One Big Beautiful Bill Act: RNG & SAF Excite and Activate Capital Markets
Renewable natural gas (RNG) is one of the bright spots in clean energy emerging from the One Big Beautiful Bill Act (OBBBA). Or, as one attendee at the RNG & SAF Capital Markets Summit 2025 in Houston said, it’s one of the “least disliked” renewable energy sources by Republican leadership in Congress and the Trump Administration. Excitement about opportunities ahead animated much of the conference, where industry leaders, investors, lenders, and project developers convened to assess the chance for advancement in the RNG and sustainable aviation fuel (SAF) sectors. The consensus is that while the market is expanding rapidly — driven by policy support, technological advancements, and corporate decarbonization targets — success will depend on navigating risks and adopting innovative approaches to financial and risk management.
Investment and Financing Evolution
Panelists described “cautious optimism” in the marketplace. New and expanded tax incentives, following the OBBBA, have transformed the economics of RNG and SAF, spurring a sharp increase in market activity and enabling new forms of project financing. Notably, the transferability of tax credits is revolutionizing funding, broadening participation beyond traditional tax equity investors, and creating new liquidity for projects, even those without long-term off-takers.
Lenders highlighted an active but selective debt market for RNG, with financing most accessible to projects featuring established sponsors, proven technology, and robust contracting (fixed- or partially fixed-offtake agreements). Creative structures, such as loans backed by the United States Department of Agriculture (USDA), Investment Tax Credit (ITC) bridge financing, and portfolio financing for aggregating smaller projects, are addressing capital needs. The entry of institutional investors and the growing role of tax-exempt bonds for large deals signal increasing sophistication and maturity in capital sources.
Risk Landscape
Growth will require effective risk management, experts said across most sessions at the conference. Compliance with tax credit rules, technical performance, and policy volatility surfaced as persistent concerns across all panels. Early engagement with compliance experts, robust documentation, and reliance on independent due diligence will be key to minimizing potential exposure to regulatory audits and penalties.
Lenders and insurers alike underscored the importance of working only with experienced engineering, procurement, and construction (EPC) and legal advisors. They also stressed the importance of leveraging insurance products to build resilience into projects. Their suggestions ranged from tax credit insurance (to protect against recapture risks) to property, casualty, and business interruption coverage. As regulatory guidance continues to evolve, successful projects will stand out by modeling conservative scenarios, crafting flexible project structures, and ensuring all stakeholders are aligned on risk sharing.
Market Outlook
Despite sustained demand, substantial capital requirements, and increasing societal support for renewable fuels, market participants acknowledged the ongoing challenge of raising sufficient capital amid policy and market uncertainty in regulation and credit markets. Successful projects will be distinguished by rigorous risk mitigation, transparent deal structuring, and adaptability to policy and market trends.
The RNG & SAF Capital Markets Summit 2025 demonstrated strong industry momentum underpinned by supportive policies and growing market potential. At the same time, it highlighted the need for proactive, sophisticated capital- and risk-management strategies as prerequisites for scaling the sector. Understanding the opportunities for the sector and the potential risks will be key to success for these clean energy bright spots in OBBBA.
Read more about Silverline’s perspectives on the opportunities and challenges presented by an evolving economic and political environment here.
