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Oregon's Clean Fuels Program and Biogas

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Last month Oregon passed a Clean Fuels Program, that credits renewable fuels for their greenhouse gas reductions. This presentation discusses the potential value of those credits to Oregon biogas projects, and the potential future for Washington to follow Oregon and California's lead and create its own Low Carbon Fuel Standard.

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Oregon's Clean Fuels Program and Biogas

  1. 1. Oregon’s Clean Fuels Program and Biogas Peter Weisberg April 14th, 2015 Biocycle in Portland, OR
  2. 2. Environmental Markets for Biogas Market Credit Biogas Use Geographic Limitation California Cap-and-Trade Offset Any Anywhere in the US US Renewable Fuel Standard RIN (Renewable Identification Number) Transportation fuel Anywhere in the US California Low Carbon Fuel Standard LCFS Credit Transportation fuel Fuel consumed in California Oregon Clean Fuels Program LCFS Credit Transportation fuel Fuel consumed in Oregon
  3. 3. 99.18 68 13.45 -15.29 -40 -20 0 20 40 60 80 100 120 Gasoline Compressed Natural Gas Dairy Biogas Food Waste Biogas CarbonIntensity(gCO2e/MJ)
  4. 4. 0 20 40 60 80 100 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CarbonIntensity(gCO2e/MJ) California’s Low Carbon Fuel Standard Carbon Intensity of Compressed Biomethane from Dairy Farms - 13.45 gCO2e/MJ Carbon Intensity of Crude Oil - 99.18 gCO2e/MJ LCFS Carbon Intensity Targets Credits Deficits
  5. 5. Oregon’s Clean Fuels Program • 2009 – Passed the Clean Fuels Program – Sunset in 2015 • 2015 – SB324 removes sunset – 10% reduction in carbon intensity of transportation fuels by 2025. • 2016 through 2025 – Credit trading to meet reduction targets
  6. 6. Washington Clean Fuels Standard • Washington Department of Ecology has the authority to implement a Low Carbon Fuel Standard (under the Washington Clean Air Act). – Agency rulemaking (not new legislation) is all that is required. • 2009 – Study Low Carbon Fuel Standard (with Oregon). • 2013 – Pacific Coast Collaborative. – “Oregon and Washington will adopt Low Carbon Fuel Standards.” • April 2014 –Office of Financial Management reevaluate Clean Fuels Standard. Source: Lifecycle Associates et al. A Clean Fuel Standard in Washington State. December 2014.
  7. 7. Washington Clean Fuels Standard • April 2015 – Senate transportation bill “poison pill” – “redirects vehicles fees to a legislatively controlled account should the Governor move ahead with Clean Fuel Standard adoption” • We’ll see! – “Hard to imagine Washington being the only state on the West Coast without a Low Carbon Fuel Standard”
  8. 8. $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 California LCFS Price ($/mtCO2e)
  9. 9. $/mtCO2e $/MMBTU1 $/DGE1 (diesel gallon equivalent) Current $21.75 $2.59 $0.34 Average $42.26 $5.03 $0.65 High $85.00 $10.12 $1.31 LCFS Value to Biogas Food Waste (HSAD) Carbon Intensity: -15.29 1 $/MMBTU and $/DGE prices for 2014; credits generated per MMBTU or DGE vary annually as the CA LCFS carbon intensity target is adjusted down.
  10. 10. $/mtCO2e $/MMBTU1 $/DGE1 (diesel gallon equivalent) Current $21.75 $1.93 $0.25 Average $42.26 $3.75 $0.49 High $85.00 $7.54 $0.98 LCFS Value to Biogas Dairy Digestion Carbon Intensity: 13.45 1 $/MMBTU and $/DGE prices for 2014; credits generated per MMBTU or DGE vary annually as the CA LCFS carbon intensity target is adjusted down.
  11. 11. Biomethane credit ownership • Oregon – Entity that refines/treats biogas into biomethane • Importers - Trucked – Owner of biomethane when trucked into Oregon - Pipeline – Owner of biomethane when injected into pipeline outside of Oregon.
  12. 12. Key Barrier: Financing projects • LCFS market is – Nascent – Volatile – Complex – Under legal challenge – Policy dependent (demand = policy, supply = policy) •  credits are not “bankable”
  13. 13. Thank you! Peter Weisberg Program Manager The Climate Trust pweisberg@climatetrust.org (503)238-1915 x207

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