Familiar corporate names like Cummins, Freightliner and Waste Management have joined forces with dozens of less-familiar public companies and startups to form what some might call a new U.S. industry. Thousands of commercial trucks powered by compressed natural gas (CNG) are on the roads nationwide, many of them filling up at dedicated fueling stations offering a compressed form of renewable natural gas (RNG), a cellulosic biofuel typically sourced from landfills and dairy farms. In today’s RBN blog, the third and final in our series on the D3 Renewable Identification Number (RIN), we show how this young industry could emerge as a commercial success for cellulosic biofuels, although political and regulatory risk remains.
As we explained in Part 1 of this series, the Renewable Fuels Standard (RFS) in 2007 set mandates for generating transportation fuels from cellulosic biomass — non-food crops and waste biomass like corn stalks, corncobs, straw, wood, wood byproducts, methane emitted from landfills and animal manure —and other categories of biomass. The focus then was on wood chips and the vision was that, by 2024, 16 billion gallons per year of liquid cellulosic biofuel would be made in process units resembling small refineries. That dream never came close to reality, however, and in Part 2 we told the story of Kior Inc., which spent $600 million on the wood-chips vision before going bankrupt, having generated only $2 million in revenue.
Today, the much more moderate, seemingly achievable goal is that, by 2027, 100 Bcf/year (0.27 Bcf/d) of RNG will be captured from landfills, sewage treatment plants and dairy farm manure piles, piped through existing natural gas distribution systems and a growing network of stations to fuel 20,000 long-haul, heavy-duty trucks. That RNG would substitute for about 300 million gallons per year (MMgal/year; about 20 Mb/d) of diesel, a tiny fraction (roughly 0.5%) of total diesel consumption but a significant step forward for cellulosic biofuels.
(To gain a detailed understanding of the refined products and biofuels markets, and RBN’s perspective on their prospects and challenges, check out the Future of Fuels report by RBN’s Refined Fuels Analytics (RFA) practice.)
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