What is Carbon-Negative Fuel and How Can Fleets Procure It?

June 30, 2020

In partnership with:  Trillium

One question we hear often from our customers is how can the use of renewable natural gas as a transportation fuel remove carbon from the atmosphere? This is a hard concept for many to wrap their heads around. Although difficult to comprehend, the use of “carbon-negative” fuel is an important element not only of our business, but also for any community seeking to reduce its climate footprint.

What Are “Carbon-Negative” Fuels

The term “carbon-negative” is a bit of a misnomer. A more appropriate term would be “carbon dioxide-equivalent negative.” This means the greenhouse gases (GHGs) generated by its use are less than the GHGs removed by its production when calculated on a carbon dioxide-equivalent basis. For this to happen, the carbon-negative fuel must come from a feedstock that is currently contributing to climate change.

The term “carbon-negative” is a bit of a misnomer. A more appropriate term would be “carbon dioxide-equivalent negative.”

The most prominent of such fuels is renewable methane gas. Methane is the primary energy bearing molecule in natural gas, and most methane comes from the earth’s crust, so called “fossil” fuel. But renewable methane, what we will call renewable natural gas (RNG) comes from a variety of sources including society’s management of “waste” organic material. Each year, people dispose of billions of tons of sewage, discarded food, grass and tree clippings, agricultural wastewater, dead and dying trees and other organic feedstocks that produce millions of metric tons of methane, carbon dioxide (CO2) and other climate-altering gases as they degrade.

Capturing Fugitive Methane

When the methane from these renewable resources goes into the atmosphere (known as “fugitive” methane), it’s a much more powerful climate altering gas than is carbon dioxide, particularly in the short term. Methane only exists in the atmosphere for 10-20 years before it breaks down into molecules of CO2 and water. But during that initial phase, methane is far more efficient and effective at trapping heat than is CO2. The measurement of the efficiency of a molecule to trap heat is call Global Warming Potential (GWP). The yardstick for GWP is carbon dioxide, which has a GWP of 1. Methane, on the other hand, has a GWP of 84 for the first 20 years. This effectively means that methane is 84 times better at trapping heat in the first 20 years of its life in the atmosphere than is CO2.

Renewable methane, RNG, comes from a variety of sources including society’s management of “waste” organic material.

This is an important concept when we focus on capturing the fugitive methane produced by landfills, sewage treatment plants, dairies, and other sources before it leaks into the air. If we can do that, then clean and supply it to transportation end users as a substitute for gasoline, diesel or even fossil natural gas, not only are the emissions of a high GWP climate pollutant being avoided, but so are the GHGs associated with the production, transportation, distribution and combustion of the replaced fossil fuel.

Low Carbon Fuel Programs Incentivizing Carbon-Negative Fuels

Carbon-negative fuels like RNG are particularly important and valuable in states that have established low carbon fuel programs. The gold standard for such programs currently is California’s Low Carbon Fuel Standard (LCFS). This program targets a 20% reduction in the carbon content of the fuels used to power the state’s transportation sector by 2030. Although Oregon also has a similar program, and other states are contemplating the establishment of comparable plans (Washington, New York, Minnesota, Colorado, to name a few), California’s LCFS is the oldest and by far the largest.

California’s LCFS is the gold standard for carbon fuel programs, which targets a 20% reduction in the carbon content of fuels that power the state’s transportation sector by 2030.

For the California LCFS to function, each fuel that is intended to provide energy to the state’s 25 million cars, trucks and buses must undergo a “carbon intensity” assessment. These assessments, also known as “Carbon Intensity Pathways,” calculate the life cycle carbon emissions of every step needed to bring a fuel to the tank or battery of a vehicle. These steps, some of which were outlined above, include production of the raw fuel, transportation from the site of production to the site of processing, processing (refining or other forms of cleaning up or prepping the fuel for consumption), transportation from the site of processing to the site of distribution, fueling and the use of the fuel on board the vehicle.

This life cycle is typically referred to as “well-to-wheels,” and covers every stage in the existence of the molecule or electron used to enable the motion of a vehicle. In fact, while battery electric vehicles are touted as zero emissions, the well-to-wheels carbon intensity rating of electricity is not zero because some electricity is generated by coal or other fossil fuels. Even in California where the power mix includes an increasing amount of renewable energy sources, the carbon intensity is 16.3 gCO2e /MJ.

Carbon-negative fuel generates LCFS credits

Generating and Buying Low Carbon Fuel Credits

Fuels that have a carbon intensity below a pre-determined benchmark for that year generate credits. Fuels whose CI value is greater than the benchmark generate deficits. To be sold in California, the producers of fuels that generate deficits have two choices – they can either find ways to reduce the carbon intensity of their product’s pathway or they can buy credits from fuels that generate them.

For example, the carbon intensity of ultra-low sulfur diesel in California is 100.45 gCO2e /MJ. If that producer has done nothing to reduce the carbon content of their fuels (e.g., reduced the energy used to refine the product, procured renewable hydrogen as a feedstock, changed to a crude oil supplier closer to the refinery) then they have to buy credits equivalent to 1 kilograms (2.2 lbs.) of CO2e per gallon of diesel they sell in California.

For the California LCFS to function, each fuel that is intended to provide energy to the state’s 25 million cars, trucks and buses must undergo a “carbon intensity” assessment.

The diesel fuel provider in our example is generating 1.0 kilogram of deficits per gallon of diesel they sell in California. To participate in the California market, this fuel provider must now secure credits to offset the carbon deficits of their fuel. One way to obtain these credits is to go to the LCFS market and buy them.

This is where RNG comes in. Virtually all sources of RNG have CI values lower than the diesel and gasoline compliance standards. Thus, virtually all RNG generates credits, which can then be bought by conventional fuel producers to meet their LCFS compliance obligations. The lower the CI value, the greater number of LCFS credits that are generated. The greatest reductions are created by carbon-negative fuels and therefore have the highest value.

For instance, RNG from a dairy usually certifies to a CI value of -250 gCO2e /MJ or below. Calculating the credits that are generated when substituting natural gas for diesel fuel is a bit more complex and requires the use of factor known as the Energy Economy Ratio (EER). The EER is simply an estimate of the efficiency of a vehicle technology compared to the baseline diesel or gasoline vehicle. In this example, RNG is used to replace diesel fuel so the EER is 0.9, (reflecting a 10 percent efficiency penalty for natural gas engines compared to diesel engines). Even with this discount, dairy biogas receives about $9/diesel gallon equivalent from the LCFS.

Fuels that have a carbon intensity below a pre-determined benchmark for that year generate credits. Fuels whose CI value is greater than the benchmark generate deficits.

Not only does RNG from dairies generate money for farmers, fleets and fuel providers, but it dramatically reduces GHG emissions. One heavy-duty truck fueled with dairy biogas offsets the carbon emission from 2.5 diesel trucks. This is why carbon-negative RNG is so important.

Take Action with RNG

While the process of acquiring RNG and determining its value from both an emissions and monetary perspective may seem daunting, experts on the Trillium team can walk any fleet manager or sustainability officer through a climate action plan centered around this carbon-negative fuel.

If you operate a of fleet of natural gas vehicles and you’d like to be fueled with cleaner, low carbon renewable natural gas, please contact me or any of my Trillium colleagues, and we’ll set you up. If you own a fleet of diesels and would like to dramatically reduce the air quality impact and climate footprint of your operations, Trillium can help. The supply of RNG is growing rapidly, and our portfolio of RNG is expanding. We stand ready and able to help any fleet interested in using this important renewable fuel.

To learn more about Trillium’s portfolio of fueling solutions visit www.loves.com/trillium or contact Marc Rowe at MDRowe@trilliumcng.com.