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RENEWABLE NATURAL (RNG)

FOR TRANSPORTATION Frequently Asked Questions

BASICS from restaurants, institutions, and What is RNG? industrial processors that is not BENEFITS OF RNG delivered to digesters or RNG (renewable ) is a key composted usually goes to emerging derived from . Converts waste to a valuable where it, too, can release and product As organic waste decomposes, it CO2 into the atmosphere. releases a biogas that is 40% to 60% Reduces GHG emissions How is RNG used? RNG can be used methane (CH4). This biogas can be wherever pipeline-supplied NG is used, Produces domestic, renewable captured and refined to remove including as transportation fuel and to fuel from plentiful feedstocks contaminants and increase its generate . content. The resulting gas, RNG, can Reduces and runoff be used in place of or mingled with Who currently uses RNG? RNG is Creates jobs geologic or fossil natural gas (NG) in used primarily as a transportation fuel pipelines, fueling stations, and storage in NG vehicles. Enhances fuel diversity tanks, or as a “drop-in” fuel requiring no What types of vehicles/ can Provides a steady supply of modifications in NG vehicles. run on RNG? Any engine that renewable What’s the difference between operates on NG can run on RNG. Supports organizations’ and biogas, biomethane, and RNG? fleets’ goals What infrastructure is needed to Biogas is the raw gas produced by the and dispense RNG? Uses existing technologies and breakdown of organic materials in an Infrastructure for transporting and natural gas infrastructure -free (anaerobic) environment. dispensing NG can be used for RNG. After removal of contaminants and RNG is a “drop-in” fuel for NG vehicles. other , biogas becomes RNG, Produces domestic, renewable fuel which is typically 90%+ methane. from plentiful feedstocks. According Biomethane is another name for RNG. BENEFITS to the U.S. Environmental Protection Converts waste to a valuable Agency (EPA), the U.S. generated What happens to biogas that’s not 267.8 million tons of municipal solid converted to RNG? product. RNG extracts value from decomposing waste, which can be waste in 2017 (or 4.51 pounds per It depends on the source. On , used by the producer in a closed-loop person per day), more than half of animal waste is often allowed to process or sold. Even the byproducts of which (139 million tons) was landfilled. decompose in pits or ponds, where it RNG processing—nutrient-rich solids The remainder was either recycled, produces methane. This methane, a and liquids—have value as a . composted, or combusted for energy powerful gas (GHG) with recovery. Food waste accounted for the 25 times the Reduces GHG emissions. On a largest share (~22%) of tonnage sent to of dioxide (CO2), is often lifecycle basis, RNG can reduce GHG landfills (EPA undated). According to released to the atmosphere. emissions by 95% as compared to the U.S. Department of diesel, giving it a nearly net zero At landfills and (USDA), animals at feeding carbon impact. In cases where biogas facilities (WRRFs), biogas is produced operations—including feedlots and would otherwise be released to the from the breakdown of organic waste other confinement facilities—produce atmosphere (e.g., open lagoons), RNG and typically “flared” to convert its 335 million tons of (dry weight) can have a negative carbon impact. methane content to CO2, which annually in the U.S. (USDA undated). reduces (but does not eliminate) its global warming potential. Food waste

RNG FOR TRANSPORTATION: FREQUENTLY ASKED QUESTIONS

Reduces odor and runoff. Compared • NG providers/ can gain a as well as contaminants. Landfills are a with uncovered manure storage, RNG renewable fuel supply to not only major source of raw biogas. usually eliminates . For and reduce their system-wide carbon Before it can become usable RNG, the operations, anaerobic content, but also provide customers biogas produced through can also reduce and with a voluntary, renewable fuel option. digestion must be upgraded and runoff to groundwater and • Fleets/vehicle operators can gain a conditioned. First, sulfide and downstream . drop-in renewable fuel for their NG water are removed. Then, CO2 is Creates jobs. RNG production can vehicles as well as an attractive removed via chemical, pressure, or create technical and support jobs in the renewable alternative to for membrane processes. development and operation of digesters potential conversions. For transportation use, the resulting and associated equipment. • Communities can improve the RNG can be compressed to make Enhances fuel diversity. RNG can be sustainability of waste disposal and renewable CNG or super-cooled to made from various feedstocks that are vehicular fuel use, thereby enabling a make renewable liquefied NG (LNG). in common supply. Unlike , . What are the sources of RNG RNG is not tied to uncertain or supply? volatile fuel markets. Most U.S. projects are at landfills, but Provides a steady supply of the number of projects associated with . Unlike or livestock operations and waste water is solar , weather and growing. Food manufacturers and conditions do not affect RNG wholesalers, supermarkets, production. restaurants, campuses, and hospitals Supports organizations’ and fleets’ are also potential sources for RNG. sustainability goals. Compared to Landfills Landfills account for more conventional and diesel, RNG than 75% of RNG production potential can reduce GHG emissions by 95%. while accounting for 56% of currently Uses existing technologies and operational RNG projects (ANL 2020). infrastructure. Biogas can be Livestock operations Animal manure RNG can be produced and used in a closed- upgraded to RNG with existing cleanup can be collected on a single large farm technologies, transported in existing loop process. Biogas systems use anaerobic or combined from several “cluster” NG pipelines, compressed and digestion to recycle organic waste, turning it into energy and liquid and solid coproducts farms and delivered to a single dispensed at existing compressed NG valuable in agriculture. anaerobic digester for RNG production. (CNG) stations, and used in If manure is stored in open lagoons that conventional CNG vehicles. RNG PRODUCTION AND emit methane, moving it to enclosed SUPPLY digesters prevents those emissions. The RNG produced also displaces WHO CAN BENEFIT FROM RNG? How is RNG made? fossil NG that would have been • Waste generators (e.g., livestock RNG is made from decomposing consumed by NG vehicles, thereby operators, food processers and . In the U.S., it is most reducing CO2 emissions. Avoided wholesalers, supermarkets, campuses, commonly produced through anaerobic and displaced restaurants, hospitals) can gain a (oxygen-free) digestion. The RNG fossil CO2 emissions can produce large sustainable outlet for their waste and feedstock—wastewater sludge, animal reductions in carbon intensity. may be able to turn disposal costs into manure, or food waste—is placed in a Water resource recovery facilities revenue opportunities. closed, oxygen-free tank where micro- Approximately 7% of the U.S.’s organisms break it down into a gas. • Landfills and WRRFs can gain a 16,000+ The resulting biogas is primarily revenue stream as well as potential use anaerobic digestion to produce methane and CO2. cost savings from heat and/or power biogas, most of which is flared or used generation. Because a lot of organic matter (e.g., to heat the digester and onsite facilities • CNG project developers and food waste, paper, ) ends up in or generate power. Only 14 WRRFS equipment builders, owners, and landfills, landfills themselves act as currently produce RNG that can be operators can see new . digesters, producing gas (LFG). used for transportation (WEF 2018). LFG is composed of methane and CO2,

November 2020 RNG FOR TRANSPORTATION: FREQUENTLY ASKED QUESTIONS

Some RNG pathways have very low carbon intensity (CI) scores because they capture emissions that would otherwise be released to the atmosphere. For farms with manure lagoons that currently emit high levels of methane, RNG production can yield negative CI scores. Diagonal lines in bars represent the range of carbon intensity scores that can be achieved with corresponding RNG projects. (CA = ; CNG = ; CO2e = equivalent; g = gram; LFG = ; MJ = megajoule; RD = renewable diesel; WRRF = water resource recovery facility.) (ANL GREET) Other sources RNG can be projects tend to be concentrated where Investors, equipment suppliers, and produced from residues and livestock support large industries—the developers Demand for RNG is energy through thermochemical dairy in California, New York, growing, and RNG production requires conversion, co-digestion, and dry and Wisconsin; the pork industry in a wide range of equipment to process, . These technologies are Iowa, , and North Carolina; and store, and transport the fuel. Producing, used in Europe, but have had limited the poultry industry in Delaware and installing, and operating that equipment application in the U.S. RNG also can North Carolina. WRRF-based projects creates additional sources of revenue, be produced from food waste, either tend to be at larger facilities located in as well as employment opportunities. alone or combined with from or near metropolitan areas. RNG retailers, resellers, or utilities livestock operations or WRRFs. How many RNG projects are Because of its low carbon intensity, Where Is RNG available? Until currently in operation, under RNG can contribute to organizations’ recently, RNG was available primarily construction, and planned? By the sustainability goals. It can also offset in California, where its very low carbon end of 2020, more than 150 projects the use of higher carbon, harder-to- intensity made it a valuable option for are expected to be operational, roughly displace like fossil NG and diesel. meeting that state’s Low Carbon Fuel 80 will be under construction, and 80 For utilities, resellers, and retailers with Standard (LCFS). With California now more projects will be in various stages significant investments in the latter restricting out-of-state–produced RNG of development in the U.S. Farm-based fuels, the addition of RNG offers the from qualifying for its low-carbon projects represent the largest share of possibility of reducing their products’ requirements (in order to promote in- planned projects. California has the net carbon intensity. state production), RNG is becoming most projects currently under Fleets and other end users Many increasingly available elsewhere. Some construction, followed by New York and organizations are deepening their nationwide fuel retailers are beginning Missouri (ANL 2020). commitment to sustainability. When to supply RNG to their fleet customers used in heavy-duty trucks, RNG is outside of California, and major fleets ECONOMIC INCENTIVES AND typically no more—and potentially like Anheuser-Busch and New York’s COSTS less—expensive than fossil NG or Metropolitan Transportation Authority diesel. RNG is also attractive for its low have announced plans to use RNG. What are the economic incentives for stakeholders? carbon intensity and “drop in” capability Where are RNG projects located? for fossil NG vehicles. Plus, RNG’s While RNG is produced all over the Waste generators Disposing of waste advantages are not tied to uncertain or U.S., some states are more active than is costly. Converting it to RNG can turn volatile fuel markets, unproven others. Landfill-based projects are that cost into revenue, especially with technologies, or the need for extensive concentrated in the central and the use of investment and production new infrastructure. Appalachian states. Farm-based tax credits and tradable credits for certified renewable or low-carbon fuels.

November 2020 RNG FOR TRANSPORTATION: FREQUENTLY ASKED QUESTIONS

Communities and local officials Are there incentives for using , installing, and operating RNG? States are beginning to RNG engages a broad community equipment to process, store, and incentivize the use of RNG. In October of stakeholders and generates transport RNG creates jobs. Those jobs 2019, the California Air Resources substantial environmental and generate tax revenues, with the effects Board amended the state’s Heavy-Duty economic benefits. By turning rippling through the economy. For Vehicle Incentive Program, which waste into products, RNG can individual livestock projects, replacing subsidizes the replacement of older, provide jobs and revenue to local open manure pits or ponds with higher-polluting vehicles with cleaner economies, a drop-in fuel to fleets, covered digesters reduces odors and alternatives. One restriction for NG and a bridge to a low-carbon groundwater contamination. vehicles is that they must be fueled future using existing vehicles and with California-produced RNG. Several infrastructure. Are there incentives for producing RNG? Yes. RNG qualifies for several other states are encouraging utilities to types of tax credits and other offer RNG to their customers to help References incentives. meet state climate goals. Federal incentives The Internal Increasingly, communities and ANL (Argonne National Laboratory), Database (2020), accessed 9-29-20. Revenue Section 45 view RNG as a key tactic for meeting their sustainability goals Production Tax Credit is available to ANL, GREET (Greenhouse gases, Regulated producers who convert biogas to and demonstrating their commitment to Emissions, and Energy use in Transportation electricity, while the GHG reduction. Model) (2019).

Excise Tax Credit is available to How do incentives affect the cost of EPA (U.S. Environmental Protection Agency), producers of vehicle fuel. Advancing Sustainable Materials Management: producing RNG? On a project level, 2017 Fact Sheet (2019), accessed 10-28-20. RNG produced from landfill gas or from incentives can mean the difference biogas produced at farms or WRRFs between profit or loss. Over many USDA (U.S. Department of Agriculture), Natural Resources Conservation Service, Estimates of qualifies as a cellulosic under projects, incentives can bring the Recoverable and Non-Recoverable Manure the Renewable Fuel Standard (RFS), average cost of supplying RNG on par Nutrients Based on the Census of Agriculture enabling it to receive Renewable with that of NG from fossil sources. (undated), accessed 9-22-20. Identification Numbers (RINs). RINs (WEF) Water Environment Federation, Energy: can be traded to companies obligated How does the source of RNG affect Water Resource Recovery Facilities—Energy to produce or sell . its cost? Because of their size and Generation Trends and Highlights (2018), RNG produced from food waste ability to produce biogas without a free- accessed 9-29-20. qualifies for a less-valuable advanced standing digester, landfills can produce Other Useful Resources biofuel RIN, which can also be traded RNG at an average cost of roughly to obligated parties. $0.90–$1.00/diesel gal equivalent U.S. DOE, Alternative Fuels Data Center, State incentives RNG may also qualify (dge). For individual projects, the cost Renewable Natural Gas Production can range from $0.40/dge to $2.00/dge. for state incentives, the most valuable U.S. EPA, AgSTAR: Biogas Recovery in the of which are credits under California’s The cost of RNG produced from Agriculture Sector Low Carbon Fuel Standard (LCFS) and anaerobic digestion of livestock manure, wastewater, or food waste U.S. EPA, Landfill Methane Outreach Program Oregon’s Standard (CFS). (LMOP) Both provide significant price support tends to be higher and more variable. for RNG produced with a low carbon Reported values range from less than ANL, AFLEET tool (Alternative Fuel Life-Cycle $0.30/dge to nearly $4.00/dge. Environmental and Economic Transportation intensity (or reduction in CO2 emissions tool) as compared with the status quo). for other alternative fuels can be found While the value of these credits will in the most-recent Clean Alternative Fuel Price Report. depend on market forces, they are expected to remain at approximately CONTACT $200/ton for the LCFS, somewhat less Marianne Mintz for the CFS. Principal Transportation Energy Analyst

630-252-5627 [email protected]

November 2020