Chevron U.S.A. Inc. and California Bioenergy LLC (CalBio) have recently announced a joint investment in their second holding company to produce and market dairy biomethane as a renewable natural gas (RNG) transportation fuel in California. Under California’s Low Carbon Fuel Standard, renewable natural gas is considered to be carbon negative on a lifecycle basis.
The holding company, CalBioGas Hilmar LLC, secured initial funding from Chevron destined to build infrastructure for dairy biomethane projects in California’s Merced County.
CalBio currently brings technology and operational experience to help dairy farmers build digesters and methane capture projects in order to convert methane resulting from manure storage into RNG. Chevron will provide additional funding for as many as seven digesters and one central upgrading facility across a number of dairy farms in Merced County.
The array of digesters has been awarded California Department of Food and Agriculture grants, and must be amplified with additional capital to complete the projects. The project is expected to be complete in 2023, and Chevron will take the entirety of the renewable natural gas produced to market in the California vehicle fuels market.
“This project brings together support from many groups, including seven California Dairy farmers, who are national leaders in milk and cheese production; Chevron, one of California’s largest energy companies; and grant funding from the California Department of Food and Agriculture. The strong support from these partners will help California with its emission reduction targets,” said Neil Black, president of CalBio. “These projects are also benefiting the local community through job creation and protecting local air and water quality.”
Chevron is complementing its traditional products business with new offerings that help customers support a lower carbon future. Carbon negative renewable natural gas produced from dairy biomethane is an essential part of its portfolio of solutions.
“We are excited to continue our partnership with CalBio and work with local communities and farmers to develop lower carbon fuel solutions,” said Andy Walz, president of Americas Fuels & Lubricants for Chevron. “The investment underscores our commitment to produce 40,000 MMBTU/D of RNG by 2030 and grow the lower carbon businesses that we believe will be a bigger part of the future.”
