Expanded biogas-renewable natural gas sector could play vital role in achieving Canada’s climate goals, says new report

Growing Canada’s biogas-renewable natural gas sector could significantly reduce greenhouse gas emissions and play an important part in achieving the nation’s 2030 and 2050 climate goals, according to a new report by the Canadian Biogas Association (CBA).

Given the right supportive policy mix, biogas and renewable natural gas can cut GHG emissions by 26.7 million tonnes (Mt) by 2030, says Jennifer Green, executive director of the CBA.

That is a substantial contribution to the 66-Mt gap between Canada’s 2030 emissions-reduction target and what the country’s existing climate plans are able to deliver, she told Research Money.

“Biogas and renewable natural gas also can make a significant contribution to Canada’s net-zero emissions goal by 2050,” Green said.

An expanded sector could reduce GHG emissions by up to 40.2 Mt by 2050, based on an energy-economy modelling forecast prepared by Navius Research for the CBA’s report, released on March 22.

Biogas and renewable natural gas (RNG) also can play an instrumental role in achieving Canada’s related climate target to reduce methane emissions, according to the report.

“With swift action in the waste and agricultural sectors, biogas and RNG could cut 642,000 tonnes of methane,” or 16.5 percent of Canada’s methane emissions, Green said.

When added to the federal government’s planned methane emissions cuts in the oil and gas industry, biogas and RNG could help Canada achieve a 44.5-percent reduction in total methane emissions by 2030, surpassing the nation’s target to reduce methane emissions by 30 percent below 2020 levels by 2030, she said.

Methane is a powerful greenhouse gas with a global warming effect 80 times stronger than carbon dioxide over the short term. In Canada, methane accounts for about 13 percent of all GHG emissions.

“One thing the modelling makes clear is that current policies are not sufficient for capturing biogas and RNG’s potential contribution to Canada’s climate goals," the report says. The authors found that current policies can deliver only 21 percent of the GHG reductions available through biogas and RNG compared with an optimal policy scenario.

“In the absence of any strong policy signals or markets, there really isn’t a solid bankability for projects to be able to move the sector forward,” Green said.

Optimal policy mix recommended

The CBA’s report examined five different potential policy scenarios for opportunities, using biogas and RNG, in emissions reduction, clean energy potential and economic impact.

As an optimal policy mix for achieving maximum benefits across all three areas, the report recommended implementing a nationwide renewable natural gas mandate, combined with a carbon offsets system that provides carbon credits for methane destruction and utilization in landfills and agriculture.

British Columbia, for example, has a mandate requiring 15 percent minimum renewable gas in natural gas distribution networks by 2030.

About half of all Canadian households use natural gas for heating, along with many industrial sectors, says Joe Mazza, vice-president, energy supply and development at utility company FortisBC.

“There’s a lot of demand for gaseous fuel,” Mazza said in an interview. “Moving these millions of homes and businesses to being carbon-neutral with renewable gas would be transformational.”

The optimum policy regime could be achieved by implementing a single federal RNG mandate, acting as a backstop, or through multiple new provincial mandates in those provinces without RNG mandates, according to the CBA’s report.

Carbon offset systems also have a provincial precedent, said the report. For example, Alberta’s Emission Offset System allows carbon credits to be generated by biogas and RNG projects, and sold to large industrial GHG emitters regulated under the province’s Technology Innovation and Emissions Reduction legislation.

In addition, the CBA’s report recommended that the federal Clean Fuel Standard, scheduled to come into effect this year, needs to allow suppliers to meet up to 10 percent of their liquid fuel improvements through gaseous fuels to achieve the maximum emissions reductions through biogas and RNG.

Green said the optimal policy regime could deliver up to 19,900 full-time-equivalent jobs, almost $2.2 billion in private investment (mostly from development in the agricultural sector) and more than $5 billion in annual GDP by 2030.

Canada tapping only 14 percent of its biogas-RNG potential

Biogas and RNG technologies both utilize organic waste from food production, farming, landfill and wastewater treatment.

In farm biogas operations, for example, manure and other organic waste is converted to methane gas in large sealed tanks–called anaerobic (without oxygen) digesters–by bacteria breaking down the material. In RNG operations, methane gas produced naturally by landfills and wastewater treatment (in sewage sludge and manufacturing wastewater treatment processes) is collected.

Many biogas projects use the methane as fuel to generate electricity which is sold into the electrical grid. RNG projects typically purify the methane and feed this renewable gas into a nearby natural gas pipeline for use downstream by customers.

There are currently 279 biogas-RNG projects across the country, mostly in Ontario, B.C. and Quebec, that are preventing more than 8 Mt of greenhouse gas emissions from reaching the atmosphere every year, according to the CBA.

However, this represents only about 14 percent of Canada’s easily accessible biogas-RNG potential, according to a 2020 report commissioned by Natural Resources Canada.

“We could grow that output by about another eight times,” Green said. “We definitely have a much longer runway for growth, and we have the ability to tap into feedstocks that are readily available to be able to achieve that growth.”

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