Platts launches daily price assessments of North American RNG

Platts, part of London-based S&P Global Commodity Insights, an independent provider of information, analysis, data and benchmark prices for commodities, energy and energy transition markets, has announced the launch of its North America Renewable Natural Gas (RNG) price assessments, with the aim of bringing price transparency to the emerging market.

RNG is methane-rich biogas emitted from sources such as animal manure, landfills and sewage that has been captured and processed to produce pipeline-quality natural gas.

Production of United States RNG has grown steadily since its inclusion in the federal Renewable Fuel Standard (RFS).

“We believe our new Platts RNG assessments bring much-needed price transparency to this nascent and growing market, and we see the demand for renewable natural gas pricing information continuing to grow as RNG becomes ever more important as a component of the energy transition,” says Alan Hayes, head of energy transition pricing, S&P Commodity Insights.

According to S&P Global Commodity Insights’ forecasting, RNG supply could grow threefold by 2030.

RELATED: Diversified markets | Taking advantage in an era of opportunity

California is the first state in the U.S. to adopt a renewable gas standard and is a key consumer of RNG. The California transportation fuels market historically has been considered the market of choice for RNG sellers across North America with the combination of the state’s Low Carbon Fuel Standard (LCFS) and federal RFS credits setting a “price to beat” for other buyers. 

Platts has launched two RNG price assessments: One that reflects California transport fuels market incentives where the transacted gas is consumed within California and another that reflects RNG supplied to consumers outside of California and thus does not include those additional state-level incentives. The new Platts price assessments reflect the premium that pipeline-quality RNG receives over pipeline-quality fossil-based natural gas, delivered on a spot basis in North America with a pathway that has a carbon intensity (CI) of 45, which Platt says is typical of landfill-derived RNG.  

Platts will also publish the North America RNG carbon intensity value per point, which represents the change in the value of the North America RNG Premium based on a one-point decrease in the carbon intensity of the production pathway.

“Renewable natural gas is one of the solutions market participants have to reduce methane emissions and carbon intensity. Having this new price information will allow companies to better value their RNG portfolios on a daily basis regardless of production pathway or location,” says Mark Callahan, director Americas Natural Gas Pricing, S&P Commodity Insights.

The RNG prices are assessed with a 1:30 p.m. Central timestamp and are published each business day, according to the Platts Houston holiday schedule in US dollars per million British thermal unit (MMBtu).

Platts uses trades, bids, offers and indicative values from market participants to assess RNG prices. In the absence of spot market information, Platts may refer to associated markets including the per MMBtu value of current-year D3 RINs and prompt-quarter California LCFS credits. The LCFS credit value for RNG is calculated using California Air Resources Board formulas. Platts uses the current compliance year for diesel reference fuel with a vehicle-fuel energy economy ratio of 0.9 in dollars per MMBtu of gas based on the current LCFS regulation from the Air Resources Board. The North America Renewable Natural Gas Premium is based only on the cellulosic biofuel D3 RIN price for the current year and does not include LCFS credit values.

The assessments may be found in S&P Global Commodity Insights products and services, including Platts Gas Daily, Americas Natural Gas Alert pages, Platts Dimensions Pro, and in the Platts price database.