Renewable fuel standards : how will regulations affect the production and future of biogas?

Canada and USA renewable energy regulations

• British Columbia – Renewable Natural Gas program, carbon tax, Clean Fuel Standard

• Alberta – regulation on carbon prices, localized banning organic material in landfills, credit program for bioenergy producers

• Ontario – Guaranteed feed-in tariffs for electricity, cap and trade system, initiatives to address climate change that can support renewable natural gas, discussion addressing organic waste strategy

• Québec – organic materials ban from landfills by 2022, incentives for municipal capital, carbon tax, use of renewable natural gas project by project

• Nova Scotia – organic material banned from landfills, renewable energy purchase program produced in the Community (pending)

• United States – Renewable Fuel Standard Program (RFS), Low Carbon Fuel Standard Program in California – renewable natural gas markets have been established in competitive states (California) – Canada’s largest landfill (in Quebec) sells renewable natural gas in California since 2015

British Columbia is not the only province with a clean fuel standard. The policy was created in California, and Oregon has also created its own clean fuel standard.

Canada: Federal Clean Fuel Standard to cut emissions

In addition to requirements regarding renewable fuels, British Columbia adopted a low carbon fuel standard in 2008.

Announced on November 25, 2016, by the Government of Canada, the Clean Fuel Standard aims to reduce greenhouse gas emissions by increasing the use of a broad range of lower carbon fuels and alternative energy sources and technologies, such as renewable natural gas. By 2030, the use of clean fuels in Canada could triple with the clean fuel standard. In addition, 1.2 million electric vehicles would be on the road.

The Clean Fuel Standard targets not only transportation but also those used in buildings and industry, like natural gas.

The standard will include a market-based approach, such as a crediting and trading system.

30 megatonnes of annual reductions in GHG emissions by 2030

According to a report by Clean Energy Canada, the Clean Fuel Standard would reduce carbon pollution by 30 million tonnes of CO2 by 2030. It equals to taking more than seven million cars off the road.

For the transportation sector, the target is 10% reduction in carbon intensity by 2030 from 2015 levels.

The Clean Fuel Standard would create jobs and economic growth

The standard could create up to 31,000 jobs for skilled workers to build, operate and supply new clean facilities. With this standard, the Canadian biofuel industry would grow almost twice.

Several existing federal and provincial policies are designed to help Canadians save. With a clean fuel standard, Canadian households will save up to $ 82 / month by 2030.

What comes next

A draft regulation is expected in 2018, publication of the final regulation in 2019 and then implementation.

United States: Renewable Fuel Standard (RFS)

Created under the Energy Policy Act of 2005, the US Renewable Fuel Standard requires increasing renewable fuel volume requirements under the Renewable Fuel Standard (RFS) program.

Annual volumetric requirements must be met in the four renewable fuel categories. It reinforces the use of renewable fuels and reduces lifecycle GHG emission

• Biomass-based diesel must meet a 50% lifecycle GHG reduction
• Cellulosic biofuel (cellulose, hemicellulose, or lignin) must meet a 60% lifecycle GHG reduction
• Advanced biofuel (renewable biomass) must meet a 50% GHG reduction
• Renewable (or conventional) fuel (ethanol derived from corn starch) must meet a 20% lifecycle GHG reduction

Recently, renewable natural gas has been added into the category of cellulosic biofuels.

The US Renewable Fuels Standard requires the creation of credits for renewable fuel volumes and also provides for a credit trading system.

“The RFS requires renewable fuel to be blended into transportation fuel in increasing amounts each year, escalating to 36 billion gallons by 2022.” (Canadian Department of Natural Resources and Energy)

EPA released Renewable Fuel Standard Volume Obligations for 2018

On November 30, 2017 – The U.S. Environmental Protection Agency (EPA) released the final renewable volume obligations (RVOs) for 2018 under the Renewable Fuel Standard (RFS), and biomass-based diesel for 2019.

The required volumes are set at 288 million gallons for cellulosic biofuel, 4.29 billion gallons for advanced biofuel and 19.29 for renewable fuel. The biomass-based diesel target is set for 2.1 in 2019.

“While the 288 million gallons of cellulosic biofuel EPA is calling for in 2018 is a small increase from the volume proposed earlier this year, it is disappointing the 2018 volume represents a decrease from the 2017 cellulosic biofuel level of 311 million gallons. We firmly believe the technology exists to increase cellulosic biofuel targets.” (Brian Jennings, CEO of ACE)

European Union: Union Fuel Quality Directive

The European Union has adopted a standard to reduce the lifecycle GHG emissions from fuels by 10% by 2020. The Fuel Quality Directive works in tandem with the EU Renewable Energy Directive which ensures at least 10% of transport biofuels by 2020. Fuel suppliers must verify that all sustainability criteria for raw materials used in biofuel production have been met.

How will these regulations affect the production and future of biogas?

Biogas production in the United States and Canada has not yet taken off like in Europe. In Europe, there are more than 10,000 biogas-producing operations compared to about 2,000 in the United States, according to the American Biogas Council. Currently, in Canada, there is a potential of over 13,500 news biogas plants in North America and a place for over 2,000 retrofit to upgrade the existing plants.

Clean fuel standards encourage the biogas development by requiring producers and importers to reduce GHG emissions. In addition, standards create new infrastructures, generate thousands of jobs to help citizens cleanly fuel our economy and promote national investments.

As the EPA’s final rule itself states, “biogas is playing the leading role in the production of next generation cellulosic fuels.” The reduction of 78 million gallons in the volume of cellulosic biofuel under the Renewable Fuels Standard could have a significant impact on the biogas industry.

Anaerobic digestion in the United States could grow, as new projects signal — like in Philadelphia and in Utah. However, “a sharp decrease in the amount of cellulosic fuel required under the RFS could hurt future growth in that sector” (WASTE DIVE).

Maureen Walsh, director of federal policy for the American Biogas Council, told she didn’t have an estimate on just how much the 78 million gallon reduction would cost biogas producers.

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Sources

• Government of Canada: Clean fuel standard: discussion paper
• EPA : EPA Finalizes RFS Volumes for 2018 and Biomass Based Diesel Volumes for 2019
• Clean Energy Canada: What a Clean Fuel Standard Can Do for Canada
• Comité sénatorial permanent de l’énergie, de l’environnement et des ressources naturelles: Valeur du biogaz et transition du Canada vers une économie à faibles émissions de carbone (in French only)
• RNG Coalition: Statement from the Coalition for Renewable Natural Gas Regarding EPA Release of Final 2018 Renewable Fuel Standard Volume Obligations
• Clean Energy: Statement From Andrew J. Littlefair, President and CEO, Clean Energy Fuels Corp. on EPA’s Final RFS RVO Rule
• Waste Dive: Biogas producers urge EPA to reconsider RFS volume requirements
• American Biogas Council: American Biogas Council Statement on EPA’s Final 2018 Fuel Targets