The State of Renewable Natural Gas

Posted on Thursday, February 17, 2022

The renewable natural gas (RNG) market is a rapidly growing and regionally diverse market that has the potential to grow seven times 2020 levels by 2030, and 27 times 2020 levels by 2050 based on sustained transport sector growth and incremental growth from utilities and commercial and industrial customers.1

With a focus on corporate decarbonization targets to address greenhouse gas emissions (GHGs), carbon intensity levels and air quality concerns, many companies are turning to RNG as a solution to instant emission savings and environmental, social, and governance (ESG) achievement. When used as transportation fuel, RNG helps organizations reduce both scope 1 and scope 3 emissions. Nationally, 53% all natural gas vehicles make use of RNG, while this number is up to 98% in California.5

RNG development is not only fueled by stakeholders wanting to see more aggressive action to reduce GHGs in line with international goals of constraining global warming but also by legislature focused on promoting clean energy and reducing climate emissions.

Gas utilities are ramping up RNG programs, as an increasing number of states attempt to reduce reliance on fossil fuels. Twenty-four states, plus the District of Columbia and have adopted specific greenhouse gas reduction targets to address climate change7, with the California Senate Bill 1440 standing out as the largest demand for RNG.

On September 23, 2018, then-California Gov. Jerry Brown signed Senate Bill 1440. This bill authorizes a state procurement program for renewable natural gas.2 This involves mandatory biomethane procurement for California’s four large gas Investor Owned Utilities (IOUs), Southern California Gas Company (SoCalGas), Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), and Southwest Gas Corporation (SWG), to assist the state in meeting the short-lived climate pollutant (SLCP) emissions reduction goals.3 By 2030, the Joint Utilities would be required to procure 72.8 billion cubic feet (Bcf) of biomethane annually, which is equivalent to approximately 12.3% of total annual statewide gas IOU core customer consumption in 2020.

In 2020, 60 Bcf of renewable natural gas was produced from the four main sources – landfills, anaerobic digesters at water resource recovery facilities, livestock farms and stand-alone organic waste management operations4.

As the demand increases exponentially, can the RNG supply meet the demand? According to the RNG Coalition, the RNG industry is hard at work. The number of operational RNG facilities more than doubled from 108 to 249 between 2019 and 2021 and the number of RNG facilities under construction have tripled from 42 in December 2019 to 155 in December 2021.5


Kinetrex Energy, a Kinder Morgan company, produces renewable natural gas by upgrading the methane emitted from landfills to meet natural gas pipeline quality specifications. RNG is waste-derived, clean energy that is both a complementary and necessary part of a global climate change solution. Landfill-to-RNG produces higher volumes than other RNG technologies at a lower cost per Metric Million British Thermal Unit (MMBtu), so it can meet the needs of both the transportation and voluntary market. RNG sold into the transportation market creates renewable identification numbers (RINs) which can be marketed across the renewable fuel value chain, satisfying the needs of the Renewable Volume Obligations that parties need to comply with in the Renewable Fuel Standards.6

As a Kinder Morgan company, Kinetrex has access to the largest natural gas transmission network in the United States, with 70,000 miles of natural gas pipelines, connecting to key demand centers and moving approximately 40% of U.S. gas consumption and exports.

With a unique, fully-integrated platform, Kinetrex is the only company in the marketplace that has landfill gas rights, develops RNG projects, maintains the end-use-customer relationships and monetizes RINs. Partnering with Kinetrex enables organizations to reduce their carbon footprint by pursuing higher environmental, social, and governance performance and to assist in meeting governmental requirements.


  2. State of California Public Utilities Commission – DECISION IMPLEMENTING SENATE BILL 1440 BIOMETHANE PROCUREMENT PROGRAM – Agenda ID #20241
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