June 2025, Vol. 252, No. 6
Features
Cost Remains Top Hurdle as Renewable Natural Gas Projects Expand
By Richard Nemec, Contributing Editor, North America
(P&GJ) – In April, at Columbia University’s 2025 Global Energy Policy Summit in New York, one of the programs featured a conversation with former Biden administration National Security Advisor, Jake Sullivan.
Sullivan, now a Harvard professor, at one point noted that his former boss in the White House was pushing energy security through a combination of industrial policy, tariffs and sanctions — some of the same economic tools the Trump administration is now using to launch a global trade war.
As Sullivan’s appearance, among others, at the one-day annual summit clearly indicated, Columbia’s energy policy think tank aimed to help address some ongoing tough questions, regardless of the different political outlooks.
Among those, what lessons can be drawn from the Biden administration’s approach to countering China (as opposed to Trump’s approach)? And looking ahead, what should the U.S. prioritize when it comes to energy security?
When it was over, officials at Columbia’s Global Energy Policy Center concluded “the broad shift on both sides of the political aisle,” centered on national security, economic security and supply chain resilience, has “enormous implications” for the clean energy transition, particularly some low-carbon fossil fuel alternatives, such as renewable natural gas (RNG).
RNG is quietly continuing to grow and to do so somewhat under the radar in North America, and there has also been increasing interest in RNG from Europe and other overseas markets.
Also in April, the Trump administration began expressing some support for RNG when a U.S. Department of Energy (DOE) official spoke at a policy summit in California hosted by the Washington, D.C.-based The Transport Project (TTP).
“With the energy demand the president is looking at for the future, we have no choice but to go all in with all forms of energy, and that, of course, does not exclude RNG,” DOE’s Chief of Staff Victor Silva Santos told the clean fuels meeting in Anaheim, California.
TTP CEO Daniel Gage, a veteran in the natural gas transportation space, said unabashedly that “trucking fleets operating RNG-fueled trucks save money, slash emissions and benefit from proven, affordable [and] clean technology without delay and without compromising business operations.”
The carbon content of RNG motor fuel continues to drop, Gage maintained, while RNG is making up more and more of the natural gas motor fuel market.
In 2023, 79% of natural gas used in on-road transportation was RNG, up from 69% in 2022. Since RNG is interchangeable with any NGV, in either compressed or liquefied form, RNG is one ultra-low-carbon/carbon-negative fuel that does not require the build-out of new specific infrastructure, since it is dispensed from existing stations.
In the past 14 years, RNG production facilities have expanded in the United States and Canada, from 31 in 2011 to 474 at the time of the last complete national accounting, in April 2024.
“RNG is growing by leaps and bounds in North America due to its confluence of decarbonization, energy security, and economic benefits,” said Dylan Chase, senior communications manager for the Sacramento, California-based RNG Coalition.
U.S. RNG production last year totaled 130 Bcf and another 52 Bcf in annual capacity was under construction, according to the RNG Coalition. In total, the marketing organization counted 821 production facilities that are either in operation, under construction or planned, with about 40% of those projects still in the planning stages. Nearly 70% of that production comes from municipal solid waste facilities, including landfills.
“Given the projected future energy demand in North America, it’s not if we end up needing to rely on RNG, but just when we wake up to the fact and put the right policy support behind it,” Chase said.
RNG supporters point out that the fuel is more than a decarbonization tool because of its role as an “important lever” for energy security efforts. Chase added that Europeans already recognize this, and that is why on the other side of the Pond, the EU nations are targeting big future growth in the use of RNG by 2030 as they move away further from reliance of Russian oil and gas.
The fuel’s economic impact also is growing, with a $7 billion contribution to the U.S. GDP in 2024, up from $2 billion in 2021.
Recent white papers indicate a positive outlook for RNG, with growth in both production and usage. The market is expected to continue to expand, driven by factors like the energy transition, policy support and financial incentives. However, lingering challenges may hinder widespread adoption.
Key themes from recent white papers cite both advantages and challenges, noting that the RNG market is poised for significant growth, with some forecasts predicting annual growth rates up to 19% through 2031, as the fuel continues to be produced from various organic waste sources, including agricultural waste, food waste and landfill gas, expanding the potential for RNG production.
Some pundits see RNG as a key tool in decarbonizing various sectors of the energy economy, covering transportation, utilities and industrial processes. They acknowledge that government policies, including renewable fuel standards and financial incentives, have played a crucial role in driving RNG development. Whether these incentives stay in place is uncertain, in the midst of the current Trump administration’s efforts to substantially downsize the federal government.
Among the existing disadvantages, high capital costs, shrinking incentives and regulatory complexities can hinder RNG project development and adoption. At the same time, proponents emphasize that technological advancements, such as greater automation and microbial engineering, are improving the efficiency and scalability of RNG production.
In the fall of 2024, Canadian-based Woodland Biofuels, kicked off the development of the world’s largest carbon negative RNG production facilities whose first phase is expected to be commercially viable by 2028.
Penciled in for a site at the Globalplex multimodal facility, in the Port of South Louisiana, the $1.35 billion facility aims to produce both RNG in phase one and ultra-green hydrogen in phase two of development by the Toronto-based company, using waste biomass to produce sustainable biofuel for transportation, heating and power generation end uses.
Selling the expensive undertaking as an economic multiplier for the Louisiana Gulf Coast, Woodland officials stress the estimated 500 construction jobs and 110 high-paying, permanent new direct jobs at the phase one facility and up to 369 other jobs in the region. The first phase is expected to remove up to 210,000 tons of CO2 for the RNG production annually, and 660,000 tons of CO2 with the second phase producing green hydrogen.
The South Louisiana port is the second-largest energy transfer port in the nation, and state officials note it has a “multi-generational skilled workforce and abundant natural resources.”
Woodland expects to “permanently” remove hundreds of thousands of tons of CO2 from the atmosphere annually and store it safely underground, according to Woodland Biofuels CEO Greg Nuttall. He indicated that the Canadian company is seeking to establish “deep ties” in the Louisiana Gulf communities.
Industry research centers are contributing to the literature on RNG in terms of gas quality, operating guidance and assessing infrastructure and end-use impacts. Chicago-area GTI Energy has helped develop online biomethane gas quality monitoring techniques and with the development of a universal analytical technique to determine how much siloxane, or silicon-containing materials, there is in biogas, to prevent build up in combustion systems that can increase operating costs and harm efficiencies.
Part of GTI’s work also helped the Northeast Gas Association develop an RNG interconnect guidance document and assess various potential RNG impacts on end-use applications.
Operationally, siloxane monitoring is becoming more crucial. As a result, monitoring and filtering systems are essential for managing siloxane levels in biogas, especially in facilities like wastewater treatment plants. The concentration of siloxanes in biogas has been increasing due to the growing use of silicon-based compounds in various products. Overall, managing siloxane content is crucial for optimizing the performance of biogas-to-energy systems.
Proponents acknowledge RNG’s relative higher cost, but emphasize it provides a “higher-impact” energy solution.
“Most of the integrated oil groups have stakes in RNG,” the Coalition’s Chase pointed out. “BP owns Archaea, the largest RNG producer in the United States, and Chevron has a joint venture called Brightmark. Shell has an RNG contract with the Los Angeles Metropolitan Transit Authority.”
Investment interest remains strong, according to Chase, who notes that Trillium, a subsidiary of the Love’s national network of truck stop fueling and eating facilities, owns a compressed natural gas fueling network.
“Deal-making in the space has slowed somewhat since the frenzy that followed the pandemic, but this is also true around many industries,” he said.
Industry officials note that RNG contracts follow the same format and process as contracts for oil and gas field gas contracts. Customers buy from trading desks, such as BP, Shell, DTE Energy Trading and others, or they purchase directly from RNG producers, such as Ameresco, Archaea, Cambrian, DTE Vantage and Montauk. Carbon intensity (CI) verification of the supplies is often part of the RNG deals.
The California Air Resources Board (CARB) has a recognized system for assessing the carbon intensity (CI) of fuels. CARB sets various levels of intensity for RNG, depending on where it comes from, with a range of 47 to minus-338. RNG from landfills has the highest CI, at 47, among the different sources of RNG. As a comparison, gasoline's CI is 101. The rest of the RNG sources, including wastewater treatment (4), food waste (-11), dairy manure (-309) and swine manure (-338), all have much lower CI levels, with the two large negative numbers being the best.
A fuel’s CI is determined by assessing its total carbon emissions from the entire lifecycle of a fuel from production to consumption — including feedstock types, raw materials, processing, transportation and final use. A negative carbon intensity value means that the use of this fuel actually reduces global warming
potential in the atmosphere. RNG generated from animal waste tends to carry negative CI scores, and as such, generally receives more favorable pricing in California than RNG produced from landfills.
From a research and regulation standpoint, RNG could be advanced by some technology still being looked at. Venerable Cummins Inc., the century-old engine maker, has a new X15N natural gas engine that clean fuel players think will have some significance for the CNG truck sector.
Cummins’ 15-liter version joins a suite of natural gas engines, including the B6.7N, L9N and ISX12N. The 15-liter is currently available in Peterbilt and Kenworth truck models and will soon be available in Freightliner’s Cascadia line. This engine, with its ability to deliver up to 500 horsepower and torque of up to 1,850 lb/ft, provides a viable workhorse alternative to traditional diesel engines.
“It is expected to make significant inroads into the [heavy duty truck] Class 8 market, giving natural gas a new ultra-competitive edge in the space after dominating the transit, refuse and short-haul trucking alternative vehicle markets for years,” Transport Project’s Gage said.
Chase, from the RNG Coalition, also notes that French-based RNG producer Waga Energy has been rapidly spreading new projects around the United States at small to medium-sized landfills, which had not been previously tapped much.
Another aspect ripe for technology improvements comes under the “rubric of “CO2 monetization,” Chase said. This refers to the opportunities to capture and monetize all the renewable gases during RNG production. Obviously, the more this can be done, the better the economics of a given project and the more incentive for investors.
“RNG production also provides a significant amount of byproduct CO2, which will be an important consideration for the industry as markets and infrastructure of CO2 transport develop,” he added.
In January, at a one-day conference, GTI Energy researchers supported the notion that RNG and hydrogen offer significant opportunities for decarbonization, emphasizing that RNG with negative CI scores can provide carbon dioxide equivalent (CO2e) emission reductions at competitive costs, ranging from $21 to $82/ton.
They also noted that the methodology behind calculating negative CI scores requires transparency and could impact eventual real-world applicability. The research center’s calculations show that 3 Bcf of RNG with a -60 CI value displaces the equivalent of CO2 emissions from 6 Bcf of natural gas.
In a six-year-old study funded by the American Gas Association (AGA) Foundation, it was concluded that RNG’s wide use in domestic residential energy needs could reduce emissions from gas appliances by up to 95%.
“Greenhouse Gas (GHG) emissions reduction potential in [the study’s] low and high resource scenarios range between 101 and 235 million metric tons (mmt) of GHG reductions, respectively,” the AGA study authors concluded. “Comparatively, the 10-year average annual gas emissions from the residential sector total 248 mmt.”
The wide range of projected costs indicates uncertainty in future hydrogen competitiveness, they acknowledged. The blending approach raises questions about upgrade costs, end-user equipment compatibility, and long-term economic efficiency compared to dedicated hydrogen infrastructure. GTI Energy also has not addressed the increase in cost burden to end-use customers through bill increases, as a result of investments in hydrogen pipelines.
GTI Energy also did not compare these costs against alternatives like targeted electrification. GTI Energy suggests that blending hydrogen into existing natural gas infrastructure could leverage existing assets. They present data showing that testing of over 80 heating equipment units with hydrogen/natural gas blends revealed no immediate malfunctions or significant adverse impacts.
According to TTP, there are about 1,200 heavy duty truck natural gas fueling stations in the United States, including 633 public and 346 others dispensing RNG.
“While nearly all the natural gas motor fuel dispensed in California is RNG, the majority of RNG used in America as motor fuel is actually dispensed outside of California,” Gage said.
For 2024, TTP estimates that 63% of RNG use occurred outside of California, up from 57% in 2023, and 73% of all stations that offer RNG are located outside of California. Additional states such as Illinois, New Jersey, New York, Michigan, Minnesota and Pennsylvania are looking to join California, New Mexico, Oregon and Washington in adopting clean fuel standard programs, further incentivizing this RNG buildout and the transition to cleaner transportation fuels, TTP notes.
In making his best sales pitch for RNG, Gage said, “NGVs fueled by RNG offer a more cost-effective, less disruptive yet still progressive compliance schedule for commercial fleets of all shapes and sizes. RNG-fueled trucks allow fleets the ability to affordably comply today on their road to achieving full carbon neutrality.”
Richard Nemec is a contributing editor who writes regularly for P&GJ. He can be reached at: rnemec@ca.rr.com.
Comments