Compliance frameworks expand, federal uncertainty grows — February 2026
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Recent developments confirm a theme of steady but uneven progress across the markets our clients operate in. In Europe, the Commission advanced work on the biomethane tripartite agreement and adopted initial certification methodologies under the Carbon Removal Certification Framework — incremental steps, but ones with direct implications for the EU ETS review scheduled for July 2026. In the US, Treasury's proposed guidance on the 45Z Clean Fuel Production Tax Credit is broadly constructive and reinforces cross-selling opportunities across EACs and SAF, though it introduces some pricing uncertainty for HEFA-based pathways. The EPA's withdrawal of its endangerment finding is the most significant federal rollback to date. It does not threaten state-level programs, but it raises the bar for any future federal climate legislation. Read on to discover what these policy developments mean for you.
Published on 26th February 2026.
EUROPE
EU Commission biomethane tripartite agreement signals stronger market framework
What happened
The European Commission published a new Tripartite Agreement on Biogas as part of its broader initiative to accelerate cost-effective decarbonization across the EU. The agreement commits the Commission to creating an enabling framework for biogas production and end-use markets, covering cross-border trade, internal processes for Member States, and strengthened supervision of voluntary sustainability compliance schemes.
What it means for your business
Companies sourcing biomethane certificates across EU markets stand to benefit from cleaner cross-border trading frameworks and reduced administrative friction at the Member State level. For producers, the commitment to enhanced oversight of voluntary schemes raises the bar on sustainability compliance documentation — particularly for certificates traded across the AIB hub. The agreement is a structural positive for biomethane certificate demand, though its near-term market impact depends on Member State implementation pace.
Entry into force
EU. Expected 2027.
Further reading
ERGaR / EBA consultation materials via the European Commission's energy transition initiative.
EU Carbon Removal Certification Framework: first methodologies adopted for DACCS, BioCCS, and biochar
What happened
The European Commission adopted an initial set of methodologies under the EU Carbon Removals and Carbon Farming (CRCF) Regulation, covering direct air capture with carbon storage (DACCS), biogenic emissions capture with carbon storage (BioCCS), and biochar carbon removal (BCR). These are the first voluntary certification methodologies for permanent carbon removals under the CRCF framework.
What it means for your business
The timing is significant: the Commission plans to assess how BioCCS and DACCS removals can be integrated into the EU ETS as part of its July 2026 review. Companies with Scope 1 emissions obligations under the ETS, and those building carbon removal procurement strategies, should treat this as the start of a policy window, not a concluded framework. The methodologies establish the certification architecture; the July ETS review will determine whether removal credits acquire compliance value.
Entry into force
EU. Methodologies confirmed February 2026.
ETS integration review: July 2026.
Further reading
EU post-2030 climate framework consultation: market-based mechanisms under scrutiny
What happened
The European Commission launched two public consultations on the shape of its post-2030 climate policy framework. The first covers national climate targets, effort-sharing among Member States, and flexibility mechanisms. The second addresses the potential use of international carbon credits, up to 5% of the 2040 target, equivalent to approximately 235 MtCO2, to meet the provisional 90% emissions reduction goal by 2040. Quality criteria, country of origin, and financing conditions are all under review.
What it means for your business
These consultations, read alongside the ETS review scheduled for July 2026, define the policy options the EU is actively weighing for the 2030-2040 period. The backdrop matters: political rhetoric in Brussels has shifted to emphasize competitiveness alongside climate ambition, creating pressure on the ambition of final framework decisions. On international credits, signals from Commission officials suggest quality criteria could be set above current Article 6.4 standards, and that the EU may consider a unilateral program to finance carbon projects abroad rather than working through existing multilateral mechanisms. If that option gains traction, it would pose material risks for private sector project developers and credit buyers operating in Article 6 markets. ACT is engaging closely with IETA and industry stakeholders to ensure market-based mechanisms are reflected in the final framework.
Entry into force
EU. Consultation concluded; policy design process ongoing.
Target framework: 2030 and beyond.
Further reading
France publishes 2035 biofuel and biomethane production targets
What happened
The French government published new biofuel and biomethane production targets as part of its energy roadmap for 2026-2035. The targets set a biomethane production goal of 47-82 TWh by 2035, up from 9 TWh, and a biofuels output target of 70-90 TWh, up from 38 TWh in 2023.
What it means for your business
France is the EU's largest installed biomethane capacity market as of early 2025, having recently overtaken Germany at 190,711 cbm/hour. It is a key sourcing country for certificates tradeable via the AIB hub. These targets reinforce medium-term supply growth expectations for French biomethane, supporting certificate sourcing strategies for companies with European renewable gas procurement obligations. The scale of the ambition also creates investment signals for producers planning capacity through to 2035.
Entry into force
France. Targets apply to 2026-2035 planning period.
Further reading
French Ministry of Energy roadmap 2026-2035 (biofuels and biomethane chapter).
UNIATED STATES
45Z Clean Fuel Production Tax Credit: proposed regulations published — constructive for RECs, mixed for SAF
What happened
The US Treasury and IRS published proposed regulations for the 45Z Clean Fuel Production Tax Credit. The credit is calculated based on a fuel producer's carbon intensity (CI). Producers can use Renewable Energy Credits to reduce their CI score and increase their tax credit valuation, subject to strict eligibility criteria. The proposed rules reaffirm previously signaled guidance and allow reliance on the proposed regulations until final rules are published.
For SAF specifically, the proposed rules remove the previously higher base rate that applied to sustainable aviation fuel. SAF producers can access the full credit value by achieving ultra-low CI, but HEFA-based pathways will see materially lower average per-gallon credit values under the new framework compared with prior policy signals. Stricter North American feedstock sourcing requirements apply after 2025 (US, Canada, and Mexico only). The credit runs through December 31, 2029.
What it means for your business
For REC buyers and sellers: the 45Z guidance confirms the cross-sell opportunity between US renewable energy certificates and clean fuels. ACT's US RECs and US Fuels desks are positioned to advise on which regions and COD vintages carry the most upside as additional guidance is issued. For SAF credit market participants: the removal of SAF's preferential base rate introduces pricing pressure on HEFA pathways and adds supply chain complexity from North American sourcing rules. Near-term SAF credit market activity is not significantly affected. Legacy higher rates still apply through 2025, but post-2025 economics have changed.
Entry into force
US. Credit period: December 31, 2024 to December 31, 2029.
Proposed regulations effective now; final regulations pending.
Further reading
Colorado and Illinois advance clean energy requirements for large data centers
What happened
Two US states have moved to require large data centers to meet clean energy procurement obligations.
In Colorado, new legislation requires data centers with peak loads above 30 MW, or multiple facilities collectively above 60 MW, to meet 100% of their annual electricity consumption with renewable resources from January 1, 2031. By June 30, 2030, the Colorado Public Utilities Commission must assess whether 100% hourly matching is technically and economically feasible; if it is, hourly matching will be required. RECs must be new and incremental.
In Illinois, a House proposal would require data centers to procure or self-generate Energy Attribute Certificates equal to increasing percentages of their Illinois electricity consumption from 2027, with hourly clean energy matching required from 2030. Illinois has over 240 data centers.
What it means for your business
Both measures create demand signals for data center operators to engage with EAC markets, and more specifically with 24/7 clean energy products as hourly matching requirements come into effect. Companies with data center operations or supply chain exposure in Colorado and Illinois should assess their current REC procurement strategy against the incoming obligation timelines. The Illinois bill is still in proposal stage; the Colorado legislation is more advanced.
Entry into force
Colorado: 2031 (100% annual), with 2030 feasibility assessment for hourly matching.
Illinois: 2027 (EAC obligation begins), 2030 (hourly matching).
Further reading
ASIA-PACIFIC
India approves national guidelines for biomethane injection into gas grids
What happened
India's Petroleum and Natural Gas Regulatory Board (PNGRB) approved National Guidelines for injecting biomethane and bio-compressed natural gas (BioCNG) into natural gas grids on February 11, 2026. The guidelines provide a standardized framework for project developers and grid operators covering technical specifications, commercial arrangements, and regulatory approvals.
What it means for your business
India currently has approximately 133 biomethane plants in operation, the majority operating off-grid as physical BioCNG supply. The PNGRB guidelines signal a regulatory shift toward grid-connected injection, which is a precondition for a mass-balanced biomethane certificate market.
Entry into force
India. Guidelines approved February 11, 2026.
Further reading
PNGRB National Guidelines for Biomethane/BioCNG Injection, 11 February 2026
Japan: Port of Yokohama commits to renewable gas certificates under national 1% grid target
What happened
On January 22, 2026, the Port of Yokohama published its Decarbonization Promotion Plan, which includes a commitment to procure Clean Gas Certificates to raise the share of e-methane in its city gas consumption above 1% by 2030. This aligns with Japan's national compliance target requiring a 1% renewable gas mix in the gas grid by 2030.
What it means for your business
Japan's grid target creates structured demand for renewable gas certificates, primarily sourced via import, with the US and Australia identified as key supply countries. The Port of Yokohama commitment is an early example of how industrial buyers are positioning against the 2030 obligation.
Entry into force
Japan. Port of Yokohama target: 2030.
National grid obligation: 2030.
Further reading
Port of Yokohama Decarbonisation Promotion Plan, 22 January 2026
China: ETS expansion and zero-carbon factory program signal a larger compliance market by 2030
What happened
China's Ministry of Ecology and Environment (MEE) issued a notice requiring companies with annual CO2 emissions above 26,000 tonnes in the petrochemicals, chemicals, copper, glass, paper, and aviation sectors to submit their 2025 emissions data by end of March 2026. Separately, MEE directed provincial governments to submit key emitter lists for aluminum, steel, and cement, the sectors expected to join the national ETS from 2027.
In the same period, China's Ministry of Industry and Information Technology, together with four other government departments, published guidelines for a zero-carbon factory development program. From 2026, pilot zero-carbon factories will be selected across the automotive, lithium battery, photovoltaic, electronics, machinery, and computing sectors, with energy-intensive industries including steel, petrochemicals, and building materials brought into scope by 2030. Green Electricity Certificates (GECs) and carbon credits are specifically recognized as market mechanisms to support the transition.
What it means for your business
Together, these developments point to a materially larger compliance market in China by 2027-2030. The mandatory reporting expansion confirms that China's ETS is on course to extend well beyond its current power sector scope, with rising compliance demand expected to drive increased uptake of China Certified Emission Reductions (CCERs).
The zero-carbon factory program adds a parallel demand signal for GECs and carbon credits across industrial supply chains. Companies sourcing from Chinese manufacturers in the covered sectors — automotive, electronics, battery, steel, and petrochemicals — can expect increased pressure to provide emissions reduction evidence, including certificate-backed claims. Companies with manufacturing operations or supply chain exposure in China should assess their position against both timetables now.
Entry into force
China. Emissions reporting obligation: March 2026.
Steel, aluminum, cement ETS inclusion: targeted 2027.
Zero-carbon pilot factory selection: from 2026.
Energy-intensive sector coverage: 2030.
Further reading
GLOBAL
GHG Protocol publishes Land Sector and Removals Standard after five years
What happened
The Greenhouse Gas Protocol released its Land Sector and Removals Standard in February 2026, following five years of development. The standard provides corporate guidance on accounting for agricultural emissions, soil carbon, and sequestration claims, including regenerative agriculture practices.
What it means for your business
Companies in food and beverage, agriculture, and land-intensive supply chains now have a credible, standardized methodology for accounting for Scope 1 land-based emissions and sequestration. The standard is relevant for any company making claims about soil carbon or agricultural emissions reductions in sustainability reporting. It will also inform how auditors and buyers evaluate carbon credit claims from land and agriculture projects. Companies that have made voluntary commitments to soil carbon or regenerative agriculture should assess whether their current accounting approach aligns with the new GHG Protocol methodology.
Entry into force
Global. Published February 2026. Corporate adoption timeline varies by reporting framework.
Further reading
Disclaimer
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