BP advocates three policy measures to accelerate RNG adoption in US
SUMMARY
With supportive government policies, BP believes that the full potential of biogas and RNG can be unlocked. [Image: BP]
By Shardul SharmaBP, a global energy major, on May 8 outlined three policy recommendations aimed at fostering the expansion of domestic production and use of renewable natural gas (RNG) in the US. With supportive government policies, BP believes that the full potential of biogas and RNG can be unlocked, contributing to a more sustainable and resilient energy system.
“Federal lawmakers and regulators have taken important steps in that direction, but their work is not complete, and it requires fixes in some cases,” BP said.
Firstly, BP calls for the rectification of the US Treasury Department's proposed biogas Investment Tax Credit (ITC) guidance. The current framework poses challenges for RNG producers, particularly those involved in landfill-to-RNG projects, by potentially excluding critical components of the production process from qualifying for tax incentives. BP has submitted a comment letter urging the department to revise the guidelines to ensure fair treatment and incentivise investment in RNG projects.
Secondly, BP advocates for the establishment of a new pathway within the federal Renewable Fuel Standard (RFS) to incentivise the use of RNG in electric vehicle (EV) charging. By introducing tradeable credits known as electric Renewable Identification Numbers (eRINs), the Environmental Protection Agency would establish a way to provide credits when biogas is used to generate electricity for electric vehicles.
Lastly, BP highlights the need for flexibility in the application of tax credits for low-carbon hydrogen production. While the Inflation Reduction Act offers incentives for hydrogen producers utilising RNG, current guidance limits eligibility based on the direct flow of RNG molecules to production facilities. BP proposes a more flexible accounting system that recognises RNG injected into existing natural gas pipelines, thereby incentivising greater RNG demand and facilitating the decarbonisation of hydrogen production processes.
According to BP, biogas can be a powerful tool to help ensure energy security and reduce greenhouse gas emissions. Captured from sources such as landfills, farms and wastewater treatment plants, it can be used for electricity generation, heat, and transportation fuel.
BP-owned Archaea Energy is a leading US producer of RNG, producing 11 trillion British thermal units of RNG last year from landfills and farms across 32 states. The business is aiming to significantly drive up its production, with plans to bring online more than a dozen additional plants in the next two years.
Archaea Energy recently unveiled its largest original Archaea Modular Design (AMD) RNG plant to date in Shawnee, Kansas, situated just outside of Kansas City. The Shawnee facility, three times the size of Archaea's inaugural AMD plant in Medora, Indiana, operational since October 2023, has a capacity to process 9,600 ft³/minute of landfill gas into RNG.
