Burgeoning Biomethane

FROM THE FEBRUARY ISSUE: Verbio has plans to further strengthen the already-expanding renewable natural gas market in the U.S., having purchased DuPont’s cellulosic ethanol plant.
By Matt Thompson | January 21, 2019

A transformation is underway in Iowa. Last year, Verbio North America Corp., the U.S. subsidiary of German bioenergy producer Verbio Vereinigte BioEnergie AG, purchased DuPont Cellulosic Ethanol LLC in Nevada, Iowa. The company has plans to produce renewable natural gas (RNG) at the site, but first will need to make some changes to the facility. “We will utilize the land, infrastructure, electric substation, control room and some other equipment and structures, but this represents only a small portion of the overall facility,” says Rand Dueweke, chief financial officer of Verbio North America. “To produce RNG, we need to complete a substantial new construction project—building multiple anaerobic digestion tanks and installing biogas upgrading equipment.” Dueweke adds that the company hopes to begin production at the plant in the spring of 2020.

Verbio has plans to expand that transformation beyond Iowa, not just by commissioning more RNG plants, but helping to change the diesel fuel market. “We believe that RNG will ultimately replace diesel fuel in most heavy transportation applications, if the supply is available and the cost competitive,” Dueweke says. Verbio has four plants in Europe that produce RNG as well as ethanol and biodiesel. Dueweke says the company is the only large-scale producer of all three products in Europe.

Verbio expects to eventually commission new plants in the U.S. every six months, and is currently exploring options in western and central Kansas. Those projects are in their initial stages and sites have not yet been finalized, Dueweke says, adding it’s too early to speculate on timelines.

“Other than Kansas and Iowa, it would be early to speculate on any other sites,” he says. “However, the corn and wheat belts span about 12 states, so any of those are targets. … Generally, we are not looking at former grain ethanol plants; these are valued too high by the market for ethanol production.”

Dueweke says the DuPont site was selected because of its location and infrastructure, not its former use as a cellulosic ethanol plant. “The DuPont site was attractive because of access to feedstock, water, electricity, highway, rail and natural gas infrastructure. We can also use some of the buildings and equipment on-site, but less than you would expect. The facility could have been originally constructed for a very different purpose and we still may have been just as interested in the site and infrastructure.”

While the ethanol and RNG industries have similarities, they are less like competitors than they are partners, says Marcus Gillette, director of public affairs for the Coalition for Renewable Natural Gas (RNG Coalition). “I would say that the fuels are complements to one another. Growth and stability and the market for developing more advanced and cellulosic biofuels from all feedstocks is of equivalent interest to both markets.”

Brooke Coleman, executive director of the Advanced Biofuels Business Council, agrees. “There is plenty of room under the RFS tent for renewable gas. The objective is to reduce oil dependence and provide more sustainable and renewable transportation fuels. The RFS will continue to succeed, and we will continue to ward off assaults on the policy, if we stick together in the biofuels sector.”

Geoff Cooper, president and CEO of the Renewable Fuels Association, says, “We see RNG as being complementary to ethanol and other renewable fuels. We don’t see those technologies as really competing, especially when you look at how RNG is used in transportation. It’s typically in the heavy-duty fleets with heavy-duty vehicles, not necessarily in vehicles that would be gasoline vehicles or using ethanol. … We think the tent is big enough for lots of different kinds of renewable fuels. We do work together with the RNG folks and will continue to do that to grow the market for all renewables.”

The Process
RNG is produced by improving biomethane to natural gas standards. Because RNG is produced with organic feedstocks, it is a cleaner alternative to traditional natural gas.

The first step in producing RNG is capturing biogas. This is typically methane from landfills, livestock manure, wastewater treatment plants, or other facilities that produce the gas from organic material. The biogas is cleaned, removing carbon dioxide and impurities, leaving only methane. The result is known as biomethane, which is then upgraded to pipeline-quality RNG, and can be transported through existing natural gas pipelines. RNG is a direct substitute for natural gas.

“Renewable natural gas as a drop-in fuel is utilizing natural gas infrastructure that is already in place to distribute our sustainable fuel across state lines, and even across the country, in certain circumstances,” Gillette says.

According to Dueweke, most RNG is “currently being produced at relatively small scale from landfill gas or via anaerobic digestion of dairy and swine manure.” Verbio’s Iowa plant, however, will use crop residue, such as corn stover and wheat straw, as its feedstock. Verbio’s technology for this method is “proven at industrial scale and presents an opportunity to achieve production at much larger scale and lower cost than what is currently happening in the market, given the relative abundance of feedstock supply throughout the Midwest,” Dueweke says.

Using crop residue as a feedstock isn’t common now, but it is a growing trend, Gillette says. “We’re seeing an increased interest and increased development in renewable natural gas from anaerobic digesters using feedstocks that include all types of agricultural waste, from dairy manure to swine waste, to leftover crop residues.”

The largest source of feedstock for RNG is landfills, Gillette says. “Because landfills of a certain size are regulated to have biogas capture systems, it effectively acts as a large anaerobic digester already in place. So the economics of using upgraded biogas from landfills as feedstock for renewable natural gas often times makes the most economic sense.”

An Industry on the Grow
While Dueweke says the RNG industry is still in its infancy, Gillette says it has experienced tremendous growth in recent years, thanks in part to the Renewable Fuel Standard. “Since 2011, with the RFS framework in place, the RNG industry has developed over 45 new production facilities, capable of producing high-BTU gas used in transportation fuel applications, with over 50 projects currently under construction or in substantial stages of development.” According to the RNG Coalition, 41 plants were built in North America between 1982 and 2014. Today, there are 89.

With 50-plus new projects in progress, the RNG industry is poised to add $500 million to $3.5 billion in investments to the local and regional economies, depending on their locations and the feedstocks they use. In addition, Gillette says, “Production of RNG results in as many, or more, temporary and permanent jobs than any other renewable energy—up to 173 temporary and permanent positions per project.

“The desire of various markets, as well as large- and medium-sized companies alike, to reduce their environmental and production footprint” also play a role in the industry’s growth, Gillette says.
Most of the RNG produced in North America is used domestically. A small percentage is exported to Europe, but “upwards of 95, and probably 99 percent of the renewable natural gas produced in North America is being used here,” Gillette says.

The Market
RNG D3 RINs have outpaced those for cellulosic ethanol since 2014. According to the U.S. Environmental Protection Agency, in 2017, RNG accounted for more than 240 million D3 RINs, compared to cellulosic ethanol’s 10 million. RNG accounts for more than 95 percent of the fuel used to meet the RFS’s cellulosic requirement.

Like natural gas from geologic sources, RNG is used to power home appliances and for heating. But it’s also used to power natural gas vehicles. Many heavy-duty truck fleets in larger urban areas have been converted to run on compressed natural gas (CNG) or liquefied natural gas (LNG). Gillette says Los Angeles County Metropolitan Transit Authority (LA Metro) uses RNG in all its natural gas-fueled vehicles, and Dallas/Fort Worth International Airport has adopted the fuel for its vehicles, too.

UPS Inc. also uses natural gas vehicles in its fleet and has since 2008. The company says it used 15 million gallon equivalents of RNG in 2017, making it the largest consumer of the alternative fuel in the transportation industry.

Gillette says some companies have made commitments to help with its production. “We’re also seeing increased interest in RNG from the development side from major corporations,” he says. “L’Oreal USA made a commitment [in early 2018]. Smithfield Foods has made a very large commitment to using their hog waste to produce renewable energy.”

California is a major market for natural gas, as it implements incentives for using vehicles that help reduce emissions, including those that run on natural gas. In addition, RNG can help fleet owners comply with the state’s Low Carbon Fuel Standard. Producers can also generate LCFS credits, similar to the RINs generated under the RFS.

“California is also a more progressive state in terms of mitigating emissions and having a history of needing to reduce harmful air quality,” Gillette says. “The state also has had a more robust desire to reduce methane emissions and has policies and regulations working to do that, which the RNG industry has been supportive of.”

And, just like ethanol, driving further adoption of RNG is important. “The more targets and factors that we have in place as a society and in different metro markets to increase the rate of conversion from dirtier fossil fuels to alternative fuels, the better off we’ll be, from an air-quality standpoint and from a climate-change perspective,” Gillette says.

Author: Matt Thompson
Associate Editor,
Ethanol Producer Magazine