Is renewable natural gas a viable route to decarbonizing fleets?

Across the United States and Canada, interest is picking up in the potential for renewable natural gas (RNG) to decrease fleet emissions. That interest stems from three points in RNG’s favor: fewer carbon emissions and a lower price point than competing fuels, as well as minimal friction to incorporate into existing operations.

A 2016 UC Davis study found that long distance freight trucks accounted for 53 percent of natural gas used by the transportation sector across the United States in 2014. That single data point obscures a few key questions, such as whether or not RNG is constricted by operational limits, how it compares financially for both producers and consumers, and whether or not it even offers a smaller carbon footprint than diesel and electricity. Through interviews with three industry leaders operating across the US and in British Columbia, we dive into these issues below.

The findings are clear: “Operationally, there is no limit,” Clean Energy Fuels Director and Head of Corporate Sustainability Ashley White noted. Not only that, but federal Renewable Identification Number (RIN) credits, as well as state programs such as California’s Low Carbon Fuel Standard Program (LCFS), pass environmental credits through to the end consumer, reducing the cost of RNG to less than other fuels. For fleets interested in pursuing RNG today, though unequipped to utilize natural gas fuel, there are even funds emerging to subsidize that equipment investment.

To top it all off? As suspected, RNG’s carbon intensity — the emission rate of a pollutant — is lower than both diesel and electricity.

How Useful is RNG?

“Renewable natural gas can be used in nearly every application that gasoline and diesel vehicles can be,” White of Clean Energy Fuels said. The company’s RNG customers range in size from hub and spoke delivery and service operations to transit and refuse fleets to single-truck operators in the Port of Los Angeles.

Sam Wade is the current Director of State Regulatory Affairs at The Coalition for Renewable Natural Gas (RNG Coalition). The former chief of the Transportation Fuels Branch at the California Air Resources Board, where his oversight encompassed the creation of California’s LCFS program, Wade concurred that, “There are no physical limitations, so RNG can be a solution across the country.”

Further north, Scott Gramm, the Manager of Renewable Natural Gas for FortisBC Energy Inc., and recipient of the 2019 Canadian Biogas Industry Award, added that the RNG going into “the pipeline or a vehicle is 100 percent interchangeable with compressed natural gas (CNG), but it's from a renewable source.” Just how similar is RNG to conventional CNG? Renewable natural gas is an industry trade name for biomethane, but “rather than methane from a coal bed, you’re getting methane from organic waste,” he explained.

Dollar for Dollar: RNG vs. Diesel

There is no denying that the flat cost of one gallon of diesel is less than one diesel gallon equivalent (DGE) of RNG. While that is true, it neglects the significant financial incentives available today through both California’s LCFS program and federal RIN Credits.

As the UC Davis study found, the RNG sourced from landfills, dairies, municipal solid waste, and wastewater treatment plants brings with it environmental credits. Sahar Kamali, Director of Business Development at Clean Energy Fuels, echoed the study’s findings with a 2019 update that RNG is available “either at parity, or at a discount to conventional natural gas fuel.”

The UC Davis study found that current credits could open up a supply of up to 82 billion cubic feet per year (bcf/y) of RNG in California alone — that’s over 600 million gallons of fuel in DGE. These credits will become increasingly important as industries across the United States and elsewhere continue to receive public mandates to increase the use of renewable energy sources.

Gramm’s colleague at FortisBC, Mike Bains, manager of regulatory and commercial development, was enthusiastic about the “win-win-win” presented by government mandates. CleanBC “presents an opportunity for companies like FortisBC to invest and earn a return on the investments, support government objectives of lowering GHG emissions, and help lower operational costs for end-use RNG customers all at the same time,” Bains said.

RNG's smaller footprint

When it comes to emissions, RNG’s advantage over diesel is clear. “RNG generally reduces greenhouse gas emissions by 60 to 70 percent,” White said. Diesel’s carbon intensity of roughly 100 grams of CO2 equivalent per megajoule (gCO2e/MJ) – the standard unit of measure when comparing the carbon intensity of disparate fuels – pales in comparison with RNG, which comes from methane that would have otherwise vented into the atmosphere. That RNG can be “as low as minus 250 CI,” White explained.

How does RNG compare to electricity for powering vehicles? In a 2018 Advanced Clean Tech News article, Thomas Lawson, President of the California Natural Gas Vehicle Coalition, wrote that the RNG from food waste and other sources – used to power heavy-duty trucks–has a carbon intensity ranging from negative 25.5 to positive 26.2. By comparison, he wrote, battery electric trucks powered by California’s typical grid supply have a carbon intensity of 38.9.

When determining total emissions, the full lifecycle of each energy source must be examined, not just the moment of fuel consumption. Gramm pointed out that, “The CI of natural gas on a [methane] wells to wheels basis is very competitive with electricity.” As highlighted in the example above, while electricity may “burn” cleaner at the moment of consumption, the supply source must be taken into consideration when evaluating the total carbon intensity of a fuel.

RNG's future in fleets

For the end consumer, RNG’s lower carbon footprint equals dollars in the form of low carbon fuel tax credits passed through from energy suppliers like FortisBC. Bains leaned in on this key differentiator: “Our current selling price for RNG is well below the cost of electricity. Furthermore, RNG on an average basis has a lower Carbon Intensity than even electricity in British Columbia, which is not a widely known fact.”

Even if a transportation fleet does not yet have the capacity to use RNG as a fuel source, options are emerging to overcome that final barrier. For White, “The key to unlocking RNG’s potential… is putting these vehicles in their fleet today.” To that end, she highlighted Clean Energy Fuels’ Zero Now program, which defrays costs to fleets looking to adopt new, cleaner burning engines. The program leverages “upstream and downstream partnerships in the supply chain,” such as a 2018 deal with Total, who infused the company with $83.4 million–along with an additional offer of $100 million in credit.

The existence of Zero Now is no indication that RNG as an industry is in its infancy, either. Wade demonstrated the widespread adoption of RNG by way of citing the RNG Coalition’s lengthy roster, with more than 175 members including household names ranging from Waste Management to Chevron. He summed up today's RNG market as having both “momentum and a lot of room to grow.”