Making an Impact with Renewable Fuels Purchases

This webinar, hosted by Center for Resource Solutions (CRS), will explore the ways companies can navigate the complicated renewable fuels marketplace to achieve greater climate impact. With case studies of recent transactions from Anew Climate, the first marketer with a Green-e® certified biomethane (also known as renewable natural gas, or RNG) product; insights from the leading industry association, the Renewable Natural Gas Coalition (RNGC); and market health and growth indicators from the Renewable Thermal Collaborative (RTC), this session will help answer your questions and provide a window into the market for voluntary purchases of RNG, including the included environmental attributes and associated renewable fuel certificates (RFCs) associated with each dekatherm of RNG.

Speakers

• Blaine Collison, Executive Director, RTC; and Senior Vice President, David Gardiner & Associates
• Randy Lack, Founder and Head of Portfolio Management, Anew Climate
• Sam Lehr, Policy Manager, RNGC
• Michelle McGinty, Sr. Manager Outreach, CRS

Transcript

2. Nongovernmental Organization (NGO) creating policy and market solutions to advance sustainable energy since 1997. • Expert assistance • Renewable energy and climate policy • Clean Energy Accounting Project (CEAP) • Contact ceap@resource-solutions.org if interested in being involved • Renewable Energy Markets annual conference • Green-e® certification for suppliers and users of renewable electricity, carbon offsets and biomethane in the voluntary market About Center for Resource Solutions PAGE 2 © 2023 Center for Resource Solutions. All rights reserved.
3. • Biomethane, also called Renewable Natural Gas (RNG), is purified or upgraded biogas, which is made from the decomposition of organic material. • Double Benefit: • Capture methane • Displace fossil fuels Biomethane PAGE 3 © 2020 Center for Resource Solutions. All rights reserved. Graphic Source: EPA, Landfill Methane Outreach Program (LMOP), Renewable Natural Gas https://www.epa.gov/lmop/renewable-natural-gas#:~:text=The%20biogas%20used%20to%20produce,and%20organic%20waste%20management%20operations.
4. 1 RFC represents the environmental attributes of 1 dekatherm of renewable fuel that can be paired with gas consumption. RFCs are essential for tracking renewable fuel production and delivery Renewable Fuel Certificates PAGE 4 © 2020 Center for Resource Solutions. All rights reserved. 1 dth RFC Gas Pipeline Tracking System Producer
5. RTC Overview Renewable Thermal Collaborative October 2023
6. The Challenge of Decarbonizing Thermal RenewableThermal.org / info@renewablethermal.org / @Rethermal Renewable Thermal: Beyond Electricity Facilitated by:
7. RenewableThermal.org / info@renewablethermal.org / @Rethermal RTC Members
8. RenewableThermal.org / info@renewablethermal.org / @Rethermal RTC Sponsors
9. What Is the RTC? RenewableThermal.org / info@renewablethermal.org / @Rethermal The RTC is the only global, buyer-led coalition focused on decarbonizing thermal energy with renewables. We focus our work across the intersecting issues of technology, market development, and policy. RTC Members (buy-side) and Sponsors (solutions-side) are invited to participate in multiple RTC workstreams to: • Identify and address barriers; • Accelerate solutions; • Implement projects and policies.
10. What We Do Technology Action Plans and Partnerships (TAPPs) • Working Groups of members, sponsors, and select experts convened to identify barriers and execute solutions for these renewable thermal technologies: • Green Hydrogen • Industrial Electrification • Renewable Natural Gas (RNG) • Solar Thermal • Sustainable Biomass • Thermal Energy Storage Policy • Working Group of members and sponsors; focused on U.S. federal policy; • Will expand to targeted states. Market Development • Monthly Community Calls • Members, sponsors, and select guests only • Annual Summit; October 19-20, 2023 in DC • Greenhouse Gas Accounting & Claims Working Group • Sector Action Plans and Partnerships (SAPPs) • Working Groups of members, sponsors, and select experts convened to identify barriers and execute solutions for specific sectors; • Food & Beverage is first, Chemicals second • Additional sectors TBD • The Renewable Thermal Vision • How do we get from here to there? RenewableThermal.org / info@renewablethermal.org / @Rethermal
11. RTC Resources Convenings: Annual Summit (Oct 19-20, 2023 - Washington, DC): https://www.renewablethermal.org/rtc-summit/ Monthly Community Calls: Second Tuesday, 11a-12p ET Working Groups: • Electrification, Green Hydrogen, RNG, Solar Thermal • Greenhouse Gas Accounting & Claims • Policy Tools: Policy Finder: https://www.renewablethermal.org/policy-finder/ Partner Locator: https://www.renewablethermal.org/partner/ Heat Pump Decision Support Tools: https://www.renewablethermal.org/heat-pump-decision-support- tools/ Electrification Road Map (update pending): https://www.renewablethermal.org/electrification-road-map/ RenewableThermal.org / info@renewablethermal.org / @Rethermal Publications: Renewable Thermal Vision: https://www.renewablethermal.org/vision/ Case Studies: https://www.renewablethermal.org/category/publications/case- studies/ Industrial Electrification: https://www.renewablethermal.org/state-electrification-report/ Green Hydrogen Technology Assessment: https://www.renewablethermal.org/gh2-tech-assessment/ Communications: Monthly newsletter: https://www.renewablethermal.org/contact-us/ LinkedIn: https://www.linkedin.com/company/renewable-thermal- collaborative/
12. The Renewable Thermal Vision RenewableThermal.org / info@renewablethermal.org / @Rethermal isn Report • Full Package • Finding a Path Forward for Decarbonizing Thermal Energy in the U.S. Industrial Sector • Finding a Path Forward for Decarbonizing Thermal Energy in the U.S. Industrial Sector Sectors: Cement Chemicals Food Iron & Steel Paper Refineries Technologies: CCUS Clean Hydrogen Electric Heat Pumpts Electric Resistance Renewable Natural Gas Solar Thermal Thermal Storage Waste Biomass
13. Contact Info RenewableThermal.org / info@renewablethermal.org / @Rethermal Blaine Collison RTC Executive Director blaine@dgardiner.com 202-669-5950 Sign up for our newsletter at renewablethermal.org
14. Making an Impact with Renewable Fuels Purchases CRS Webinar 10.4.23
15. 15 About RNG Coalition • Provide education and policy advocacy on behalf of renewable gas industries in North America • We advocate for the sustainable development, deployment and utilization of renewable gas so that present and future generations will have access to domestic, renewable, clean fuel and energy • 370+ members including: RNG developers, marketers, financiers, technology providers, consultants, utilities and labor coming together • 98%+ of the RNG supply in North America
16. 16 Organic Waste-to-X Thermal Transportation Electricity Hydrogen Bio-based Products
17. 17 North American RNG Markets at a Glance • Enabling policies in 44 states and provinces • Transportation and thermal markets are currently largest demand drivers • 116 tBtu/yr production capacity • 178 tBtu/yr in progress • Approaching 1% of total U.S. • Potential 9-26% of residential, commercial, industrial from AD around 2030
18. 18 Denmark/EU Strategies Outline Comprehensive Role for Renewable Gas • Danish gas system current at 39.3% biomethane • Expects to achieve 100% biomethane around 2035 • Includes dedicated pipelines for renewable methane, hydrogen, raw biogas, and CO2 • Denmark is currently around 5-6% landfill (note this also includes incineration for non- organic)
19. 19 Renewable Energy Tracking and Certification Underpins Procurement M-RETS • Primary RNG verification system • Includes CI, feedstock, vintage, location, etc. • Voluntary buyers • Compliance markets including OR, WA CFS, etc. Green-e (Center for Resources Solutions) • Sustainability certification • Analogous to Green-e renewable power • Pairs with M-RETS (optional)
20. 20 Clean Energy Procurement & Reporting Compliance Programs • Clean fuel standards, renewable gas standards, clean heat standards, clean electricity standards • EU RED II • State, provincial, and federal Voluntary Buyers • Corporations with GHG reduction targets • Procurement of clean fuels and clean power Clean Energy as a Feedstock • RNG used as a feedstock for sustainable aviation fuel, biomethanol, hyrodgen, etc. • Envisioned by the Inflation Reduction Act tax incentive frameworks, procurement programs Map of clean fuel standards in North America
21. 21 Carbon Accounting Guidance WRI Guidance • Biomethane Annex to be removed from Land Sector and Removals Guidance; final expected late 2023/early 2024 • Interim guidance allows discretion • Commitment to working with RNGC and EBA on incorporating best practices. Draft 2024/final 2025 SBTi • Updated FAQs to exclude market-based instruments for scope 1, scope 3 • Currently accepting comments/evidence supporting market-based instruments • RNGC plans to comment; working group creating draft template
22. 22 Broad Considerations • Growing Clean Energy Supply – Market-based instruments are a proven and necessary tool for increasing clean energy supply and necessary infrastructure • Companies’ ability to meet GHG reduction targets will be greatly diminished without the ability without GHG accounting frameworks that are aligned with procurement methods. These buyers are often able to fund nascent technologies • Alignment of GHG accounting standards and ubiquitous understanding across industry is necessary for uniform reporting, could create contradiction with clean energy bought in compliance markets • U.S. GHG reporting laws will require companies to report GHG emissions
23. Green-e® Renewable Fuels. PAGE 23 © 2023 Center for Resource Solutions. All rights reserved.
24. PAGE 24 • Global leader in clean energy certification • Consumer protection for voluntary renewable energy purchases • Over 110 million MWh in retail transactions certified in 2021, enough to power 4 out of 5 U.S. households for a month. Green-e® Certification © 2020 Center for Resource Solutions. All rights reserved.
25. Tracking Systems: • Issue tradable certificates • Based on meter data • No double issuance for the same dth • Review a producer’s existence, licensing, capacity, etc. Certificates and Certification: REC Issuance vs Purchasing PAGE 25 © 2020 Center for Resource Solutions. All rights reserved. Third-Party Certification: • Supplemental to a tracking system • Assess renewable fuel eligibility based on quality criteria such as environmental performance • No double selling or double claiming • Required customer disclosure and marketing oversight
26. Consumer Credibility. Green-e® is the leading 3rd party verification in renewable energy markets. It is recognized by many businesses as the gold standard for renewable energy sourcing. Risk Reduction. Protects against double counting and claiming, creating confidence in clean energy purchases. Quality Assurance. Certified renewable energy products meet rigorous environmental, sustainability, and marketing claims standards. Stakeholder-driven standards. Developed by an Independent Governance Board, including important environmental stakeholders such as the Union of Concerned Scientists, Natural Resources Defense Council (NRDC), and CDP. Benefits of Certification PAGE 26 © 2022 Center for Resource Solutions. All rights reserved.
27. PAGE 27 Objectives • Accelerate the adoption and drive voluntary market demand of renewable fuels, while ensuring that the gas is from sustainable renewable resources and meets the highest environmental standards • Ensure customers are protected in their purchase and ability to make verifiable usage claims Green-e® Renewable Fuels © 2022 Center for Resource Solutions. All rights reserved.
28. Geography. US and Canada. Regulatory surplus. No RINs or LCFS credits for the same dekatherm sold in a Green-e® certified transaction. Audits. Verification and audit required, ensuring no double counting, double selling, or double claiming. Marketing review for required consumer disclosures. Production Pathways. Fuel Type: Biomethane. Sources of Production: Digester Gas, Landfill Gas. Feedstocks for Anaerobic Digestion: Wastewater, Organic component of municipal solid waste when separated prior to landfilling, Food waste, Vegetative matter, such as yard waste, shrub, or chaparral, Crop residue, Animal waste (from farms that are not CAFOs). Example Requirements PAGE 28 © 2022 Center for Resource Solutions. All rights reserved.
29. CI Score. Maximum upstream CI must be 10% lower than fossil natural gas (9.38 gCO2e/MJ), up to the point of injection into the pipeline Example Requirements PAGE 29 © 2022 Center for Resource Solutions. All rights reserved. Carbon Intensity is the amount of greenhouse gas emissions produced during the production of a unit of energy. Green-e® Renewable Fuels requires CI to account for the production emissions (including leakage) up until the point of pipeline injection .
30. Renewable Fuels + Carbon Offsets PAGE 30 © 2022 Center for Resource Solutions. All rights reserved.
31. • Retire Renewable Fuels Certificates (RFC) for a percentage of natural gas usage. • Additionally retire carbon offsets (CO2e) for emissions associated with remaining natural gas usage. • No change to supply or sources of gas required. Optional: Carbon Offset + Renewable Fuels PAGE 31 © 2022 Center for Resource Solutions. All rights reserved. The carbon offsets must be Green-e® Climate certified Carbon Offset + Renewable Fuels
32. Green-e Climate CONG Participants PAGE 32 © 2023 Center for Resource Solutions. All rights reserved. Carbon Offset + Renewable Fuels
33. Green-e® Climate Certification for Carbon Offsets PAGE 33 Greenhouse gas emissions reduction Carbon offset project •Permanence •Additionality •Verified •Enforceable •Real Green-e® Climate Endorsed Project Level Standards Project-level certification standards © 2022 Center for Resource Solutions. All rights reserved. A carbon offset is a certificate representing the reduction of one metric ton (2,205 lbs) of carbon dioxide (or equivalent) emissions Carbon Offset + Renewable Fuels
34. Green-e Climate Certification for Carbon Offsets PAGE 34 © 2020 Center for Resource Solutions. All rights reserved. No retail oversight leaves room for: • Bad Actors (“Boiler rooms”) • Fraud and Double Selling • Deception • Mistakes Causing risk for buyer and seller Project-level certification standards Green-e retail certification standard minimizes these risks and sets quality standards for project-level certification Carbon Offset + Renewable Fuels
35. Coming Soon: Green-e® Renewable Fuels Extensions PAGE 35 © 2020 Center for Resource Solutions. All rights reserved. • Green Hydrogen • Goal is to accelerate the adoption of green hydrogen while ensuring: • Hydrogen is from sustainable renewable sources • Environmental and consumer protection requirements • Currently in development with plans to release final standard by Q2 of 2024 • First stakeholder commenter period: Q4 2023 • Other Renewable Fuels • In the future, plans to include other renewable fuels based on market interest and requirements Join the Green Hydrogen Working Group to assist in Standard Development. Email Chip.Wood@resource-solutions.org if interested in learning more.
36. Contact. Michelle McGinty SENIOR MANAGER, PROGRAM OUTREACH michelle.mcginty@resource-solutions.org 415.568.4284 www.resource-solutions.org © 2023 Center for Resource Solutions. All rights reserved.
37. Confidential and Proprietary www.anewclimate.com October 4, 2023 WEBINAR Green-e: Making an Impact with Renewable Fuels Purchases Confidential and Proprietary www.anewclimate.com
38. These materials have been provided to you by Anew Climate, LLC on behalf of itself and/or its affiliates (collectively, “Anew” or “the Company”) at your request and in connection with an actual or potential transaction and may not be used or relied upon for any purpose, including, without limitation, to form the definitive basis for any decision, contract, commitment or action whatsoever, with respect to any proposed transaction or otherwise. These materials do not constitute an obligation of any party to enter into a transaction or investment, and it is not a commitment to lend, syndicate a financing, underwrite or purchase securities, or commit capital, nor does it obligate Element to enter into such a commitment. Anew is not acting as a fiduciary to you. These materials are solely for informational purposes and shall not constitute an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities. These materials are confidential, may not be disclosed, summarized or otherwise referred to, in whole or in part, except as agreed to in writing by Anew. The information provided herein is not all-inclusive, nor does it contain all information that may be desirable or required in order to properly evaluate the transaction discussed herein. The information presented in these materials has been developed internally and/or obtained from sources believed to be reliable; however, Anew does not guarantee nor makes any representation or warranty, express or implied, as to the accuracy, adequacy, timeliness or completeness of such information or any Oral information provided in connection herewith, or any data such information generates, accepts no responsibility, obligation or liability (whether direct or indirect, in contract, tort or a) in relation to any of such information and assumes no responsibility for independent verification of such information. Anew and its officers, employees and agents expressly disclaim any and all liability which may be based on this document and any errors therein or omissions therefrom. Without limiting the generality of the foregoing, no audit or review has been undertaken by an independent third party of the financial assumptions, data, results, calculations and forecasts contained, presented or referred to in this document. Neither Anew nor any of its officers, employees or agents, make any representation or warranty, express or implied, that any transaction has been or may be affected on the terms or in the manner stated in this document. By accepting these materials, you hereby acknowledge that you are aware, and that you will advise your representatives that, the federal and state securities laws prohibit any person who has material, nonpublic information about a company from purchasing or selling securities of such a company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. To the extent such materials include estimates or forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by or reviewed or discussed with your Representatives and/or other potential transaction participants, or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such representatives (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials may include forward-looking statements that represent Anew’s opinions, expectations, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. Any forward-looking statements speak only as of the date they are made, and Anew assumes no duty to and does not undertake to update forward-looking statements. Forward- looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those projected in these materials due to factors including, without limitation, economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, and competitive conditions. These materials were designed for use by specific persons familiar with your business and affairs and Anew assumes no obligation to update or otherwise revise these materials. Anew does not provide tax, accounting, financial, investment, regulatory, legal or other advice, and you are advised to consult with your own tax, accounting, financial, investment, regulatory or legal advisers. If you are not the intended recipient of this document, please delete and destroy all copies immediately. Confidential and Proprietary www.anewclimate.com | 38 Disclaimer
39. Confidential and Proprietary www.anewclimate.com | 39 Voluntary RNG market evolution 1 Anew formed through merger of Element Markets and Bluesource in February 2022. First RNG delivered by Anew1 to combined-cycle power plant First Renewable Thermal transaction by Anew GHG Protocol Scope 2 guidance provides for market-based accounting for scope 1 emissions from RNG 2008 2015 M-RETS Renewable Thermal Tracking system launched 2019 RNG delivered by Anew for world’s first carbon- neutral supply vessel First Green-e Renewable Fuels certification by Anew 2022 2020 GHG Protocol Scope 2 guidance removes market-based accounting for scope 1 emissions from RNG 2023 GHG Protocol issues interim “double negative” guidance on biomethane (RNG) 2021 Green-e Renewable Fuels Standard launched The voluntary RNG market is scaling rapidly – driven by sustainability commitments across many industries (i.e., Fortune 500 companies, universities, utilities, etc.) and the acceptance of market- based instruments underpinned by credible, transparent tracking and certification programs.
40. Confidential and Proprietary www.anewclimate.com | 40 Voluntary versus compliance RNG markets The voluntary market competes with U.S. transportation fuel compliance markets (i.e., RFS, LCFS) for limited RNG supply. Alongside price volatility in the RFS, Anew has observed demand for RNG from voluntary buyers grow by 6X and average clearing prices increase by ~50% over the past three years. 1 Total transactions include both Green-e and non. 0 5 10 15 20 25 30 35 $- $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2021 2022 2023 RTC Transaction Count (#) Daily Value of D3 RNG ($/MMBtu) Anew RTC Transactions1 versus D3 RNG value Anew Annual RTC Transaction Count D3 RNG Price ($/MMBtu) Average RTC Clearing Price 2021 2022 2023
41. Confidential and Proprietary www.anewclimate.com | 41 Green-e: Benefits and challenges ahead Benefits of certification Challenges ahead for market participants § High-quality and transparent supply § RNG from waste resources1 § Exclusions: Behind-the-meter biomethane, waste incineration, and animal waste from CAFOs § U.S. and Canada § Shift from 15 to 5-year look-back period starting in 2024 § Flexible delivery and rigorous assurance against double counting concerns § Alignment with M-RETS tracking system § Ability to ‘bank’ attributes for future claims § Verification and audit required § No RIN or LCFS credits allowed for certified transactions § Long-term relevance of product due to uncertainty around voluntary GHG accounting and reporting principles § GHG Protocol’s “double negative” – Annex B removed but no guidance provided other than deference to auditor § SBTi currently only recognizes direct delivery method § Product preferences appear to be at odds with current market dynamics § Long-term, fixed price structures – but limited ability to compete with compliance market pricing, particularly for low-CI resources § Delayed delivery to meet sustainability targets in milestone years – but changes to certification program may restrict qualification § Scale – but near-term supply constraints are projected in nascent RNG industry, particularly if market-based instruments disallowed 1 Municipal, industrial, and commercial wastewater; MSW; food waste; vegetative matter; crop residue; and animal waste
42. Confidential and Proprietary www.anewclimate.com | 42 Case studies from Green-e transactions § Pharmaceutical company § Converted U.S. manufacturing facility from propane to natural gas (trucked CNG) as primary fuel § Seeking to bundle natural gas (trucked CNG) delivery with RNG attributes to achieve Scope 1 emission reduction goal § Key factors driving transaction: § Green-e certification to demonstrate the additional third-party review and quality standard of the product purchased § Ability to ‘bank’ attributes and allocate over multi-year period following transaction Case Study 1 Natural gas pipeline system Scope 1 emissions Dispensed CNG Unbundled RNG attributes (tracked via M-RETS) Scope 1 reduction for sustainability reporting
43. Confidential and Proprietary www.anewclimate.com | 43 Case studies from Green-e transactions Case Study 2 § Utility § Implemented green gas program for downstream commercial, industrial and/or residential customers § Seeking to bundle pipeline delivered natural gas with RNG attributes to enable customers to access energy from renewable sources § Key factors driving transaction: § Green-e certification to demonstrate to regulators the additional third-party review and quality standard of the product purchased § Ability to purchase a quantity of attributes in bulk to be banked and used for future program consumption Unbundled RNG attributes (tracked via M-RETS) Natural gas Utility Green gas program Renewable energy usage claims by downstream customers Natural gas pipeline system
44. www.anewclimate.com | 44 Randy Lack Head of Portfolio Management rlack@anewclimate.com Thank you
45. Q&A PAGE 45 © 2023 Center for Resource Solutions. All rights reserved.