2030 California renewable natural gas outlook: Resource assessment, market opportunities, and environmental performance

Despite the relatively small size of the natural gas fleet in California, renewable natural gas (RNG) has grown to become one of the largest methods of compliance within California’s Low-Carbon Fuel Standard (LCFS). This paper provides an assessment of RNG’s potential as a low-carbon fuel in California in 2030, considering its resource availability, production cost, and climate performance.

The analysis finds that cost-viable volumes of RNG could displace, at most, 8.9% of heavy-duty fuel demand in California in 2030. For RNG that is injected into the natural gas pipeline network, cost-viable volumes could displace 5.2% of statewide gas demand. In addition, slightly less than half of California’s maximum RNG resource potential can be achieved in 2030 with the current set of incentives. Changing credit calculations in the LCFS to account for the state’s methane reduction policies would reduce the potential of cost-viable RNG produced outside California but would not significantly affect the economics of in-state RNG production.

The analysis also finds that a natural gas tractor-trailer will generate, at most, approximately 11% lifetime GHG savings relative to a diesel tractor-trailer, even when assuming California achieves its maximum in-state RNG potential. In contrast, a battery-electric tractor-trailer generates approximately 57% GHG savings over its lifetime compared to a diesel tractor-trailer, based on the projected change in California’s electricity grid intensity over time.

Supplemental material
Case studies: The project economics of producing renewable natural gas or electricity and the impact of policy incentives

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