In the United States (US), Chevron U.S.A. Inc., a subsidiary of Chevron Corporation (Chevron), one of the world’s largest integrated energy companies, and California Bioenergy LLC (CalBio) have announced a joint investment in their second holding company to produce and market dairy biomethane as a renewable natural gas (RNG) transportation fuel in California (CA).
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The holding company, CalBioGas Hilmar LLC, has secured initial funding from Chevron to build infrastructure for dairy biomethane projects in California’s Merced County.
Develop a new RNG cluster
Manure storage on dairy farms results in the release of methane, a highly potent greenhouse gas (GHG).
CalBio brings technology and operational experience to help dairy farmers build digesters and methane capture projects to convert this methane to beneficial use as renewable natural gas (RNG), which is considered carbon negative on a lifecycle basis under California’s Low Carbon Fuel Standard (LCFS).
Per the agreement, Chevron will provide additional funding for as many as seven digesters and one central upgrading facility across a cluster of dairy farms in Merced County.
The cluster of digesters has been awarded California Department of Food and Agriculture (CDFA) grants, which must be augmented with additional capital to complete the projects.
When complete – expected in 2023 – Chevron will take 100 percent of the RNG produced to market in the California vehicle fuels market.
This project brings together support from many groups, including seven California Dairy farmers, who are national leaders in milk and cheese production; Chevron, one of California’s largest energy companies; and grant funding from the California Department of Food and Agriculture. The strong support from these partners will help California with its emission reduction targets. These projects are also benefiting the local community through job creation and protecting local air and water quality, said Neil Black, President of CalBio.
Expand RNG offering
As part of its lower carbon objectives, Chevron is complementing the strength of its traditional products business with new offerings that help customers support a lower carbon future.
Carbon-negative RNG produced from dairy biomethane is an essential part of its portfolio of solutions and CalBioGas Hilmar represents the second partnership with CalBio.
We are excited to continue our partnership with CalBio and work with local communities and farmers to develop lower-carbon fuel solutions. The investment underscores our commitment to produce 40 000 MMBTU/D of RNG by 2030 and grow the lower carbon businesses that we believe will be a bigger part of the future, said Andy Walz, President of Americas Fuels & Lubricants for Chevron.