1. What are the best…

1. What are the best opportunities for successful agri-food RNG for transportation projects?

The best opportunities lie in a) Building out organics capacity in Ontario municipalities to increase the total feedstock available for AD > RNG. Education and training for staff and citizens rolling out Green Bin diversion programs for better and higher quality organic feedstocks. b) Commercializing (lease, concession approach) underutilized existing farm and municipal WWTP digesters, which are plentiful in Ontario, to reduce capital costs and bring revenue to municipalities where existing digesters have resulted in both sunk capital and annual operating costs. c) Optimizing technologies for these digesters through the use of innovative technologies for depackaging SSOs into organic slurry, and better technology at the digester i.e. adding a second thermophilic (higher temperature) digester to increase biogas yield and improve economics. d) Leveraging current GHG programs and credits currently available through Ontario's Climate Change Green Investment Fund and other related federal programs such as FCM's Green Municipal Fund. One potential advantage of direct use of biomethane over natural gas pipeline injection is that natural gas fueled vehicles can tolerate lower concentrations of methane, which can have a significant impact on gas cleanup costs. For injection into the pipeline, the biogas must be purified to greater than 95 percent methane. For direct use as a vehicle fuel, biogas may be cleaned to around 90 percent methane. Which businesses or organizations are best prepared to successfully deploy RNG anaerobic digesters and natural gas fueled fleets? What other business partners and business relationships will need to be in place for projects to succeed? SusGlobal is a corporation operating specifically in the waste organics to biogas field with a core competence and tight focus on this specific aspect of waste to energy. Our CEO Gerald Hamaliuk has extensive experience in the biogas industry working on CDM landfill gas projects in Asia under the Kyoto regime. SusGlobal’s innovative strategy (using existing digesters and shipping organic slurry from municipal processing centers to different digesters) allows us to minimize capital costs and optimize existing SSO processing and digesting infrastructure. Partnerships are a vital aspect of what will make an organization succeed in this nascent industry. SusGlobal is partnering with Hamilton Utilities Corporation, who will operate the biogas purification, processing and co-gen facilities, and with State Group, who will build and/or retrofit our processing stations, digester facilities, and liquid handling sites for hydrolyzed slurry, where appropriate. These partnerships with progressive energy companies and contractors are vital to our business model. We also aim to partner with municipalities, provincial and federal ministries and agencies, and the natural gas industry as we move forward in the RNG field. With respect to the organizations and companies well poised to deploy RNG/CNG fleets, since the last attempts to increase the use of natural gas vehicles during the 1980s, the price for natural gas vehicles has shifted up and down with changes in the natural gas markets. Attention has focused primarily on “captive fleets,” that is, fleets of vehicles that operate in a localized area and return to the same home base each day. Fleets in urban areas with higher fuel usage per vehicle mile have had the most success. Examples of such fleets include taxis, school and municipal buses, and refuse/recycling trucks. SusGlobal is working with GFL to provide Compressed Biogas for their vehicles that are already utilizing CNG for fuel.

2. What are the key financial opportunities that will help projects to succeed?

Leveraging government funding and GHG cap and trade programs, (see 1. 4) above, using existing capital markets for financing including banks and credit unions for project finance, and the raising of share capital through private rounds of financing and a public offering on market exchanges. Looking for good fits with our municipal partners, where we can offer them a stable revenue source on a long-term contract, lower their tipping fees, and/or share in energy revenues, where currently they are either incurring unnecessary costs or receiving a suboptimal revenue from their waste projects that send food wastes to landfill or biogas gensets (electricity) projects.

3. At what scale would a project have to be deployed to be successful? How much RNG production? How many vehicles?

Successful RNG projects will depend on RNG revenue as a percentage of the total capital and operating costs of the project. Ideally a project can succeed with a long (15 to 25 year) project term ensuring stable revenues. Displacement of diesel by RNG is the ideal economic result, as the current diesel price is more than 5 times the price of natural gas in Canada. The minimum scale for the gas treating depends on the quality of RNG required, but for vehicle fuel, it is about 500 m3/h of biogas. That would be 300 m3/h methane or 2.5 million m3/a that would fuel vehicles based on the amount of use. Our recommendation would be a site such as Hamilton that has excess digester capacity, a bus fleet fueled by CNG and a waste hauler (GFL) that has more than 50 waste trucks using CNG as fuel today.

4. Are businesses and organizations ready to develop and deploy RNG for transportation projects? Are there gaps in the supply chain? What would improve companies’ readiness?

Every bus or truck fleet already converted to fossil natural gas is poised to shift to RNG. The challenges of this shift involve ramping up production of RNG from local organic wastes and getting the fuel to vehicle markets either via refueling equipment at the fuel production site or by sending it to markets further away by tanker trucks or pipeline. Filling stations and pipelines to move RNG from biogas projects to the fleets would improve the supply chain. Co-locating public CNG fueling stations near sources of biomethane in urban areas or at transportation nodes in rural areas provides even greater benefit. Finally, it is important to provide direct support for plants and the equipment needed to produce biogas from agricultural and municipal organic wastes. It would be helpful if federal grants treated transportation end uses equitably with heat and power end uses. Support for basic investments in natural gas infrastructure and natural gas vehicles. Investing in CNG fueling stations and vehicles anywhere enlarges the access that biomethane producers have to markets through natural gas fueling infrastructure.

5. What barriers to do you foresee to developing a successful project? How can these barriers be overcome?

Cultural barriers in source separating organics at the residential level; Regulatory barriers in the form of onerous and overly conservative acceptances of environmental compliance approvals. Permitting and legal restrictions; Lack of customers - lack of refueling stations

6. How long would it take to deploy an RNG for transportation project from conception to successful operation?

14 to 20 months.

7. Describe the types of government support needed to successfully deploy RNG for transportation projects.

Provincial and federal support and subsidies are critical to project success. Projects like the OCE TargetGHG Fund, the related Green Investment Fund, and existing and potential programs funded from the federal government's $5 billion green infrastructure commitment, delivered through the Federation of Canadian Municipalities. Easing of permitting and legal restrictions on vehicle conversion kits to allow dual fueling for diesel engines.

8. What are some criteria or project attributes that should be considered or prioritized for a project to be supported through this program?

Scale of biogas production and existing infrastructure to enable both faster implementation and demonstrate more efficient use of existing infrastructure for anaerobic digestion, biogas treating and vehicle fueling with CNG.

9. What should be included in the program to ensure broader uptake of RNG for transportation after the program is completed?

Support for infrastructure and firms that fill the supply chain gap; i.e. filling stations, pricing support (or subsidies) for RNG fuel.

10. Please comment on any other requirements or considerations for the Agri-food RNG for Transportation Demonstration program.

Consideration for time to execution and use of existing infrastructure should be paramount, especially since there are many parts of Ontario that have existing infrastructure that can be utilized to reduce capital and operating expenses for increasing RNG production.

[Original Comment ID: 209676]