国产麻豆

Those in the solid waste industry should expect continued demand for RNG as fossil fuel companies鈥� obligations to purchase RINs increases. Several factors offer the opportunity for solid waste companies to get in on the push for renewable energy and to create a sustainable society.
By Patrick Serfass

Twenty years ago, out of approximately 3,000 active landfills in the U.S., only 150 landfills were collecting the landfill gas (LFG) they produced for beneficial use. And nearly all of them used their landfill gas for onsite power generation. Boy, have things changed. A decade later, the number of LFG facilities had tripled, and the past decade has added yet another 120 plants, capturing greenhouse gases and generating revenue to keep the cost of disposal low.

Today, according to the American Biogas Council鈥檚 project database, 579 U.S. landfills beneficially use their LFG, with 23 of them new in 2023, the most gas utilization systems added in a single year since 2014. These operations capture approximately 905,000 standard cubic feet per minute (scfm) of raw biogas today. This equates to about 32 billion kilowatt hours of electricity output or more than 950,000 gasoline gallon equivalents (GGE) and takes 14.4 million tons of CO2 equivalent emissions and uses them, in the form of methane, to offset fossil fuel use鈥攎ore good news for the climate, the economy, and for energy security.

A Shift in Market Dynamics
Yet, according to American Biogas Council members, we ain鈥檛 seen nothin鈥� yet! Developers expect dozens more landfills to open gas utilization systems in 2025. In addition to the growth in the number of participating landfills, we have also seen a significant shift in how they use the LFG. In 2013, 92 percent of LFG facilities fueled power generation. Today, that share has shrunk to 80 percent, while about 20 percent of LFG facilities upgrade their raw gas to renewable natural gas (RNG). Nearly all recently opened plants use their LFG to make RNG, which directly displaces conventional natural gas since it is an identical, but renewable substitute.

Today, those new LFG to RNG projects most often use their gas to fuel vehicles. While more capital intensive than power generation projects, purifying the LFG further to inject into the pipeline and fuel vehicles can also generate more revenue. The U.S. EPA estimates that LFG projects need a minimum LFG flow of 800 to 1,000 scfm to make pipeline injection economical and an additional 50 to 600 scfm if it needs to be pressurized additionally for an onsite or local vehicle fueling station. By contrast, smaller LFG projects are still best suited for generation of electricity, given today鈥檚 market pricing.

These market dynamics raise the question of how many of the 80 percent power projects, 464 actual facilities, might convert to RNG production to increase their revenue? Of the 464 operational LFG to power projects, 283 currently meet the EPA鈥檚 rough criteria for a pipeline injection-worthy project, and of those, 169 would feasibly support a fueling station if the location were suitable.

Project Development
Regarding the development of new gas utilization projects on U.S. landfills, the EPA鈥檚 Landfill Methane Outreach Program (LMOP)1 has currently classified 741 landfills as potential new LFG sites suitable for development, with 28 under construction, 97 more planned, 616 marked as either 鈥渃andidates鈥� or 鈥渇uture potential.鈥� This group represents roughly 1.4 million scfm of additional biogas available for capture from these potential projects. Three key factors currently drive interest in new landfill project development.

#1: Revenue Opportunity
For landfill owners, investing in LFG utilization projects, power, or RNG, creates an obvious income opportunity. Currently, landfills without gas utilization flare all their gas. The new income comes from both the sale of the gas molecules and renewable energy credits or 鈥渆nvironmental attributes.鈥� Participation in different programs, like state renewable portfolio standards or the federal renewable fuel standard, allow the project owner to create these saleable credits.

WM, as a prime example of the players in this market, expects to bring in more than $500 million in earnings annually by the end of 2026, according to the company鈥檚 2023 earnings report.2

#2: The Renewable Fuel Standard (RFS), California Low Carbon Fuel Standard (LCFS) and Renewable Portfolio Standards (RPS)
The credits for these programs, respectively called RINs, carbon credits, and RECs, rise and fall according to market dynamics influenced, in part, by government bodies, and transactions in the marketplace. Different government bodies create the demand with policy, and that demand creates value for the credits and, in turn, an opportunity for renewable fuel and renewable energy developers to finance new projects.
Currently, state governments have not created a demand as strong for electricity, using RPS programs, as the ones EPA and the State of California have created for renewable fuels. That generally means that RINs for RNG made from LFG, and carbon credits for RNG from LFG, are both more valuable than RECs for renewable electricity from LFG. The higher credit value allows for an acceptable five to 10-year return on investment and in some cases, as little as three years,3 driving development.

#3: Corporate Interest in Voluntarily Purchasing RNG Over Conventional Gas
Customer and investor interest in lowering corporate carbon footprints currently also drives LFG project development in what is called the 鈥渧oluntary market.鈥� Today, upwards of 400 large U.S.-based companies have committed to net-zero emissions targets, with many having set ambitious target cuts for 2030 or sooner. This means they will need to increase their use of renewables鈥攁nd fast.4

While voluntarily buying renewable electricity to replace dirtier grid electricity is generally simple in many states, fewer options exist to buy RNG to replace the use of, and emissions from, conventional gas. Companies leading the way, from L鈥檕real to Astra Zeneca, have voluntarily purchased RNG to cut their use of fossil fuels, bringing a new demand for RNG that goes beyond the RFS and LCFS markets above. Most RNG offtake agreements involve publicly traded companies to meet investor standards.

What鈥檚 Next
What is next for landfill gas鈥� future? All the factors discussed here will not stagnate, they will strengthen. Those in the solid waste industry should expect continued demand for RNG as fossil fuel companies鈥� obligations to purchase RINs increases. The public will intensify demands that waste be managed responsibly, and companies鈥� own deadlines for decarbonizing will loom closer.

All of these factors offer the opportunity for solid waste companies to get in on the push for renewable energy and the push to create a sustainable society, making it an exciting time to be in the waste business. | WA

Patrick Serfass is Executive Director of the American Biogas Council, the voice of the U.S. biogas industry. Patrick has led the American Biogas Council since he helped create it in 2010. The American Biogas Council now represents more than 400 organizations and 5,200 professionals and is dedicated to maximizing carbon reduction and economic growth using biogas systems. Patrick can be reached at [email protected] or visit .

Notes
www.epa.gov/lmop
https://investors.wm.com/static-files/1331b248-ec1e-4fc3-bfa5-12dc003e4bf0
https://investors.wm.com/static-files/1331b248-ec1e-4fc3-bfa5-12dc003e4bf0
www.mckinsey.com/capabilities/sustainability/our-insights/navigating-americas-net-zero-frontier-a-guide-for-business-leaders