bp's Archaea Energy Brings Online Its Largest Modular RNG Plant to Date in Kansas

May 03, 2024

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(bp) The plant can convert 9,600 standard cubic feet of landfill gas per minute into lower-carbon renewable natural gas (RNG). Plant is expected to produce enough renewable natural gas to heat up to 38,000 homes annually, according to the EPA Landfill Gas Energy Benefits Calculator.

oday, bp’s Archaea Energy (NYSE: BP) announced the official startup of its largest original Archaea Modular Design (AMD) renewable natural gas (RNG) plant to date in Shawnee, Kansas, just outside of Kansas City. The plant, which is fully-owned by Archaea, is located next to a large, privately-owned landfill.

Landfill gas, a natural byproduct of the decomposition of waste in landfills, is a form of greenhouse gas. Using the AMD, the Shawnee plant captures the gas from the landfill and converts it to renewable natural gas. The Shawnee plant, which is three times the size of Archaea’s first AMD plant in Medora, Indiana brought online in October 2023, can process 9,600 standard cubic feet of landfill gas per minute (scfm) into RNG – enough gas to heat around 38,000 homes annually, according to the EPA’s Landfill Gas Energy Benefits Calculator.

Starlee Sykes, CEO Archaea Energy: “This represents another significant milestone for Archaea. A plant of this size can have a positive impact in capturing emissions from a landfill and providing our customers with lower carbon fuel. We are excited to be operating in Kansas – a state with an exceptional record in renewable energy.”

Traditionally, RNG plants have been custom built, but the AMD allows plants to be built on skids with interchangeable components. Using a standardized modular design leads to faster builds than previous industry standards. AMD plants are designed to come in three sizes – 3,200 scfm; 6,400 scfm; and 9,600 scfm.

After purchasing Archaea Energy, bp is now the largest producer of RNG in the US. In 2023, bp’s global biogas supply volumes were up 80% year-on-year, reflecting the Archaea uplift.

About Archaea Energy

Archaea Energy, a bp-owned company, is the largest RNG producer in the U.S., with an industry-leading platform and expertise in developing, constructing, and operating RNG facilities to capture waste emissions and convert them into low carbon fuel. Additional information is available at bp.com/archaea.

About bp

bp is investing in America’s energy system as we transition from an international oil company to an integrated energy company. With $150 billion invested in the US since 2005, it employs more than 30,000 people and support more than 300,000 jobs. bp has a bigger footprint in the United States than anywhere else in the world and is proud to be a trusted partner for secure, affordable and reliable energy. To learn more, please visit bpAmerica.com. READ MORE

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Archaea Energy brings online its largest modular RNG plant (Bioenergy International)
bp: 3 Policies The US Needs To Boost RNG (bp/Biomass Magazine)

Excerpt from bp/Biomass Magazine: Archaea’s 2024 project schedule alone could help avoid approximately 1 million metric tons of carbon dioxide equivalent greenhouse gas emissions per year, equivalent to the carbon emissions of almost 226,000 cars, according to the Environmental Protection Agency's calculator.

Supportive government policies can incentivize projects such as these while unlocking the full potential of biogas and RNG in the US energy system. Federal lawmakers and regulators have taken important steps in that direction, but their work is not complete, and it requires fixes in some cases.

Below are three policy measures the US can take to help expand domestic production and use of RNG.

1. Fix the US Treasury Department’s proposed biogas ITC guidance

The Inflation Reduction Act of 2022 includes a biogas investment tax credit (ITC) that can incentivize growth in the RNG sector and help ensure the fuel is cost-competitive with traditional natural gas.

RNG plants convert waste from a variety of sources—including trash, food waste and manure—into pipeline-ready gas. They use specialized equipment to separate the methane from impurities such as carbon dioxide and nitrogen, essentially upgrading the biogas so it meets the standards for productive use. This process is called cleaning and conditioning.

Under the US Treasury Department’s proposed framework for claiming the 30% biogas ITC, RNG producers such as Archaea may not qualify for the credit as the owner of cleaning and conditioning equipment if a separate entity such as a landfill owns the gas-collection system. This type of ownership arrangement is prevalent in the landfill-to-RNG space, so the guidance in its current form could deprive many future projects of a tax incentive that helps make them worthy of investment.

For that reason, bp submitted a comment letter to Treasury asking the department to change the guidelines so they would recognize cleaning and conditioning equipment as critical to biogas projects. The guidelines should also ideally allow the owner of such equipment to qualify for the biogas ITC regardless of whether a separate entity owns the landfill gas-collection system.

bp has also asked Treasury to amend its proposed application of the so-called “80/20 rule,” which is meant to ensure that qualifying projects involve significant new investments in the biogas space.

Under the current version of the guidance, an RNG project will not qualify for the credit if it uses a landfill’s pre-existing gas-collection system to gather biogas, unless new components for that system account for more than 80 percent of its total value.

Using a landfill’s pre-existing gas-collection system is common practice in the RNG industry, so bp has proposed that Treasury amend the 80/20 rule so it applies to entire RNG projects, rather than individual elements such as a landfill’s gas-collection system.

If Archaea can’t claim the tax credit for its cleaning and conditioning systems, its plans for investing up to $500 million a year in dozens of future American RNG projects could be in jeopardy – as could the opportunity for associated greenhouse gas reductions, community benefits and thousands of jobs.

2. Open a new pathway for RNG to power electric vehicles

In 2023, the US Environmental Protection Agency proposed a new rule for the federal Renewable Fuel Standard (RFS) that would enable tradeable credits to be generated when biogas is used to make renewable power for electric vehicle charging. That policy never made it into the final standard.

bp and its coalition partners with the Partnership for Electric Pathways are advocating for the EPA to resurrect that proposal and include it in the next Renewable Fuel Standard update, expected to take place by early 2025.

The credits, which could be traded within the RFS compliance market, would be known as electric renewable identification numbers (eRINs).

The existing Renewable Fuel Standard already includes a system of credits to incentivize use of other renewable fuels in place of fossil fuel for transportation. By adding an eRIN rule, EPA would establish a way to provide credits when biogas is used to generate electricity for electric vehicles.

bp believes an eRINs program can expand the US market for biogas, RNG and electric vehicles. It could also benefit rural communities, by providing an additional income stream for farmers whose agricultural-waste gas is converted to RNG and used to generate electricity.

3. Incentivize the use of RNG for low-carbon hydrogen

The Inflation Reduction Act established tax credits aimed at spurring development of a domestic low-carbon hydrogen industry to help the US achieve its decarbonization goals.

Under that provision, producers can qualify for a tax credit of up to $3 per kilogram of low-carbon hydrogen if the carbon intensity of their hydrogen production falls below a certain threshold. Using RNG with or instead of traditional natural gas can help them reach the target.

But Treasury’s proposed guidance for the tax incentive requires the RNG molecules to flow directly from their source to the hydrogen production facility, which is impractical when most RNG goes into the nation’s existing network of comingled natural gas pipelines.

bp is asking Treasury to provide an accounting system that would allow hydrogen producers to get credit for purchasing RNG injected into existing natural gas pipelines. The EPA uses a similar approach with its Renewable Fuel Standard, which does not require a direct connection between the source and end use of a low-carbon fuel.

This type of flexibility with the tax credit could help increase RNG demand and use, while opening another promising pathway for lowering the carbon intensity of hydrogen. READ MORE