Switched On Biofuels Cash In on US Tax Credits: Analyst Reaction
Mar 6, 2026
Jade Patterson, a BNEF renewable fuels analyst, explains how new 45Z guidance boosts manure-based renewable natural gas with negative emissions scoring. He describes why dairy and swine projects gain big credits, how RNG is produced and valued, and where that fuel is likely to be sold. The conversation also covers alternative markets for displaced RNG and the uncertainty after the credit expires in 2029.
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Negative Emissions Give Manure RNG A Big Credit Edge
- Treasury's 45Z guidance allows manure-based renewable natural gas to receive negative carbon intensity scores and much higher credits.
- Manure projects can show methane avoidance, producing CI scores as low as -300 to -600 gCO2/MJ, boosting credit value significantly.
How Dairy Manure Turns Into Negative CI RNG
- Renewable natural gas (RNG) captures methane from decomposing organic matter and removes CO2 to substitute pipeline natural gas.
- For dairy manure RNG, avoided methane emissions create the negative CI that makes these projects extremely low lifecycle emissions.
Negative CI Multiplies The 45Z Credit Value
- The 45Z credit is computed from a base rate multiplied by an emissions factor tied to percent emissions reduction.
- With negative CI, the emissions factor can exceed one, turning a $1 base into roughly $7/gal for high-negative CI manure RNG.