Is RNG a California-Only Fuel?

December 2, 2020

In partnership with: Trillium

Image: Trillium

There is a growing interest in renewable natural gas by fleets across a range of sectors due to its ability to seamlessly replace conventional natural gas. Sourced from organic waste streams like green waste and livestock manure, RNG is made up of captured methane that would otherwise escape into the environment. This makes a fuel that is locally sourced, plentiful and low carbon.

Due to financial incentives available through state-level, low carbon fuel programs, as well as the national Renewable Fuel Standard program, RNG can be used as a transportation fuel with a total cost of ownership on par with, or cheaper than, diesel. These market-based programs incentivize the production and consumption of low-carbon renewable fuels by rewarding their low-carbon attributes with real monetary value. In these programs, the lower the carbon content of the fuel, the more value the fuel produces in the form of “credits” in low carbon fuel programs or “RINs” in the Renewable Fuel Standard program. This enables fuel suppliers like Trillium to pass on value in the form of cost savings for fleets fueling with RNG.

RNG can be locally sourced, made up of captured methane from organic waste streams.

One of the most successful low carbon fuel programs in the world is California’s Low Carbon Fuel Standard, which has made the state the epicenter of a booming RNG industry. However, this does not mean it is a California-only fuel. The reality is that with a little planning, fleets across the U.S.—not just in California—can share in these same cost- and emission-reductions benefits.

The Epicenter of the RNG Revolution

It is true that California continues to make great strides in RNG investment and production. In just the first half of 2020, RNG made up nearly 90% of all natural gas vehicle fuel consumed in the state.

Accelerated by the state’s Low Carbon Fuel Standard (LCFS) program, RNG use as a transportation fuel has increased dramatically. According to CARB’s quarterly LCFS data summary, between 2013 and 2019, RNG consumption in California (which is comprised of bio-CNG and bio-LNG) increased from 10.2 million DGE to 139.3 million DGE–an increase of 129 million DGE, or 1,260%.

California’s LCFS program made the state the epicenter of the RNG industry, but with planning, fleets across the U.S. can fuel with RNG.

Sourced from a variety of feedstocks including dairy farms, landfills and wastewater treatment plants, California’s average renewable compressed natural gas is now carbon-negative at -.85 grams of carbon dioxide equivalent per megajoule of energy, or gCO2e/MJ—making it the first time in the history of the LCFS program that any low carbon fuel portfolio has achieved a carbon negative status in any three-month reporting period of the program. This means fleets fueling with just California’s average mix of renewable compressed natural gas can achieve not just carbon-neutral, but carbon-negative, operations.

And, with more sources of increasingly carbon-negative RNG, such as biogas produced from dairy digesters, coming online in the next few years, California’s RNG is on track to become even cleaner. The 119 million DGE of California-produced RNG for transportation that will be online by January 2024 is on track to have an average carbon intensity of negative 101.74 gCO2e/MJ.

A Growing Industry Across the U.S.

While it may seem like all-things RNG are happening only in California, the reality is that there is investment and development in RNG happening at a record pace across the U.S.

Over the past year alone, the North American RNG industry has developed more projects than it did during in its first 30 years in existence, according to the RNG Coalition.

From landfill gas projects, wastewater treatment plants and anaerobic digesters capturing methane from livestock farms—development across the U.S. is racing to keep up with growing demand from domestic fleets.

There is investment and development in RNG happening at a record pace across the U.S.

Looking outside of California, interest and development in projects continues to grow. While they produce both electricity and pipeline quality renewable natural gas, landfill gas-to-energy projects, for instance, are currently operating in 48 states.

Municipalities large and small are leading in the development of innovative, and profitable, wastewater treatment plants which can convert would-be fugitive methane into biogas-producing revenue streams from a previously ignored resource. Some cities harness this value by capturing tons of climate-altering greenhouse gas emissions and converting it to electricity to generate power and heat.

Others, like Des Moines Wastewater Reclamation Authority, will enter agreements to provide valuable biogas as feedstock for RNG as vehicle fuel in exchange for revenue generated by credit programs.

In the Midwest and Southeast, large-scale projects are utilizing livestock waste from hog and dairy farms to create transportation-ready fuel that can have carbon intensity ratings 200-300% lower than even a battery electric vehicle powered by renewable energy such as solar or wind.

And 2021 brings the potential for more states implementing low carbon fuel standard programs, helping to further build the economic case for expanding the use of this renewable and cost-effective fuel across the U.S.

Best Next Steps for Sourcing RNG

For fleets interested in sourcing RNG, the key is to start planning today.

A first step for fleets looking to implement an RNG fuel program is to establish a relationship with your fuel supplier. Working with your fuel supplier directly and expressing interest in RNG for your operations lets your provider be proactive in exploring supply sources for you. When fleets convey that cost-efficient and low-emission RNG are top priorities for a fleet, fuel suppliers will deliver.

A first step for fleets looking to implement an RNG fuel program is to establish a relationship with your fuel supplier.

Beginning conversations early with your fuel supplier is the key to laying the groundwork to successfully procure RNG. Allowing for at least a six-month lead time will give fleets ample time to work with their fuel provider to properly plan, source and procure the fuel.

As each fleet and fueling situation is unique, the next step is to reach out to your dedicated business representative, helping to ensure they create a procurement plan that works best for your fleet’s need.

Your RNG Partner

Aligning environmental and economic sustainability is at the top of minds for fleets nationwide, not just in California, and RNG offers a cost-effective path to emission reductions today.

No matter what stage your fleet falls in, when evaluating RNG as a fuel, Trillium can help. With over 25 years’ experience servicing the diverse needs of fleets, Trillium can navigate the goals of your organization to meet operational and sustainability benchmarks.

Whether you operate a fleet of natural gas vehicles and want to begin sourcing low-carbon RNG, or you want to dramatically reduce your emissions by transitioning existing assets to natural gas vehicles fueled by RNG, Trillium is here to help you meet your goal—wherever you may be located.

To learn more about Trillium’s portfolio of fueling solutions, visit www.loves.com/trillium.