As recently as mid-summer 2019, California and Canada signed a memorandum to collaborate on future clean vehicle and fuel standards. The shift to green fuels and vehicles is accelerating.

Source: Alternative Fuels Data Center
Graphic: Graph depicting the number of fueling stations for alternative fuels.


As recently as mid-summer 2019, California and Canada signed a memorandum to collaborate on future clean vehicle and fuel standards. The shift to green fuels and vehicles is accelerating.

Canada aims to cut emissions in 2030 by 30 million tons, and California has already displaced 3.3 billion gallons of petroleum-based fuels with low-carbon alternatives. Beyond the positive impact cleaner fuels has on our environment, policies encouraging their use significantly impact our economy.

While emissions reductions targets and lower petroleum consumption may be off-putting to some, others are cashing in on the lucrative incentives for using renewable natural gas (RNG) and other alternative fuels offered through Canada’s Clean Fuel Standard (CFS), California’s Low Carbon Fuel Standard (LCFS), and other states’ Alternative Fuel Standards (AFS).

How CFS, LCFS, and AFS Affect You

Standards directly impact a company’s bottom line.

To encourage fuel consumers and producers to meet mandated requirements, the United States implemented the Renewable Identification Number (RIN) system. RINs carry extra value which is paid for along the way, thus subsidizing extra production and compliance costs.

RINs are broken down into four category types:

  • D3 Cellulosic Biofuel: D3 RINs are created when ethanol is blended into gasoline. That ethanol must be made from cellulosic material, e.g. wood chips, corn stover, etc.
  • D4 Biomass-based Diesel: D4 RINs are created by blending oils sourced from soybean, canola, and wastes or animal fats, into diesel.
  • D5 Advanced Biofuel: D5 RINs are created when sugar-cane based ethanol, biobutanol, or bio-naphtha is blended into gasoline.
  • D6 Renewable Fuel: D6 RINs are created when corn-based ethanol is blended into gasoline.

RINs are created by renewable fuel producers. They are then sold with the renewable fuel to a refiner or importer. Only at that point may the RIN be bought or sold by an independent party. The RIN’s final transaction comes in the form of retirement towards meeting an entity’s renewable volume obligation.

Stay informed of the latest opportunities created by LCFS policy change through our e-newsletter here.

State Policy: Low Carbon Fuel Standard & Alternative Fuel Standard

Because the industry is heavily influenced by policy, it’s critical to stay abreast of policy shifts and developments. Below are the latest updates from across the United States, followed by an analysis of how this impacts renewable natural gas markets.

Low Carbon Fuel Standard

  • California: The Low Carbon Fuel Standard began taking shape in California more than a decade ago.

Since 2011, a patchwork of standards has formed together from an assembly bill, a governor’s executive order, and regulations from California’s Air Resources Board. The resulting LCFS required companies in California to comply with carbon intensity reduction targets, and over the last several years, California Congress has continued to revise its target. As recently as a 2018 mandate, the reduction in carbon intensity of fuels has been increased to 10% by 2020, and 20% by 2030.

Some states have modelled their targets to reflect the modified California LCFS, while others have developed their own alternative fuel standard.

Alternative Fuel Standards and Low Carbon Fuel Standards

  • Oregon: Oregon enacted its own alternative fuel standard as early as 2007. Oregon’s HB 2210 required all gasoline sold in the state to contain at least 10% ethanol. Diesel fuel was further required to contain at least 5% biodiesel.

In 2009, Oregon’s legislature authorized the Oregon Environmental Quality Commission to implement a low carbon fuel standard that would reduce the average carbon intensity of transportation fuels used in Oregon by 10 percent over a 10-year period.

  • Washington: In 2006, Washington’s ESSB 6508 required that at least 2% of gasoline sold in the state be denatured ethanol. Furthermore, the state requires biodiesel make up at least 2% of total diesel sales.
  • Louisiana: Louisiana’s 2006 Act 313 contains two requirements for ground transportation vehicles. Denatured ethanol produced from agricultural products or other biomass must make up 2% of total gasoline sales in the state. The same requirement is in place for biodiesel with respect to diesel. Those requirements will increase alongside in-state production capacity, with a cap set at 20%.
  • Minnesota: At least 10% of all gasoline sold in Minnesota must be corn-based ethanol and other biofuels,  according to Minnesota’s HF 976. Diesel must also contain biodiesels, with the percentage varying by season: 5% in the winter months; 10% in the spring; 20% in the summer.
  • Missouri: Missouri’s 2008 Renewable Fuel Standard Act mandates that all gasoline must contain at least 10% ethanol.

Pennsylvania: When Pennsylvania passed its Biofuel Development and In-State Production Incentive Act in 2008, it also required that gasoline contain at least 10% cellulosic ethanol. The act contains a unique provision that the requirement is only effective after in-state production of cellulosic ethanol tops 350 million gallons for at least three consecutive months.

Xebec’s ongoing delivery of an agri-food waste project in Sicily, Italy

Lastly, Xebec’s Canadian operations in Québec currently remain unaffected and we are operating close to capacity. Our schedule for North American deliveries remains the same and no impact has so far been experienced due to the coronavirus. We are working on a multitude of shipments for the North American market as evidenced by recent contract announcements.

Xebec is well-positioned to work through these disruptions with its strong balance sheet that includes more than $20 million of cash on hand and approximately $18 million in outstanding warrants, exercisable at $1.05 and $1.85 over the next 4 months. In addition, our quote log continues to increase and now exceeds $937.0 million (as of March 13th, 2020) and our order backlog stands at $95.1 million (as of January 28th, 2020).

The company continues to follow the current developments and will provide further communications should the effect on operations change materially.


“COVID-19’s spread has left both a human and economic toll in its wake. Xebec’s first priority is to ensure the health and safety of its employees, customers, and partners. We continue to watch the situation closely as we execute our rapid scale up.

We have been dealing with the novel coronavirus since its first outbreak in China 12 weeks ago. This has led Xebec to prepare for a similar situation in North America and we are in the fortunate situation to have all necessary protocols in place to continue operating in this challenging environment. Over the last 10 weeks, we have increased our inventory and work in progress levels to withstand certain supply chain disruptions and continue our Blainville operations to the best possible extent. The steps we have taken to protect our stakeholders include travel restrictions, a significant reduction of in-person meetings as we have started to utilize remote working solutions such as telephone and video conferencing and instant messaging applications. We have also provided a number of our employees with laptops to allow working from home.

Last week Xebec has implemented a COVID-19 Protocol for all its North American employees and suppliers, which includes actions for a clean and disinfected work environment, travel and self-quarantine guidelines and remote working instructions. I believe we have taken reasonable steps to protect not only our employees, suppliers and customers but also safeguard to the best possible extent our ability to deliver financial results that will protect the expectations of our shareholders.”
Kurt Sorschak, President and CEO, Xebec Adsorption Inc.

Related links:

For more information:
Xebec Adsorption Inc.
Brandon Chow, Investor Relations Manager
[email protected]
+1 450.979.8700 ext 5762

About Xebec Adsorption Inc.

Xebec is a global provider of gas generation, purification and filtration solutions for the industrial, energy and renewables marketplace. Well-positioned in the energy transition space with proprietary technologies that transform raw gases into clean sources of renewable energy, Xebec’s 1500+ customers range from small to multi-national corporations, governments and municipalities looking to reduce their carbon footprints. Headquartered in Montréal, Quebec, Canada, Xebec has several Sales and Support offices in North America and Europe, as well as two manufacturing facilities in Montréal and Shanghai. Xebec trades on the TSX Venture Exchange under the symbol XBC. For more information,

Cautionary Statement

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release contains forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements, and subject to risks and uncertainties. Generally, forward-looking statements can be identified by the use of terminology such as “plans”, “seeks”, “expects”, “estimates”, “intends”, “anticipates”, “believes”, “could”, “might”, “likely” or variations of such words, or statements that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “will be taken”, “occur”, “be achieved” or other similar expressions. Forward-looking statements, including statements concerning future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness, financial condition, losses and future prospects as well as the expectations of management of Xebec with respect to information regarding the business and the expansion and growth of Xebec operations, involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are subject to business and economic factors and uncertainties, and other factors that could cause actual results to differ materially from these forward-looking statements, including the relevant assumptions and risks factors set out in Xebec’s public documents, including in the most recent annual management discussion and analysis and annual information form, filed on SEDAR at Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the uncertain and unpredictable condition of global economy, Xebec’s capacity to generate revenue growth, limited number of customers, and other factors. Although Xebec believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, Xebec disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.