Fuel Production:

Biogas

The United States accounted for 30% of the global market for methane-rich biogas in 2011, and is expected to capture 28% market share in 2012.

Biogas is a gaseous fuel that is produced through the anaerobic digestion of organic matter. It occurs naturally in landfills (producing landfill gas, or LFG), or it can be produced in digesters, creating anaerobic digester gas (ADG), for example, at wastewater treatment plants or elsewhere using animal waste or food waste. Global sales of methane-rich biogas amounted to 9.1 billion cubic feet (BCF) in 2011, and are expected to grow 22% in 2012, to 11.1 BCF. Revenue from sales of biogas via natural gas grid injection, bio-compressed natural gas (CNG), or bio-liquefied natural gas (LNG) totaled $27.4 million and $33.6 million in 2011 and 2012, respectively. In 2011, 2.2 billion cubic feet per year (BCFY) of new biogas capture and upgrading capacity was added globally; an estimated 2 BCFY is projected for 2012. Revenues from these capital investments reached an estimated $19.4 million in 2011, and are expected to reach $14.4 million in 2012.

Raw biogas must be upgraded (or purified) before it can be injected into natural gas pipelines or used as a transportation fuel. Thus far, countries like Germany and Sweden have been early adopters of biogas as a transportation fuel.

The United States accounted for 30% of the global market for methane-rich biogas in 2011, and is expected to capture 28% market share in 2012. Biogas producers are increasingly turning to transportation fuel markets over power applications for near-term revenue. That’s because renewable identification number (RIN) credits under the Renewable Fuel Standard (RFS) have become more attractive as the value of renewable energy credits (RECs) from the sale of power has declined in recent years. Truck and municipal fleets that follow pre-defined routes and return to a centralized fueling station are best suited for using biogas as a transportation fuel. This model is common among garbage trucks that operate around a landfill or municipal solid waste transfer station. Waste haulers such as Waste Management have been early adopters of this business model in the United States.