrastructure.
Werner used a single word—“hungry”—to describe the industry’s outlook. “Hunger for demand, hunger for new markets, hunger for year-round E15,” he said.
Caldwell agreed, describing the industry as “driven” to capitalize on emerging opportunities. “There’s so much that feels like it’s right on the horizon,” she said.
For the biofuels sector, that horizon includes new markets, new technologies and evolving policy frameworks. But as the panel made clear, the industry’s success in 2026 will depend largely on expanding demand for low-carbon fuels.
Author:
Keith Loria Contributing Writer, Biomass Magazine
New Mexico Clean Transportation Fuel Program: New Market Opportunity for Biofuels
BY GRAHAM NOYES
On Jan. 22, the New Mexico Environmental Improvement Board unanimously approved a slightly revised version of the Clean Transportation Fuel Program regulations proposed by the New Mexico Environment Department. The newly approved program mandates the fastest carbon intensity reduction in the U.S.: 20% by 2030, starting in April. New Mexico is the first state outside of the Pacific Coast Collaborative to adopt a clean fuels program, and the first major oiland gas-producing state to adopt a program.
During the proceedings, New Mexico set a new gold standard for both stakeholder engagement and maximal integration of stakeholder recommendations. The state’s rulemaking process is extraordinary in that stakeholders are allowed to participate as active parties in the rulemaking. The New Mexico Environment Department was the petitioner with the burden to make the case to the board that the proposed regulations should be approved. Parties in this type of New Mexico rulemaking have the right to
give opening and closing arguments, present witnesses, cross-examine the petitioner’s and other parties’ witnesses, present rebuttal testimony and file motions.
The rulemaking proceeded in distinct phases. It was initiated when the Environment Department filed a petition and the first version of the proposed regulations. Parties could then file notices of appearance, notices of intent to testify and submit written testimony. Hearing Officer Felicia Orth then adeptly presided over a two-week session of contentious but cordial case-in-chief direct testimony and cross-examinations that were primarily conducted in person in Santa Fe, but with some witnesses, parties and attorneys participating remotely. The first nine days of hearings began in September and ended in October. Following a break for rebuttal testimony and motions, Hearing Officer Orth convened a one-week session of rebuttal testimony and cross-examinations in November. Closing arguments and legal briefs were due in late December. In January, the board held three days of deliberations
that examined every aspect of the program, and ultimately the board approved the final version of the proposed regulations with only minor revisions.
Parties in the rulemaking included New Mexico Oil & Gas Association, the Coalition for Clean Affordable Energy, Oxy USA, HF Sinclair, American Fuel & Petrochemical Manufacturers, RNG Coalition, Food & Water Watch, Southwest Airlines, Low Carbon Fuels Coalition, Growth Energy, Rio Valley Biofuels and several individuals appearing pro se. Along with experienced New Mexico co-counsel Anne Minard, I had the privilege of representing Infinium Operations LLC, Verde Clean Fuels Inc. and the SAF Producer Group, which includes Gevo, NEXT Renewable Fuels Inc. and World Energy LLC.
Subsequent to the filing of the petition and at multiple junctures in the rulemaking, the Environment Department made revisions to the proposed regulations based on the testimony, evidence and arguments that had been presented. After a robust public process and many months of pre-hearing
CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
(From left) New Mexico Clean Transportation Fuel Program Bill sponsors Rep. Kristina Ortez. and Senate President Pro Tempore Mimi Stewart; New Mexico Gov. Michelle Lujan Grisham; Low Carbon Fuels Coalition Executive Director Robin Vercruse and Chair Lindsay Fitzgerald.
meetings with stakeholders and the hearings before the board, the Environment Department crafted a groundbreaking southwestern clean fuel program with many unique components.
On the final day of the rebuttal proceedings, NMED Climate Branch Chief Claudia Borchert was asked whether, after a week of rebuttal and cross-examination, she still had confidence in the final version of the regulations that she and the NMED rulemaking team had developed. Borchert said she was confident, citing her team as the primary reason: “I have a stellar team, and I think we really complement each other” (Tr. Vol. XIII, 4387:15-4388:1). She went on to state: “We’ve had, between the four years of trying to get it passed in the Legislature, and the 18-plus months of actually digging down and trying to understand it and all the conversations that have happened, it just means that the product, 113, NMED Exhibit 113, the rebuttal rule, has just gone through the ringer so many times that I do feel confident in it” (Tr. Vol. XIII, 4389:3-12).
The rule approved by the board includes multiple favorable provisions that expand the borders for clean fuel production, including:
• Book-and-claim provisions for renewable electricity and renewable natural gas that will enable clean fuel producers to achieve lower carbon intensity through the acquisition of low-CI process energy and heat
• A broad synthetic fuel definition and opportunities for synthetic fuels to opt in to the program
• Recognition of avoided methane emissions in pathway scores
• Favorable sustainable aviation fuel crediting based on a fixed carbon intensity (CI) benchmark score for alternative jet fuel that will enable 10 CI points more credit than diesel in 2030 and 20 CI points more in 2040, along with fueling supply equipment crediting for AJF
Unfortunately for the biomass power industry, the New Mexico CTFP regulations define “renewable electricity” to include only electricity generated by solar, wind, hydropower or geothermal generation. Under Section 206(E) of the regulations, qualifying renewable electricity sources have a zero carbon intensity score. Offsite renewable electricity sourcing can be done via the purchase
of renewable energy certificates, typically referred to as RECs, that represent the carbon intensity of the power. In other clean fuel programs, this type of power sourcing is generally restricted to electricity used to charge electric vehicles. The New Mexico CTFP is the first clean fuel program to expand this power sourcing via RECs to liquid fuel production facilities that produce ethanol, biodiesel, renewable diesel or other qualifying low-carbon fuels.
As a strong supporter of clean fuel programs, it has been a privilege to participate in the establishment and development of the New Mexico CTFP. To my knowledge, the very first stakeholder to advance the concept of a clean fuel program for New Mexico was Virginia Smith of Adelante Consulting. Adelante had done analysis for a county in New Mexico to identify a policy that would create a market for the woody biomass generated by wildfire risk reduction treatments. Based on that analysis, Adelante determined that a clean fuel program would be the most
advantageous policy structure to create market demand for biomass. Smith reached out to the Low Carbon Fuels Coalition in 2020 to request our help in getting a bill introduced. I am proud to report that the LCFC rose to that challenge and worked for five years to support its passage, with success finally being achieved by Executive Director Robin Vercruse and Chair Lindsay Fitzgerald in 2024.
The program’s adoption marks a significant expansion of clean fuel policy beyond coastal markets, and underscores the growing role of interior states in shaping the future of low-carbon fuel development
Author: Graham Noyes Managing Attorney, Noyes Law Corp.
CANADA’S CLEAN FUELS MARKET
What 2025 Clarified and What 2026 Will Test
Canada’s clean fuel policies are taking shape, but 2026 will test their cross-border implications for U.S. producers.
BY SALLY TAYLOR
For U.S. clean fuel producers looking north, 2025 brought much-needed clarity to Canada’s policy landscape, and 2026 will test how investable that clarity really is.
Over the past year, Canadian federal policymakers made a series of targeted adjustments that directly affect cross-border market participants: refining guidance under the Clean Fuel Regulations, proposing focused amendments to address domestic competitiveness, reworking carbon pric-
ing at the consumer level, and introducing time-limited incentives to stabilize Canadian production. Together, these moves reshaped not only the regulatory framework, but also how U.S. producers evaluate risk, return and strategic fit in the Canadian market.
In 2026, the question for U.S. producers is no longer whether Canada is committed to clean fuels; that commitment is clear. The question is how predictable, durable and navigable will the system be for com-
panies accustomed to a very different U.S. policy environment, and how valuable will the market be?
2025: Reducing Friction, Not Raising Ambition
One of the most critical and often overlooked themes of 2025 was the Canadian government’s effort to reduce friction within the existing policy framework, rather than dramatically expand it. Updated CFR guidance clarified credit creation, verification expectations and reporting mechanics. For many regulated parties, this did not change core compliance obligations, but it did improve confidence where uncertainty had previously slowed investment or delayed market entry. Greater clarity allowed companies to move forward or, just as importantly, reassess projects that no longer aligned with the more straightforward rules.
For U.S. producers, this distinction matters. The Canadian market is often evaluated through a U.S. lens that prioritizes the magnitude of incentives. In 2025, Canada signaled that regulatory certainty and consistency would be the primary value proposition.
The introduction of a new electric vehicle crediting pathway within the CFR fuel life cycle analysis model further reinforced this approach. Rather than positioning electrification as a replacement for liquid and gaseous fuels, Canada is treating transportation decarbonization as a portfolio challenge. For producers exporting renewable fuels into Canada, this signals coexistence.
Sending a Signal Without Rewriting the System
The Canadian federal government’s decision to pursue targeted CFR amendments rather than a wholesale rewrite is instructive, particularly for foreign producers assessing long-term exposure. Rather than
CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
reopening the entire regulatory structure, policymakers focused on specific pressure points: domestic competitiveness, supply resilience and insulation from international policy volatility.
Proposals such as domestic content considerations and potential credit multipliers were framed less as protectionist measures and more as stabilization tools designed to preserve Canadian production capacity.
For U.S. RNG developers and other clean fuel producers, this approach introduces both opportunity and complexity. It creates optionality for projects aligned with Canadian priorities, while also underscoring the importance of understanding policy intent, not just regulatory language. The Canadian system rewards alignment and durability over short-term arbitrage.
Reflecting Global Realities, Not a Philosophy Shift
The announcement of a time-limited biofuel production incentive, supporting Canadian biodiesel and renewable diesel producers through 2026 and 2027, represented the clearest acknowledgment of global market dynamics. This incentive isn’t meant to fundamentally change the Canadian market or replicate the U.S.-style subsidies forever. Instead, it recognizes that Canada’s clean fuels industry is part of a closely linked North American system, where shifts in U.S. federal incentives can swiftly impact the competitive landscape.
For U.S. producers evaluating exports or partnerships in Canada, the message is nuanced: incentives may appear smaller or more targeted, but they are deployed strategically. The incentive functions as a bridge, not a destination, thus buying time for domestic supply while preserving longterm regulatory integrity.
Carbon Pricing Rebalanced, Not Abandoned
The removal of the consumer carbon tax in 2025 drew significant attention, particularly from outside Canada. Its implications for clean fuels, however, are often misunderstood. While consumer-facing carbon pricing was eliminated, industrial carbon pricing through the Output-Based Pricing System remained intact. For clean fuel producers and compliance entities, this distinction is critical. The OBPS continues to anchor carbon value within the industrial economy, preserving a meaningful price signal for emissions reductions without placing direct costs on households.
For U.S. producers accustomed to more volatile or incentive-driven carbon
markets, this represents a different kind of stability—one grounded in industrial compliance rather than consumer behavior.
What 2026 Will Test
As Canada enters 2026, its clean fuels framework moves into a new phase. The rules are largely in place. Guidance has improved. Amendments are under consideration. Incentives are defined, if temporary. The year ahead will test execution, integration and strategic discipline, particularly for companies operating across borders.
Author: Sally Taylor Director of Strategic Development, EcoEngineers
2026 Outlook for Maritime Biofuels
BY BRITTANY M. PEMBERTON, SHAILESH SAHAY AND LAUREN E. DAVIDSON
Maritime shipping is the backbone of global commerce, with more than 80% of the world’s goods transported by sea. Maritime shippers operating in both inland and international waters rely heavily on fuel oil, consuming about 5% of the world’s annual oil supply. However, under growing regulatory pressure to achieve net-zero emissions by 2050, the industry has turned to biofuels to reduce emissions.
Maritime biofuels represent a rapidly evolving sector that challenges regulators to establish cohesive rules across international, national and local jurisdictions. These regulatory complexities, combined with rising demand, make it essential for both consumers and producers to anticipate market shifts driven by policy changes. The following analysis highlights key developments expected in 2026 and explores how industry stakeholders can better position themselves to capitalize on the expanding biofuel market.
Global Maritime Policy Shifts
Representatives from the IMO’s 176 member states, including the United States, met in London last October to vote on a new emissions tax, tradable permit system, and fuel standard for the
maritime shipping industry. The vote, held at the Extraordinary Marine Environment Protection Committee meeting, would have amended Annex VI of the MARPOL Convention. The vote was considered a formality after the IMO announced a 2050 net-zero emissions goal (Net-Zero Framework) last April, but was delayed to October 2026 after the U.S. voiced extreme opposition to the measure. The Net-Zero Framework, if ratified, would target implementation for 2028, although it is unclear whether the U.S. would continue to participate in the IMO if implemented.
If adopted, this Net-Zero Framework would require ships in the IMO’s 176 maritime jurisdictions to reduce their greenhouse gas fuel intensity (GFI) or else purchase credits to cover the excess emissions. Biofuels, like those made from soybean oil or waste cooking oil, have less GFI than traditional heavy oil fuel, meaning the policy would likely increase the demand for alternative fuels to reduce the need to purchase fuel credits. In addition to considering how supply chains may be impacted by the shifted demand, those operating ships in international waters should also start considering how they will implement a compliance strategy to conform with the upcoming regulations.
Shailesh Sahay Partner, Bracewell
Brittany Pemberton Partner, Bracewell
The European Union also recently implemented its FuelEU maritime program last January. The program requires ships trading within the EU or European Economic Area to reduce greenhouse gas intensity using renewable or low-carbon fuels. The regulation will require ships to use on-shore power or alternative zero-emission technology from January 2030 onward at European ports. FuelEU also sets maximum limits for the yearly average GFG intensity used by ships above 5,000 gross tonnage at European ports. The carbon intensity requirement applies to all energy used on voyages within the EU or EEA and to only half of the energy used on voyages into or out of the EU or EEA. However, the FuelEU maritime regulation bars the use of crop-based biofuels from eligibility in European markets, creating a market impediment for many U.S. biofuels. In contrast, fuel producers who use noncrop feedstocks like waste fats and grease may see an increase in demand under the EU framework.
U.S. Maritime Policy Developments
While still in a nascent stage, legislation has been introduced to expand federal incentives for maritime biofuel. Specifically, in midMarch of last year, a bipartisan and bicameral group of legislators introduced the Renewable Fuel for Ocean Going Vessels Act, which would amend the Clean Air Act to add “fuel for ocean-going vessels” to the definition of renewable fuel eligible for Renewable Fuel Standard credits. The RFS program under the CAA requires a certain volume of renewable fuel be used to replace the quantity of fossil fuel used in “transportation fuel, home heating oil or jet oil.” Under existing rules, biofuel producers must retire RFS credits if their product is used in ocean-going vessels. This bill would expand the existing market for maritime biofuel by designating such fuel as an
“additional renewable fuel” eligible for credit under the RFS. Under the proposed framework, no entity would be required to use biofuel in maritime fuel, but such use would generate opt-in credits that could be purchased by obligated parties to meet RFS requirements.
Port-Level Biofuel Initiatives
Local ports are also developing their own biofuel goals. Nearly 53 ports have developed climate and air quality plans that set stricter goals than international or national regulations. The plans, like those in Seattle and Detroit, may impose fuel standard goals that increase the proportion of sustainable maritime fuel shippers may be expected to use in port. For example, the Port of Detroit Decarbonization and Air Quality Improvement Plan cites the Port of Detroit’s goal to have half of all large vessels visiting its port using biofuel by 2027. The Port of Detroit aims to sell enough biofuel to meet 100% of its customers’ biofuel demand by 2040. Seattle also recently passed a joint clean air strategy that targets the gradual phasing out of highintensity fuels. Across the ocean, the Port Authority of Guam adopted a zero-emission target, and its recently released 2026 Look Ahead framework notes that energy resilience and continuing to meet its zero-emissions target is a priority. Many of these emission reduction strategies are more ambitious than the IMO’s Net-Zero Framework.
Overall, industry stakeholders should be aware that as local ports continue to develop green initiatives, updated fuel standards impact both the local demand for sustainable maritime fuel and the regulatory requirements placed on shippers.
In conclusion, commercial awareness of the changing regulatory framework governing maritime biofuel use will be paramount in 2026 as international, domestic and local regulators set sail toward fewer carbon emissions
Authors: Brittany M. Pemberton, Partner, Bracewell
Shailesh Sahay, Partner, Bracewell
Lauren E. Davidson, Associate, Bracewell
Lauren Davidson Associate, Bracewell
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