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Third year of record growth for American biogas industry

Third year of record growth for American biogas industry
American Biogas Council (ABC) data indicates that 2023 was the third year of record growth across the American biogas industry, with nearly 100 new projects, excluding wastewater treatment plants (WWTPs), coming online in 2023 (graphic courtesy ABC).

Newly released data from the American Biogas Council (ABC) indicates that 2023 was the third year of record growth across the American biogas industry. Excluding wastewater treatment plants (WWTPs), nearly 100 new projects came online in 2023, representing US$1.8 billion in capital investments. ABC expects this growth to continue into 2024, with more than 100 new projects already projected to go into operation this year.

The growth of the United States biogas industry goes beyond increased domestic investments and renewable energy production. Strong industry growth correlated to strong methane emission reductions as well as new construction of recycling infrastructure.

Biogas systems recycle organic waste, capturing methane that would have been produced from that organic material had it not been recycled, and turning it into renewable energy to displace the use of fossil fuels for energy and fertilizer.

These systems are a value-packed solution to addressing the urgent domestic need to manage millions of tonnes of food, water, and animal waste.

Patrick Serfass, Executive Director of the American Biogas Council (ABC) seen here speaking at the UK AD & Biogas event in July 2016.
Patrick Serfass, Executive Director of the American Biogas Council (ABC) seen here speaking at the UK AD & Biogas event in July 2016.

At the same time, these systems prevent tonnes of carbon-related emissions from entering the air, keep nutrients from polluting waterways, create healthier soils with natural, non-fossil fuel-based fertilizers, and produce reliable, baseload or dispatchable, renewable energy.

After processing and upgrading into biomethane, biogas is most often used as a renewable substitute for natural gas – renewable natural gas (RNG) – for electricity, or for heat with a carbon intensity (CI) of 50 to 700 percent less than fossil fuels.

96 new projects came online

In 2023, 96 new biogas projects – a facility with at least one digester is counted as a single project – became operational in the US, pushing the total number of active US biogas projects, excluding the wastewater treatment sector, to 2,251, which represents US$39 billion in capital investment.

These new biogas projects produce 66,000 standard cubic feet per minute (SCFM) of biogas.

The wastewater treatment sector has approximately an additional 1,000 biogas-producing facilities.

This is an exciting time of growth for this renewable energy sector that is directly responsible for methane emission reductions. As the biogas industry expands, so, too, does our capacity to capture methane emissions that would otherwise be emitted from organic waste. We can simultaneously use that captured methane to displace other emissions from fossil fuels that are used for energy and making fertilizer. It’s a double win that often results in negative carbon emissions. Most other renewables can only get to a carbon intensity of net zero, said Patrick Serfass, Executive Director of ABC.

Landfill gas leads in investment dollars and output

Landfill gas (LFG), the natural byproduct of decomposing organic material in landfills continues to dominate in terms of both total investment and biogas output.

Instead of allowing LFG to escape into the air, it can be captured, converted, and used to displace fossil fuel emissions. The US currently has 566 LFG projects, including 23 new projects added in 2023.

This growth accounts for 57 percent of 2023 capital investments and a corresponding 67 percent of new biogas production capacity.

Significant gains in agriculture and food waste

While the growth of the landfill gas sector was voluminous last year in terms of both dollars and biogas production, 2023 saw only 4-5 percent growth in that sector.

By comparison, the agricultural sector experienced 13.4 percent growth, or nearly three times greater. Seventy new farm-based projects came online in 2023, contributing 21,000 SCFM of additional biogas output and resulting in capital investments exceeding US$700 million.

Capital invested in biogas projects 2023 by project type (graphic courtesy ABC).

Renewable natural gas (RNG) cluster projects contributed most to this growth and to lowering the cost per project.

Cluster projects are generally characterized by multiple farms with at least one anaerobic digester linked together by one common, central gas processing and conditioning facility to upgrade the raw biogas into RNG.

The use of more lagoon-style biogas systems (a covered, in-ground, lined pit), which are less expensive than the more commonly used engineered tanks, also contributed to lower per-project costs.

Meanwhile, growth also continues in the smaller food waste sector, on par with landfill sector growth.

Three new stand-alone food waste biogas projects became operational in 2023, adding an extra capacity of 996 SCFM, bringing the total nationwide to 107.

Ten more facilities are scheduled to launch in 2024.

Biogas power dominates but growth is in RNG

While biogas power projects account for 69 percent of all biogas produced in the United States, RNG projects represented 91 percent of all new projects that came online in 2023.

End use of biogas output and biogas project type (graphic courtesy ABC).

This mainly stems from policies such as the federal Renewable Fuel Standard (RFS) and the California Low Carbon Fuel Standard (LCFS), which promote using renewable fuels to replace fossil transportation fuels and eliminate emissions in natural gas vehicles (NGVs).

The inability of biogas projects to participate in the RFS when fueling electric vehicles continues to suppress growth in new power projects.

While impressive growth in the US biogas industry continues, only roughly 20 percent of possible projects across the country have been built.

Room for significant expansion

ABC counts at least 15,000 new systems that could be built—compared to 2,251 operational today—based on the millions of tonnes of organic material produced annually by humans and animals in the country.

As the biogas industry continues to expand, significant economic, environmental, and energy advantages are unlocked.

The collective impact encompasses several benefits, including carbon reduction, improved water quality, soil health enhancements, and reliable, renewable energy.

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