After several years of rapid expansion, the U.S. renewable natural gas (RNG) sector is now facing challenges. RNG – derived from organic waste such as landfills, agricultural byproducts, and wastewater – was once seen as a significant contributor to the clean energy transition. While it still has the potential to reduce emissions through existing infrastructure, political and policy uncertainty has hindered its progress. Nevertheless, ongoing technological advancements may offer the industry a way forward.
What Has Driven Renewable Natural Gas Growth and What Is Changing?
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Supportive Policies and Regulations
Federal and state incentives have traditionally fueled the growth of RNG. Programs such as the EPA’s Renewable Fuel Standard (RFS), which issues Renewable Identification Numbers (RINs), and California’s Low Carbon Fuel Standard (LCFS), which provides credits based on carbon intensity, have made RNG projects financially attractive. However, recent policy changes, delays in credit approvals, and uncertainties about the long-term future of these programs are starting to hinder new investments. While states like Oregon and Washington continue to offer support, the momentum remains inconsistent.
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Corporate and Utility Commitments
Companies in transportation, logistics, and utilities have incorporated RNG into their sustainability strategies, using it to power fleets and reduce carbon intensity in energy supplies. While corporations like Amazon, UPS, and Waste Management continue to invest in RNG, some are reassessing RNG’s role as they await clearer policy signals or consider electrification as an alternative.
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Technology and Infrastructure Advances
On the tech side, progress hasn’t slowed. Improved anaerobic digestion systems and gas upgrading methods have made RNG production more efficient and scalable. Investments in pipeline injection and gas cleanup technologies are also facilitating easier distribution of RNG through existing networks. This ongoing technological advancement is one of the few factors still pushing the industry forward.
Key Renewable Natural Gas Sectors and Where They Stand
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Transportation
The transportation sector has been RNG’s biggest customer, especially for heavy-duty trucks that use compressed or liquefied natural gas. However, this demand is softening as some fleets transition to electric alternatives. While RNG still plays a role in segments that are difficult to electrify, the outlook remains mixed.
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Utilities and Power Generation
Some gas utilities continue to blend RNG into their supplies, but the scale remains limited, and the economics are under pressure without robust policy support. A few power plants still use RNG to provide renewable, dispatchable electricity, although many are transitioning to alternative options.
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Agriculture and Waste Management
Farm-based digesters and landfill gas projects continue to generate RNG, especially in regions where subsidies or credits are still in effect. However, the initiation of new projects has decelerated due to shortages in feedstock and worries about long-term sustainability.
Challenges Facing Renewable Natural Gas Ahead
- Shrinking Incentives: As political winds shift, essential federal and state programs are encountering delays, changes, or reductions, rendering RNG projects riskier.
- High Capital Costs: Even with improved technology, RNG infrastructure is costly to construct. Without consistent incentives, justifying investment becomes more challenging.
- Infrastructure Barriers: Upgrading pipelines and maintaining gas quality continue to be expensive and complicated.
- Feedstock Reliability: RNG depends on a consistent supply of organic waste, which fluctuates by region and season.
A Future Still in Play
Although growth is slowing, the industry remains dynamic. Technological advancements are continually enhancing RNG production efficiency and scalability. Interest in carbon capture and synthetic methane is on the rise, both of which could improve RNG in future low-carbon energy systems.
What’s Needed to Continue the Expansion of the Renewable Natural Gas Sector
The growth of renewable natural gas is losing momentum due to policy uncertainty and shifting market dynamics. However, the story isn’t over. Technological innovation continues to create opportunities for the future – especially if favorable policy frameworks are reinstated. For now, RNG remains a promising tool, but its role in the energy transition will depend on whether the right mix of incentives, investment, and innovation can come together.
