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A company that tracks renewable energy transactions announced its first exchange involving its new thermal energy certificates.
Correction: Ben Gerber is M-RETS’ president and CEO. A previous version of this story misreported his title. The organization has also recently changed its name.
A company whose platform helps track renewable electricity transactions says it’s achieved an important milestone in developing a similar market for renewable natural gas and hydrogen.
M-RETS, formerly Midwest Renewable Energy Tracking System, announced its first transaction last month using a new “renewable thermal certificate” standard it created for thermal energy.
The Minneapolis company has been developing the system for several years after identifying a need for better verification and transparency around renewable natural gas transactions.
“The use of M-RETS’ thermal REC system offers producers and buyers of renewable natural gas a uniform method to track ownership of the environmental benefits related to RNG,” said Johannes Escudero, who leads the Coalition for Renewable Natural Gas.
Several states require gas and heating utilities to document thermal emissions reductions, but the industry hasn’t had a national, uniform standard to back up commitments by companies claiming benefits from biogas projects.
Renewable energy certificates, or RECs, solved that problem for wind, solar and other clean electricity sources decades ago. The certificates aim to capture projects’ environmental value, and organizations like M-RETS help track them and verify their integrity.
M-RETS’ thermal certificates work the same way for renewable natural gas, which can be captured from a variety of sources including landfills and livestock manure. The certificates allow a company to claim the emissions benefits of projects not directly connected to its operations.
Renewable natural gas is a fledgling but fast-growing industry. The Coalition For Renewable Natural Gas projects that the number of RNG plants could double this year from the 157 now in operation.
The demand is being driven in part as reducing transportation emissions grow as a climate priority. The Los Angeles County Metropolitan Transportation Authority last month announced a $47 million contract to buy RNG for transit buses. Amazon has ordered 1,000 truck engines powered by compressed natural gas that could incorporate RNG. Wisconsin-based U.S. Gain announced last fall a contract to supply RNG for a bus system in Oregon.
The fuel’s rise has led to growing opposition from environmental groups, many of which see the electrification of heating and transportation as a better path to reducing emissions. A report by Earthjustice and the Sierra Club says the gas industry, threatened by electrification, is pushing renewable gas as a way to continue investing in its infrastructure and prolong its influence.
The environmental groups’ report notes the high cost of renewable gas compared to fossil fuel gas and clean electricity, and it estimates that landfill, livestock and other sources of biogas will never be able to replace more than about 13% of current gas use. It also carries many of the same safety issues and methane leak risks that conventional gas does, the report says.
Those concerns have not thwarted interest in RNG even if the first M-RETS renewable thermal certificates issued carried a cloak of anonymity. The Fortune 50 corporation that used the certificates did not disclose its name. The energy commodities trading firm ATC Commodities, Inc. managed the transaction and Blue Source, LLC supplied the renewable natural gas. Blue Source has a portfolio of 45 renewable natural gas projects and dozens of other carbon reduction and sequestration initiatives.
Ben Gerber, M-RETS’ president and CEO, said before its thermal certificate product, no “tracked and transparent” structure existed for buyers to validate RNG. Without a standard way to quantify and validate clean thermal sources, potential clients “will not engage in contracts with producers because they’re too risky,” Gerber said.
“It is a premium product, but it becomes much more approachable when you’re able to quantify the carbonization benefits from a scope one,” Gerber said.
Argonne National Laboratory reported that RNG has a net carbon-negative lifecycle when produced by anaerobic digestion of food waste or dairy and hog manure. Decomposing organic waste creates methane that, after being treated, can be added to natural gas pipelines.
M-RETS’ thermal certificates should help accelerate production and the adoption of renewable natural gas, said Blaine Collison, executive director of the Renewable Thermal Collaborative. He recently spoke to two corporations who may join his organization and both mentioned that they might participate in the thermal certificate market.
“The notion of a thermal REC is important for all of that,” Collison said. “It’s a very significant thing for companies to have the ability to go out and get low carbon, renewable thermal solutions. I expect to see more of it.”
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