Betting on Biogas Growth in 2016

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This post originally appeared in Biomass Magazine

Last year witnessed significant achievements toward the transition to a lower-carbon economy. A historic agreement among over 180 countries to collectively reduce greenhouse gas emissions was reached in Paris in December. Also there, 20 countries announced the Mission Innovation initiative, which is aimed at doubling clean energy research and development in the next five years. Some clean energy technologies have become cost-competitive with incumbent technologies, and costs are projected to continue declining into the future. On the biogas front, 2015 was a good year, especially when compared to activity in previous years. Due to recently implemented initiatives and trends, I have high hopes that 2016 will be even better. 

In the summer of 2014, the USDA released the Biogas Opportunities Roadmap. The release of this roadmap marked the first time that federal agencies made a public commitment to coordinate biogas activities and outline objectives aimed at increasing the deployment of biogas systems across the U.S. At the end of 2015, the USDA published a progress report on roadmap objectives. According to the progress report, the USDA, U.S. DOE and U.S. EPA have all identified or implemented policy achievements to increase resource access for biogas projects. The progress report also identified technology achievements, a variety of private sector efforts, and identification of barriers to address in the future.   

Federal agency collaboration and coordination is critical because there is far more work to do to truly bring the biogas resource to scale. According to the 2014 Biogas Opportunities Roadmap, there are more than 2,000 U.S. sites that produce biogas, but there are at least an additional 11,000 sites that could support biogas systems. Although 2015 was a relatively good year for biogas, clearly there is more that we can and should be doing to fully take advantage of the resource potential. 

Biogas generation saw explosive growth in 2015 under the federal Renewable Fuel Standard (RFS). In July 2014, the EPA revised program rules to allow biogas generation from wastewater treatment facilities, landfills and agricultural producers to qualify as cellulosic fuel when raw biogas is cleaned and upgraded for use as a transportation fuel. From January to November, over 112 million gallons of cellulosic fuel were reported to the EPA, and 98 percent of the gallons were from renewable compressed and liquefied natural gas. 

The transportation fuel market offers an attractive biogas utilization pathway for producers. Under the RFS, program producers can sell biogas-based fuel credits for a premium—north of $1 per gallon. Eligible biogas producers are also able to stack RFS renewable fuel credits with compliance credits under the California Low Carbon Fuel Standard (LCFS) program. From the first quarter of 2011 through the third quarter of 2015, biogas credits used for compliance under the LCFS program have increased to nearly 10 percent of all LCFS credits. In 2016, I expect that we will continue to see growth in the use of biogas as a transportation fuel. As a renewable, low-carbon option, biogas will complement state and local strategies aimed at transitioning heavy-duty vehicle fleets to natural gas or electrification. 

The biogas industry has made steady progress in the past several years. The industry reached a turning point in 2015, and I am willing to bet that 2016 will be an even better year for biogas projects across the country.