How to Get Paid for Using Renewable Natural Gas
May 7, 2020
Whether you’re a refuse company, school district, transit authority, trucking fleet or an independent natural gas station owner, you could get paid to use renewable natural gas (RNG) as an alternative fuel. We know — it sounds too good to be true, but the opportunity is real.
Why you can get paid
As of today, 4 out of 10 Americans live in areas with unhealthy air. And because transportation is the largest emission generating sector, more and more market-based incentive programs are popping up to help reduce carbon intensity of transportation fuels. And guess what? You can obtain financial incentives from these programs for simply using renewable natural gas at your fueling station.
1. Renewable Fuel Standard (RFS)
This federal program was authorized under the Energy Policy Act of 2005 and expanded under the Energy Independence and Security Act of 2007. Each year the Environmental Protection Agency (EPA) sets volume requirements of renewable fuels that must be used within the fuel pool. Renewable identification numbers (RINs) are environmental credits (with financial value) to ensure program compliance.
2. Low Carbon Fuel Standard (LCFS)
This California-specific program was enacted in 2009 under the AB32 Scoping Plan to decrease the carbon intensity of California’s transportation fuel pool. This program analyzes lifecycle emissions of each fuel type and assigns each a carbon intensity (CI) score. Fuels that have CI scores lower than diesel generate LCFS credits, which also have financial value.
3. Oregon Clean Fuels Program (CFP)
In 2009 as part of HB 2186, Oregon adopted rules to reduce the carbon intensity of Oregon’s fuel pool, with the Clean Fuels Program coming to fruition in 2016. Credits are also offered under this program, with values set by the Department of Environmental Quality (DEQ).
How you actually get paid
But how do you actually obtain these credits? Well, if you own a natural gas fueling station in California or Oregon, renewable natural gas can be dispensed through your station either into other natural gas vehicles or that of your own fleet. But first, you’ll need to ensure you …
1. Secure renewable natural gas supply
You’ll need to find fuel providers (like us) who can supply RNG to your station. It’s important to note that the gas dispensed at your station may not be the same molecule produced at the renewable natural gas production facility (which is okay). The Environmental Protection Agency (EPA), California Air Resources Board (CARB) and Oregon Department of Environmental Quality (DEQ) certify distribution of renewable natural gas via displacement. Here’s an example:
Let’s say we produce renewable natural gas and inject it into the natural gas pipeline. If this volume matches an amount of compressed natural gas withdrawn by transportation, we can then certify a pathway for environmental credit generation — known as displacement. Displacement acknowledges that for every unit of RNG injected into the pipeline, an equal amount of fossil gas doesn’t have to be extracted from the earth.
2. Monetize environmental credits generated
After RNG is dispensed into transportation, environmental credits are generated and monetized by selling to a buyer. Renewable natural gas suppliers (like us) take on all the work of monetizing the credits generated at your station. They have relationships with obligated parties (petroleum importers, refiners and wholesalers) or trading companies seeking to purchase environmental credits. This process allows your station to be compensated by distributing renewable natural gas.
Sounds complex, but don’t sweat it! Vertically integrated suppliers like us are actively developing new renewable natural gas projects, seeking dispensing outlets like yours and then managing credit monetization to ensure your experience is seamless. All you need to do is use renewable natural gas to get paid.
How much can you get paid?
So we’ve made it to the last piece of the puzzle. How much are credits worth to you? Well, that’s where we come into play. We’ll ask you a few questions and can instantly let you know how much credit value you’re eligible for. Just reach out!