Smithfield Meals, the world’s largest pig producer, and Dominion Vitality, one of many nation’s largest investor-owned utilities, need you to know they’re joyful collectively. And no, it has nothing to do with Valentine’s Day.
The 2 corporations introduced on the finish of final yr they’re doubling down on their program Align Renewable Pure Fuel, a partnership spearheaded in 2018 to supply biomethane (often known as renewable pure fuel, or RNG). The overall funding will probably be $500 million by way of 2028.
The funding expands operations that seize the methane from manure lagoons of Smithfield’s pig farmers, which is then processed by Dominion and can be utilized interchangeably with fracked pure fuel in pipelines. The partnership brings each corporations nearer to their sustainability objectives.
Smithfield is striving in direction of an absolute emissions reductions of 25 p.c by 2025, that means it must bear in mind the emissions related to its total provide chain — together with the methane from the 15 million pigs it raises yearly, which account for about 40 to 45 p.c of the corporate’s emissions.
This week, Dominion introduced a dedication to succeed in net-zero emissions in energy era and pure fuel by 2050 (a step up from its earlier dedication of an 80 p.c discount by 2050). The utility is touting its enlargement of RNG, together with its photo voltaic investments and offshore wind management, as proof of its local weather management.
Bringing house the bacon
The Dominion and Smithfield groups say the partnership is a pure match.
Smithfield has been on the lookout for methods to make use of manure past fertilizer for years. As a meals firm, the company says it lacked the experience to maneuver into the RNG market. Enter Dominion.
“As a swine producer, we’re actually good at what we do,” Kraig Westerbeek, senior director of Smithfield Renewables, informed me. “Once we begin to get into this power enterprise, we take a look at this and we expect, ‘We’re not power consultants,’ and an organization like Dominion is. It simply makes a variety of sense, in our opinion, to accomplice with people which have the kind of experience that we don’t have as an organization.”
One firm can’t clear up this challenge, however there’s all the time an expectation for corporations to do their half and for corporations to face for one thing.
“We even have related cultures; we care loads about contributing to our communities and now we have an enormous concentrate on security and sustainability,” added Ryan Childress, Dominion’s director of enterprise improvement. “Sustainability begins with an concept, after which it’s a must to align to take motion,” he added, pirouetting right into a play on this system’s title, Align RNG.
Dominion has labored with different personal corporations on renewable power initiatives as properly. Final yr, tech giants with information facilities in Virginia, together with Microsoft, LinkedIn and Apple, demanded the utility deploy renewable power to fulfill any enhance in energy, slightly than pure gas-fired energy vegetation proposed by Dominion.
Childress described this as a “partnership dynamic,” not corporations pushing the utility to transition to scrub power quicker.
“Whether or not it is meals or tech corporations, we’re making an attempt to go throughout trade to search out methods to scale back carbon and supply cleaner power options to all of our clients,” mentioned Childress.
The maturing RNG market
The concept of utilizing biomethane as a gasoline isn’t new. RNG additionally transforms biomethane, a waste product that impacted emissions objectives, into a possible income stream for farmers, who get a share of the methane gross sales.
Within the final yr or so, nevertheless, the concept has picked up severe momentum. There’s a confluence of things including gasoline to the uptick.
First, know-how has gotten higher, in response to Westerbeek. Up to now, farms tried to make electrical energy onsite with biodigester engines that have been sophisticated and costly. Right now, utilities and fuel corporations can course of the biomethane and purify in bulk, both for electrical energy era or to displace fracked pure fuel.
Second, the RNG market is maturing, that means farmers and fuel corporations may make actual cash. RNG has gained consideration as a possible useful resource to decarbonize the transportation sector, as its carbon depth is technically unfavourable.
California’s low carbon gasoline normal (LCFS) is without doubt one of the stronger markets, providing round $200 per credit score, incentivizing farmers and financiers throughout the nation to money in. The market has attracted sources from throughout North America — together with Missouri and Canada — and California’s agriculture division has funded greater than 60 (PDF) of dairy biogas initiatives, with plans to broaden.
Dominion plans to promote the RNG from Smithfield’s Utah facility into the California LCFS market. In a separate take care of Duke Vitality, Smithfield can also be promoting RNG into North Carolina to assist that state meet its renewable portfolio normal.
The environmental problem of livestock manufacturing
On the subject of local weather, Smithfield Meals has a tricky row to hoe. Livestock manufacturing is emissions-intensive, accounting for about 14.5 p.c of all human-caused emissions.
Smithfield has sweeping environmental objectives that vary from animal stewardship to modest power discount objectives (5 p.c by 2020, from a 2014 baseline). Nonetheless, given the elemental challenges in aligning livestock manufacturing with local weather objectives, Smithfield’s dedication is commendable.
Whether or not it is meals or tech corporations, we’re making an attempt to go throughout trade to search out methods to scale back carbon and supply cleaner power options to all of our clients.
“I feel it’s serving to transfer our trade, which is necessary,” mentioned Stewart Leeth, VP of regulatory affairs chief sustainability officer for Smithfield. “One firm can’t clear up this challenge, however there’s all the time an expectation for corporations to do their half and for corporations to face for one thing, and that’s significantly true with youthful folks.”
RNG’s sophisticated math
RNG and its unfavourable emissions accounting is vital to Dominion reaching its carbon neutrality objective by 2050. In a launch, the corporate mentioned that capturing the methane from farms will offset “any remaining methane and carbon dioxide emissions from the corporate’s pure fuel operations.”
Based on Dominion’s calculations, mixing simply four p.c of RNG with 96 p.c fracked pure fuel will offset the carbon footprint fully, as RNG “captures 25 instances extra greenhouse fuel than it releases.” (This calculation doesn’t bear in mind pipeline methane leaks, estimated to be 2 to three p.c.)
On the identical day that Dominion introduced its new local weather objective, the corporate’s CEO, Tom Farrell, mentioned throughout an earnings name that the corporate is growing its stake within the controversial Atlantic Coast Pipeline and doesn’t plan on curbing pure fuel.
“Just lately, now we have begun to listen to of investor concern that at the very least in some states, municipal-level ordinances may restrict total demand progress for pure fuel utility service,” Farrell mentioned. “Whereas that could be true elsewhere, we merely don’t see any proof of slowing buyer or funding progress within the states during which we function fuel utilities.”
Whereas capturing biomethane and turning it into usable gasoline is clearly helpful, it turns into problematic if used to delay the tempo of electrifying buildings and to justify increasing pure fuel, which is shortly turning into one of many largest sources of greenhouse fuel emissions in the USA.
“This quantities to a glorified offset scheme and a approach for Dominion to maintain investing in new fracked fuel infrastructure in lieu of electrification, which is one of the best ways to decarbonize buildings,” mentioned David Pomerantz, govt director of the Vitality and Coverage Institute, a utility watchdog group. “RNG doesn’t obviate the necessity for Dominion to start out phasing out its fossil gasoline companies, and that is precisely what the corporate appears dead-set on avoiding.”
This text is customized from GreenBiz’s publication Vitality Weekly, operating Thursdays. Subscribe right here.