RNG Policies and Incentives that Relate to Environmental and Sustainability Goals
While incentives and policies that promote the use of renewable natural gas for thermal applications by end-users are currently limited, some local and state voluntary programs are beginning to emerge. Additionally, the demand for renewable natural gas is increasing as companies strive to meet their corporate sustainability goals, including reducing their carbon footprint and greenhouse gas emissions associated with their operations.
At least 20 US states have initiated greenhouse gas targets across the broad economic sector, setting long-term reduction goals, and implementing policies that are designed to achieve these emission reduction targets. Once these policies are rolled out, they are applicable to all industrial sectors across that state, including local transportation and distribution companies. Consequently, these companies are switching to low-carbon feedstocks in an effort to reduce their emissions as they strive to meet their corporate sustainability goals.
In the same manner that an electricity consumer can voluntarily opt to pay to partake in a green power program offered by their local electric utility, consumers living in Pennsylvania can now opt to purchase voluntary Renewable Natural Gas Credits offered by Pennsylvaniaâ€™s Energy Co-op through a partnership formed with local gas utility partner, PECO, which has been in effect since 2016. In 2017, Vermont gas initiated a similar program, followed by California, Minnesota, and New York.
Early in 2019, Californiaâ€™s SoCalGas announced plans to replace 5% of natural gas supply sourced from fossil fuels with renewable natural gas by 2022, increasing to 20%by 2030 as it strives to be the â€œcleanest natural gas utility in North America.â€ To achieve this goal, SoCalGas filed an application with the Californian Public Utilities Commission to give residential and small-scale commercial/industrial consumers the option of purchasing renewable natural gas. Consumers who opt to partake in the program are able to choose the amount (in US dollars) they are prepared to contribute or a percentage of their total gas consumption (commercial/industrial consumers), which will then be included as a line item on their monthly utility bill reflecting the additional cost.
The Midwest Renewable Energy Tracking System (M-RETS) is an online energy tracking system that allows electricity generators, utilities, reporting agencies, etc to track renewable energy credits generated under the renewable portfolio standard and other environmental credit programs. In 2019, M-RETS started to adapt its software programs to accommodate the voluntary programs for thermal energy credits that are emerging as companies strive to meet their corporate sustainability goals and emission reduction commitments. At the beginning of 2020, M-RETS launched its online platform for tracking renewable thermal certificates.
Many companies and local governments are taking stock of their greenhouse gas emissions and are including these results into their corporate sustainability strategies for reducing their carbon emissions, with some ultimately striving to become carbon neutral (having a carbon footprint of zero) over the long-term. But in order to reduce emissions, companies need to have a clear understanding of what their emissions are, and the source of these emissions. One standard that helps companies determine their carbon footprint is The Greenhouse Gas Protocolâ€™s Corporate Standard which categorizes GHG emissions into three areas:
- Scope 1 Emissions â€” greenhouse gas emissions emitted directly by company-owned or controlled sources.
- Scope 2 Emissions â€” greenhouse gas emissions emitted to generate electricity purchased and used by the company.
- Scope 3 Emissions â€” greenhouse gas emissions emitted indirectly as a result of activities conducted by the company, but where the company doesnâ€™t own or control the source of these emissions.