How the US Can Maximize the Potential of Biogas Capture and Production
Capturing biogas from municipal waste systems can reduce methane emissions and create renewable natural gas. Policymakers, municipalities, and other key stakeholders need to take action to make it a reality in the US.
Reducing methane emissions, which account for about 16 percent of global emissions and are nearly thirty times as potent as CO2 at trapping heat in the atmosphere, is increasingly important to reaching net-zero goals. Yet compared to peers in Europe, US policymakers, municipalities, and utilities are missing a significant opportunity to both scale back these emissions and create a clean fuel source in the process.
That’s because the US has not fully realized the potential of biogas capture from municipal waste systems like landfills and wastewater treatment, the former of which represent the third-largest source of human-related methane emissions in the US.
According to the International Energy Administration, biogas potential worldwide in 2040 will be more than 50 percent larger than today, around 40 percent of which would cost less than $10/MMBtu. The opportunity is vast. While the landscape is complex, the time is right to transform more US landfills from drains into engines for the environment and economy.
Captured biogas reduces emissions and can be transformed into renewable natural gas (RNG) for use in heating, electric generation, and vehicle fuel (Figure 1).
If fully realized, biogas systems could produce 103 trillion kilowatt hours of electricity per year and enact the emissions reduction equivalent of removing 117 million passenger vehicles from the road.
The US has thus far left ample opportunity on the table: there are over 400 biogas recovery projects from landfills and nearly 4,000 from wastewater treatment sites that could be operationalized. In what follows, we’ll discuss why the US is lagging behind—and how it can catch up.
Lessons from Europe
Europe is the largest producer of biogas today—particularly Germany, which is home to two-thirds of the region’s biogas plant capacity. US stakeholders can learn from their success.
The region’s biogas supremacy is the result of two major factors. First, Europe has a long history of policy support for these initiatives, including the EU Landfill Directive from 1999, which established goals for diversion of biodegradable municipal waste from landfills, as well as active government promotion of biogas production in countries such as Germany, Denmark, France, Italy, and the Netherlands.
The closest comparison in the US is California’s SB 1383; passed in 2016 and entered into force in 2022, it is one of the first regulations in the country mandating that organic materials be collected, recovered, and recycled into new end-products like compost and biofuels. Organic materials like those addressed by this legislation are a significant feedstock for biogas production.
The second major factor is economic feasibility. Simply put, placing waste in landfills is much cheaper in the US due to the available space. The EU also has higher prices for renewable electricity driven by feed-in tariffs—and US natural gas is cheaper, meaning utilities and municipalities are less incentivized to spend the money to capture biogas and process it into RNG.
With that said, even in the US, landfills remain the most economically accessible biogas production sources and are closest to competing in market price with geologically extracted methane. Landfills currently account for 90 percent of biogas production in the US, despite having a relatively small number of individual projects (Figure 2).
Emerging Opportunities
A number of incentives in the US should empower municipalities, utilities, and private landfill owners to ramp up biogas production. For instance:
- New incentives for RNG. Rising mandates under the Renewable Fuel Standard, a federal program that requires transportation fuel sold in the country to contain a minimum volume of renewable fuels, will increase demand for RNG—as shown by companies recently announcing that they have expanded their RNG business lines. California’s Low Carbon Fuel Standard is having a similar effect.
- Inflation Reduction Act (IRA) tax credits will apply to “qualified biogas properties” that begin construction before 2025.
- State resources for landfill gas energy projects are available, including those from state agencies and private foundations.
- The Environmental Protection Agency’s (EPA) Landfill Methane Outreach Program (LMOP) forms partnerships with communities, landfill owners and operators, utilities, power marketers, states, project developers, Tribes, and nonprofit organizations to overcome barriers to project development. Total estimated emission reductions from LMOP-assisted projects in 2022 were approximately equivalent to CO2 emissions from over 3.5 million homes’ energy use for one year.
- Improved monitoring of methane emissions, as outlined in the 2022 US Methane Emissions Reduction Action Plan, could provide access to better data that could eventually improve the quality of investment decisions with respect to the environmental benefits associated with RNG investments and biogas capture.
- The cost of US production of natural gas may move closer to parity with RNG from waste sources as the EPA’s efforts to curb methane emissions from natural gas production and voluntary corporate programs of certified natural gas gain momentum. Though raising market prices of natural gas overall is not the most desirable outcome, this would put the production of methane on more equal climate-impact footing, no matter the source.
Shaping the Future of the Biogas Industry
Municipalities, private landfill owners, waste management servicers, and other key stakeholders invested in the potential of biogas capture and production have an opportunity to shape biogas policy through:
- Actively participating in the formulation of public comments on evolving laws and regulations. Besides local and state agencies that manage landfills and wastewater facilities, the EPA and now the US Treasury and Internal Revenue Service are involved in formulating definitions, policies, and rules about waste-related emissions and incentive programs. The topic of energy decarbonization is under active construction as a federal voter issue, and thus open to ongoing actions by US Congress. While companies that already engage with policymakers and regulators on biogas policy might consider seeking an independent opinion or analysis, entities currently outside of this process can receive assistance from knowledgeable aggregators of data and analysis, such as BRG Energy & Climate, on formulating their inputs into key decisions.
- Tracking the rapidly advancing compliance requirements and available assistance from the EPA and other federal and state programs via voluntary forums and participating in cooperative initiatives like the LMOP, which provides a range of tools to exchange knowledge, evaluate projects, and seek resources. Participation in this forum appears heavily weighted toward project developers rather than owners. While it can be difficult—especially for municipalities—to devote resources to such a program, participating can improve the understanding and relationship with the regulator where significant issues, such as data collection, emissions measurement methodologies, or access to incentive programs, are concerned.
Municipalities, private landfill owners, waste management servicers, and other key stakeholders invested in the potential of biogas capture and production have an opportunity to shape biogas policy.