Abstract:

Despite the relatively small size of the natural gas fleet in California, renewable natural gas (RNG) has grown to become one of the largest methods of compliance within California’s Low-Carbon Fuel Standard (LCFS). This paper provides an assessment of RNG’s potential as a low-carbon fuel in California in 2030, considering its resource availability, production cost, and climate performance.The analysis finds that cost-viable volumes of RNG could displace, at most, 8.9% of heavy-duty fuel demand in California in 2030. For RNG that is injected into the natural gas pipeline network, cost-viable volumes could displace 5.2% of statewide gas demand. In addition, slightly less than half of California’s maximum RNG resource potential can be achieved in 2030 with the current set of incentives. Changing credit calculations in the LCFS to account for the state’s methane reduction policies would reduce the potential of cost-viable RNG produced outside California but would not significantly affect the economics of in-state RNG production.