The author of this piece was a winner in the Rockefeller Institute of Government’s Future Leaders in Policy Competition. The competition challenged students from SUNY’s campuses to think about the policy implications of their research. They pitched policy proposals, based on their expertise, to New York State policymakers. The winners were invited to publish a blog based on their proposal.
Climate change is the defining challenge of our time. New York has taken bold steps to combat climate change by passing progressive policies, such as the Climate Leadership and Community Protection Act (CLCPA). Signed into law in July 2019, the CLCPA outlines goals to improve New York’s climate change portfolio, including three major milestones:
- reduce carbon emissions by 85 percent from 1990 levels;
- transition to 100 percent zero-emissions electricity by 2040; and
- generate 70 percent of the state’s electricity from renewables by 2030.
To meet these goals, New York has developed programs to incentivize investments in solar, wind, and other renewable technologies, improvements in the energy efficiency of buildings, and development of a clean energy economy. Achieving the CLPCA’s carbon emissions goals will require a wide range of policy tools, including investments in emerging technologies.
Renewable natural gas (RNG) is one of many technologies available to help New York meet these ambitious goals. This blog provides an overview of RNG and discusses how it transforms organic waste into transportation fuel. Data from the author’s previous research is presented on the organic waste generated in New York and the potential for converting the waste into biogas or RNG. California has recently made investments in the renewable fuel industries through the development of a natural gas fleet. The author presents information on the environmental and economic impacts of these initiatives. The author then concludes by studying the regulations and financial incentive programs implemented in other states designed to support the expansion of renewable fuels.
Overview of Renewable Natural Gas and Biogas
RNG is produced from biogas, a byproduct of the anaerobic digestion of organic materials like agricultural-, human-, and industrially-derived waste. The composition of biogas ranges from 25-40 percent carbon and 60-75 percent methane, and minor amounts of contaminants, including hydrogen sulfide and nitrogen.
RNG is produced through the upgrading of biogas, which involves removing carbon and contaminants, leaving behind approximately 95 percent methane. RNG can be used interchangeably with fossil natural gas in the existing pipeline infrastructure for applications like heating, electricity, and transportation fuel because both are primarily made up of methane. Therefore, transitioning to RNG would not require significant investment in updating or building a new distribution network. Figure 1 below summarizes the RNG production process and applications.
FIGURE 1. RNG Production Process and Utilization
The conversion of organic waste into RNG could reduce greenhouse gas (GHG) emissions in two ways. First, organic materials that are breaking down have the potential to emit methane—a gas potentially 25 times more effective at trapping heat in the atmosphere than carbon dioxide. In those cases, converting the methane that would naturally occur from the decay of organic material into RNG prevents the direct release of the potent GHG into the atmosphere and may assist with climate change mitigation. Secondly, the benefits can be even greater when RNG is used as a transportation fuel. By offsetting the demand for conventional fossil-fuel based gasoline or diesel to fuel vehicles, GHG emissions are further reduced. While the use of RNG still results in emissions, the net impact has the potential to be negative when compared to allowing the decay of the organic waste.
New York’s RNG Potential
By setting targets for renewable energy use and reductions in GHG emissions, the CLCPA created a market for renewable and alternative power sources, including potential sources such as RNG. In its agricultural-, human-, and industrial-derived waste sectors, New York has abundant organic resources that can be used to create an RNG supply that meets CLCPA standards.
New York has over 30,000 farms and is a leading producer of agricultural products like milk, cottage cheese, yogurt, and crops such as corn and sorghum. The state’s robust agricultural sector represents an opportunity to produce biogas, and subsequently, RNG. Currently, only 30 farms in New York produce biogas (primarily from manure). Crops and crop residues (i.e., straw and corn stover) supplement manure in the production process as bulking agents. In a process known as anaerobic digestion, the agricultural-derived waste decomposes without oxygen in a closed tank (a “digester”). The resulting biogas can be used to generate on-site heat and electricity for the farm. Any remaining biogas that is not used to produce energy is burned or flared. Less than 1 percent of the state’s agricultural-derived waste is utilized to generate biogas, and none of the New York farms currently upgrade the biogas to RNG.
Human-derived waste includes wastewater sludge, municipal solid waste landfills, food waste, and yard waste. Wastewater sludge is produced at wastewater treatment plants (WWTPs). New York has over 1,200 WWTPs that generate a total of 22,746 tons of wastewater sludge per day. Only a small fraction of the sludge contains organic material. Less than one-tenth of WWTPs (116) anaerobically decompose the sludge in a digester, producing biogas. However, none produce RNG. The biogas is mainly utilized to fuel the facilities and for the combined heat and power generation of the WWTPs. It is financially feasible for WWTPs to convert their sludge into biogas since sludge disposal costs represent 50 percent of the operating costs of a WWTP.
Municipal solid waste (MSW) consists of everyday items such as food waste, yard waste, metals, plastics, wood, etc. In 2013, New York generated close to 13 million tons of MSW. Of all the state’s MSW, 42 percent is landfilled in New York; the remaining 58 percent is exported out of the state, recycled, or incinerated. In 2013, 46 percent of New York State’s landfilled MSW contained organic material, the equivalent of 2.5 million tons. As of 2017, New York has 27 active MSW landfills, of which all are located upstate. The organic material decomposes anaerobically in the landfill and produces biogas captured only after the landfill is closed or a portion of the landfill, known as a cell, is closed for additional waste disposal. In this case, an anaerobic digester is not needed as the closed cell services this function. The collected biogas can be upgraded to produce RNG or flared. Only two New York landfills currently produce RNG: Seneca Meadows’ landfill in Seneca Falls and Fresh Kills’ landfill in Staten Island. Seneca Meadows’ landfill is still in operation and produces biogas for electricity and 70,000 cubic meters of RNG per year for vehicle fuel. Fresh Kills’ landfill closed in 2001 but continues to produce 40 million cubic meters of RNG per year.
Of the 13 million tons of MSW, 4 million tons is food waste. About half of this food waste is landfilled in New York and the remainder is either incinerated or exported. There is the potential to capture energy from food waste and produce RNG if the incinerated or exported waste were to be source-separated for anaerobic digestion instead. Currently, five sites in New York utilize food waste as the primary input to produce biogas through anaerobic digestion.
Approximately 1 million tons of yard waste are separated for composting in New York. As a result, New York does not utilize yard waste as a primary resource for biogas or RNG production. The state can take advantage of this resource by diverting it to anaerobic digestion instead of composting.
Paper mills generate sludge that can be utilized to produce biogas, and subsequently, RNG. New York has two paper mills: International Papers in Ticonderoga and Finch Paper in Glen Falls. The two mills generate approximately 2.3 billion liters of sludge per year. Currently, the sludge is not utilized for biogas or RNG production.
Table 1 shows New York’s current and potential biogas and RNG production levels. Currently, 40 percent and 3 percent of the state’s potential biogas and RNG production from human- and industrial-derived wastes are utilized, respectively.
TABLE 1. New York’s Current and Potential Biogas and RNG Production from Agricultural-, Human-, and Industrial-Derived Wastes (Year)
*Includes crops and crop residues as bulking agents.
SOURCE: Stephanie Taboada, et al., “Quantifying the Potential Renewable Natural Gas to Support a Reformed Energy Landscape: Estimates for New York State,” Energies 14, 3834 (2021).
Figure 2 shows a breakdown of the resources that can be used to produce RNG. Energy crop production is the most important. Energy crops are those like corn and sorghum, grown exclusively to produce fuel. They account for about 60 percent of the potential RNG production, followed by landfilled MSW and yard waste. Together, these three resources make up 80 percent of the potential RNG production. The remaining resources equal roughly the same RNG generation as landfilled MSW. Unfortunately, management of the organic fraction of MSW (OFMSW) using landfills is not ideal due to unintended methane emissions that outweigh the benefits of RNG production. Diversion of the OFMSW to an anaerobic digester would result in greater RNG production and no unintended methane emissions.
FIGURE 2. New York’s Potential RNG Production by Source
Table 1 summarizes the potential and current quantity of biogas and RNG production produced from the following sectors: agriculture-, human-, and industrial-derived wastes. Overall, New York collects about 10 percent of its potential biogas production. A small fraction of the biogas is upgraded to RNG. If all the resources previously mentioned were diverted to produce RNG, the current RNG production could be 100 times greater. The potential RNG production can make up approximately 5 percent of New York’s fossil natural gas demand (i.e., 40 billion cubic meters per year), resulting in an overall GHG emission reduction of 2 percent. Transportation fuel use of fossil natural gas represents 2.5 percent of New York State’s gas demand. Based on this analysis, there is enough RNG to replace fossil natural gas as a transportation fuel and double its supply.
The Environmental and Economic Impact of RNG: The Case of California’s Natural Gas Fleet
California is currently the leader of the RNG industry in the United States. The state implemented the Low Carbon Fuel Standard (LCFS) in 2011 to reduce the state’s GHG emissions. The LCFS requires a 20 percent reduction in the average carbon intensity of California’s transportation fuel by 2030 and establishes annual targets for several renewable fuels. Carbon intensity is defined as the amount of GHG emissions associated with the production, transportation, and consumption of transportation fuels. Under the LCFS, importers and refiners must purchase a specified amount of renewable fuel, such as RNG, to blend with their fossil fuels. The alternative is to buy LCFS credits from renewable fuel producers (one LCFS credit equals one metric ton of carbon dioxide reduced). LCFS credits are produced when transportation fuels have lower carbon intensities than targets established by the California Air Resources Board, which manages and enforces the LCFS. Thus, the LCFS credit market incentivizes the production and purchase of RNG-based transportation fuel, creating a viable market.
California is a national leader in building a natural gas vehicle fleet. In 2019, 29 percent of United States natural gas transportation fuel was consumed in California, and 77.4 percent was RNG. A positive impact of this standard is that California’s natural gas vehicle fleet achieved carbon negative emissions for the first time in 2020. It is estimated that by 2024, California-produced RNG for transportation will generate 3.4 million tons of GHG reductions annually.
The shift toward renewable transportation fuels has resulted in the emergence of an RNG industry in the state. It is estimated that by 2024, California will host 160 production facilities producing 119 million diesel gallon equivalents, enough to fuel over 13,731 natural gas trucks annually. These facilities will generate nearly $1 billion in capital investment by 2024, with 77 percent coming from the private sector. A separate report forecasted that the state’s transitioning of heavy-duty trucks to RNG would generate $14.3 billion in economic activity and support 134,000 permanent jobs by 2030.
Each site that produces RNG can create up to 173 direct and indirect jobs. A California study showed that these jobs provide an income of $68,960, which is more than twice the median income per individual living in California. In addition, RNG production profits can help diversify agriculturally-intensive regions by creating new revenue streams. Producers have potential customers in multiple sectors, including utility companies, refineries, and transportation companies.
RNG is particularly beneficial for sites with shared ownership of the organic material and a transportation fleet because the fleet will have access to a long-term fuel source. Additionally, these sites can establish long-term and mid-term supply contracts with potential customers at a more stable price than fossil fuels.
Despite the potential economic development and climate change mitigation realized by RNG, it would likely require significant capital investment for existing facilities to utilize RNG, costing anywhere from $10-$100 million in initial capital investment. Several factors such as the equipment needed, the equipment already in place, the biogas composition, and the site’s accessibility to the existing pipeline grid can impact the initial capital cost. For example, sites like WWTPs and landfills may already produce and capture biogas. Thus the cost of producing RNG is primarily limited to upgrading the biogas. Other sites have the organic materials to produce biogas but require the construction of anaerobic digesters in addition to biogas upgrading, increasing costs. Biogas upgrading requires a blower to move the biogas through the process, a compressor to regulate the pressure, a hydrogen sulfide removal unit, a gas separator to remove carbon dioxide, and a nitrogen removal unit. Depending on the biogas composition, some of the removal units may not be needed, lowering the capital investment cost. Similarly, if a site is located close to natural gas pipelines, interconnection costs can be less. Typically, interconnection costs range between $1.5-$3 million per mile.
To assist with capital investments, financial incentives to produce RNG are widely available in California. For example, in addition to the LCFS, California also established the Biomethane Monetary Incentive program, which is designed to reduce pipeline construction costs by funding half of the cost of the pipeline by up to $3 million. When several sites cluster together, however, the incentive goes up to $5 million. The program is set to expire by the end of 2021.
Policies to Support Renewable Fuels
New York can take advantage of the environmental and economic benefits of RNG by passing legislation similar to California’s LCFS. Quantifying the current and potential amount of biogas and RNG produced from New York’s organic resources is necessary to assist policymakers with creating this legislation.
Fuel standards set carbon intensity targets for states creating a demand for lower-emissions fuels. While California was the first to introduce low carbon fuel standards, Washington and Oregon have passed similar LCFS legislation. Washington’s Clean Fuel Standard will announce the state’s rules in 2021 and adopt them by the end of 2022. Washington’s fuel standard will require the carbon intensity of transportation fuels to be below 2017 levels by 2038. Oregon established the Clean Fuels Program in 2016 and requires the carbon intensity of transportation fuels to be 10 percent below 2015 levels by 2025. States like New Jersey and Minnesota had success in passing more limited legislation. New Jersey, for example, requires large food waste generators to separate and recycle food waste. In the bill, anaerobic digestion is considered a method of recycling. Minnesota passed the Natural Gas Innovation Act, which permits fossil natural gas utilities to add alternative fuels, such as RNG, in their distribution systems. New Jersey and Missouri have proposed other legislation supporting RNG production but are pending approval.
Like California, states have also developed financial incentive programs to support the development of an RNG industry. For example, Oregon (SB 98) and Nevada (SB 154) reimburse utility companies for constructing RNG infrastructure such as pipelines and RNG upgrading facilities.
Another approach to incentivize RNG production is through tax exemptions. For example, Washington passed HB 2580 in 2018 and it provides tax exemptions to companies purchasing RNG equipment, such as anaerobic digesters.
Like California, New York is considering passing a similar clean fuel standard (S2962A/A862A) to incentivize RNG production and utilization. In the meantime, New York can take advantage of the RNG market on the west coast of the United States by capturing LCFS credits.
RNG is one of several renewable energy sources that can assist New York in achieving its climate goals. The CLCPA’s goal of 70 percent renewable electricity will reduce annual GHG emissions by roughly 13 percent. Producing and substituting RNG for fossil natural gas can lead to an additional 2 percent annual reduction in GHG emissions. This analysis pinpoints high-yielding RNG resources that decisionmakers can focus on to maximize production, such as OFMSW, yard waste, and crops. It provides a steppingstone for decisionmakers to implement policies like LCFS that incentivize the production and utilization of RNG so New York State can diversify its energy portfolio and meet its progressive climate targets.
ABOUT THE AUTHOR
Stephanie Taboada is a chemical engineering Ph.D. candidate at Stony Brook University and her research focus is on advancing renewable natural gas (RNG) production and utilization in New York State by providing the following: a comprehensive statewide resource assessment, optimization of an emerging pathway to produce RNG known as power to gas (P2G), and creation of a pathway to produce valuable feedstocks, such as synthesis gas, from RNG. Stephanie has been researching RNG for several years, and her work has revealed it has considerable potential because it is a carbon-neutral energy source that can be interchanged with fossil natural gas in the existing pipeline grid and applications since both have the same main component, methane. In addition, P2G has an added benefit because it utilizes “green” hydrogen as a feedstock, which can be blended into the existing gas pipeline or substitute fossil natural gas if not used for RNG production. Stephanie is passionate about bringing RNG and “green” hydrogen online in New York State, but robust statewide policies must first be implemented to incentivize RNG production, demand, and research.