Biogas as Transportation Fuel: A Strong Start
In my last Biomass Magazine column, I wrote about the enormous potential of biogas in meeting our transportation needs and as a component of a diverse fuel mix. New projects and data are demonstrating that biogas as a transportation fuel is no longer a vision, but a market reality. Under both the federal renewable fuel standard 2 (RFS2) and California’s Low Carbon Fuel Standard, biogas is an emerging contributor to a diverse, low-carbon fuel mix.While progress is encouraging, there is still a large amount of untapped potential, leaving plenty of room for expansion and opportunity for innovative project models.
Starting with the RFS2, the first several months of 2013 have been an impressive growth period for biogas transportation projects. According to U.S. EPA data, biogas has generated nearly 2.3 million gallons of advanced biofuels in the first five months. Nearly 70 percent of those gallons were produced in March, April and May. The total advanced biofuel pool was 194 million gallons, and while the 2.3 million gallons of biogas fuel represents a small portion, steady growth in March, April and May is definitely a positive sign. Furthermore, the majority of advanced biofuel gallons is attributed to imports of Brazilian sugarcane ethanol, whereas biogas gallons are supplied by domestic projects, representing an important economic development for many U.S. states. Previous analysis concludes the potential for using biogas as advanced biofuel is much larger than current use, demonstrating there is room for significant growth.
In California, under the LCFS program, biogas is already helping to achieve program goals and is projected to make an even larger contribution in the future. In 2009, California established a policy to reduce the carbon intensity of the transportation fuel mix by 10 percent by 2020. According to the most recent program status review by the Institute of Transportation Studies at the University of California-Davis, California displaced approximately 1.06 billion gallons of gasoline and 45 million gasoline gallon equivalents (gge) of diesel with lower-carbon fuels in 2011 and 2012. During that same period, the program recorded a net excess of 1.285 million metric tons of carbon dioxide equivalent LCFS credits. The net excess credits represent nearly half of the credit obligation needed to meet the 2013 standard (a system of credits and deficits is used to ensure compliance with annual carbon reduction requirements).
Of the net excess credits, 12 percent were generated from conventional and biobased compressed natural gas or liquefied natural gas. Using biogas as a transportation fuel is even more attractive under the California LCFS program because of the lower-carbon intensity of biogas as compared to gasoline or diesel, which provides regulated parties the ability to generate a greater amount of LCFS credits.
So what is the future role of biogas under the LCFS? It could be significant, according to a study commissioned by California Electric Transportation Coalition and conducted by ICF International. The study examined three different scenarios for program compliance until 2020. Since the LCFS was first established, unanticipated changes in the energy market are having a larger impact on program implementation. Most notably, the increasing domestic supply of natural gas and low prices are making it economically attractive for heavy-duty diesel vehicles to convert to run on natural gas and/or purchase vehicles designed to run on natural gas. The report predicts that greater natural gas use in California’s vehicle market will pave the way for increased use of biogas.
Under each of the three scenarios, biogas is anticipated to make up approximately 10 percent of the natural gas fuel pool. Depending on the scenario, biogas could supply as little as 7 million gge beginning in 2015 to as much as 111 million gge in 2020. Biogas is currently only a small sliver of total low-carbon fuel volumes produced in California, but given that different biogas pathways have been scored with some of the lowest carbon intensities, it is an attractive compliance option for regulated parties. Additional market development for natural gas transportation options could pave the way for increased biogas use.
While biogas as a transportation fuel is still in the early stages of market adoption, the future is very bright for this lower-carbon option. Both the RFS2 and California’s LCFS are paving the way for a diversified fuel portfolio, and the potential of biogas as an emerging and valued component of that mix is becoming apparent. Early results are very encouraging. Stay tuned!
Author: Amanda Bilek
Energy Policy Specialist, Great Plains Institute.