Sustainability Strategy: Two Ways to Decarbonize Natural Gas
Businesses that operate with natural gas and plan to achieve aggressive sustainability goals can still aim for full decarbonization or 100 percent renewable status. Depending on your budget, your business can offset its gas usage through the purchase of carbon offsets or make the switch to renewable natural gas (RNG) to reduce greenhouse gas (GHG) emissions.
RNG, also referred to as biogas, is pipeline-quality natural gas derived from the decomposition of organic matter produced from various sources such as landfills, agricultural and industrial waste digesters, and wastewater treatment plants. RNG can be injected into a commercial pipeline system and used like any other natural gas purchased for heating, industrial processes and electricity generation.
“Large municipal and government agencies, RE100 companies (i.e., influential businesses committed to 100 percent renewable electricity), Fortune 500 companies and utility distribution companies are some examples of companies who might opt to use RNG for heating or electricity reasons, in addition to a variety of other renewable sources, in order to reach or maintain sustainability leader status” says Adam Waterson, a Constellation senior manager.
As a lower cost option for decarbonizing natural gas consumption, businesses can alternatively purchase carbon offsets as a part of their sustainability strategy to offset GHG emissions associated with their natural gas consumption.
What are carbon offsets?
Businesses just starting their carbon-neutral goals may look to a low-cost option for decarbonizing their onsite natural gas consumption. Carbon offsets represent verified GHG emission reductions resulting from projects such as forestry preservation and management, energy efficiency, renewable energy, chemical processes and industrial manufacturing recycling and sequestration, methane capture, and other carbon capture and sequestration projects.
By purchasing carbon offsets, businesses can indirectly reduce, or “offset”, their on-site GHG emissions, also known as Scope 1 emissions. Carbon offsets can also allow facilities to offset emissions made elsewhere beyond their own operations – such as for business travel and in their supply chains—which are known as Scope 3 GHG emissions.
For example, if all of a business’s on-site (Scope 1) GHG emissions are associated with its natural gas consumption, buying carbon offsets to match 100% of those GHG emissions would allow a business to claims that it has offset 100% of its Scope 1 emissions, achieving carbon neutrality with respect to its on-site operations.*
This option does not require facility or equipment modifications and gives businesses an opportunity to fund projects that result in GHG reductions outside of the scope of their direct operations.
Carbon offsets are verified by third party registries such as American Carbon registry, Climate Action Reserve, and Verified Carbon standard, which are managed in a way that ensures that each carbon offset represents a real reduction in GHG emissions as compared to the status quo, and is not used or claimed by any other party for compliance or voluntary purposes. Once a carbon offset is sold to an end user it is retired in the applicable registry, which prevents double counting of that offset.
What about directly reducing emissions with RNG?
Companies can choose to directly use RNG to power or to heat their facilities. Through this use, they can claim that they are using natural gas that is 100 percent renewable, directly reducing Scope 1 emissions associated with natural gas use. Scope 1 emissions include those resulting from onsite generation, heating, and fleet fuel consumption.
When biogas is consumed for electricity purposes, users may be eligible for renewable energy certificates (RECs). A REC is created when 1 MWh of electricity is generated from a renewable source. RECs allow you to make environmental claims about a reduction in Scope 2 emissions.
In addition to heat and electricity, renewable natural gas can be used to power vehicles. Constellation works with compressed natural gas (CNG) fueling stations to make biogas available as vehicle fuel and to become eligible to generate renewable vehicle fuel credits, such as Renewable Identification Numbers (RINS) in the Renewable Fuel Standard program, a federal initiative to expand the nation’s renewable fuels sector, and other state-level credits such as California’s Low Carbon Fuel Standard (LCFS).
One customer, American Natural Gas, LLC, a Beyond6 company, receives RNG from Constellation for their portfolio of 58 CNG stations located in 17 states throughout the country, and through this arrangement is able to participate in revenue sharing for RINs and LCFS credits generated from the use of RNG as a transportation fuel.
Reducing emissions through our carbon offset or RNG solutions allows businesses to show customers, investors and employees that they’re taking the necessary steps to do their part in creating a cleaner environment. Learn more about renewable gas by visiting our website at www.constellation.com/RNG.