RNG poised for $4B market in NA by 2030, lower carbon intensities making it a lucrative player in the clean fuels space

January 25, 2024. The North American renewable natural gas (RNG) market is on the verge of substantial growth, projected to surge from $1.5 billion in 2022 to $4.0 billion by 2030, boasting an impressive CAGR of 13.04%. This growth trajectory is driven by increasingly stringent emissions standards and several government regulations mandating the uptake of clean fuels.

The RNG production is projected to reach 160 million MMBTUs by 2030 from 71.5 billion MMBTUs in 2022, registering a CAGR of 12.19%. In terms of feedstock, landfills are expected to account for 64% of the RNG produced, owing to the large volume of landfill gas (LFG) generated from individual projects, along with most landfills already having LFG collection equipment in place. Agricultural waste based RNG is expected to account for 25% of the RNG produced while wastewater and food-waste or Source Separated Organics (SSO) are relatively less prominent, producing respectively 3% and 8% of the total RNG by 2030.

Clean Fuel Standards (CFS) across the US states of California, Oregon, Washington, the Canadian province of British Columbia and the emerging nationwide CFS in Canada, are expected to continue to drive the bulk of the demand for RNG. These markets would remain lucrative owing to the incentives that can be generated by the producers. Producers in the US will also have federal benefits from the RFS and the IRA. As the emission benchmarks within the CFS markets become increasingly stringent with each year, RNG becomes lucrative owing to much lower CIs compared to other fuels, with a particularly increased demand for low-CI RNG.

The North American RNG market exhibits significant competitive rivalry, with participation from several entities such as dairy farmers, landfill operators, utility companies, along with oil & gas corporations. The market is fragmented, with the top-ten project developers accounting for 20% of total capacity by 2030.

cCarbon’s report “North American Renewable Natural Gas Outlook 2030” delves deeper into the strategies, challenges, and opportunities in this rapidly evolving industry. The analysis is rooted in comprehensive market research, featuring data collection on renewable natural gas facilities across North America, research encompassing qualitative and quantitative analyses, stakeholder interviews, regulatory scrutiny, competitive landscape assessment, feedstock evaluation, and forecasting RNG prices. This multifaceted approach ensures a comprehensive understanding of the North American RNG market.