This paper presents the results of a study conducted by Itron, Sustainable Conservation and Bowen & Associates for the Sacramento Municipal Utility District (SMUD) to investigate the status and costs of controls for reducing emissions of oxides of nitrogen (NOx) from small (100 to 300 kW) reciprocating engines operating on biogas from dairy digesters. During the course of the study, it became apparent that simultaneous environmental policies have created a fundamental “catch 22” situation for California’s biogas industry. On one hand, California air quality regulations require distributed generation (DG) technologies to achieve aggressive emission limits for control of oxides of nitrogen (NOx). At the same time, California’s Governor and Legislature have passed landmark legislation calling for GHG emissions to be reduced by twenty-five percent to 1990 levels by no later than 2020. A “catch 22” occurs because while DG technologies, particularly biogas fueled technologies, can play a key role in reducing GHG emissions, NOx control technologies needed to meet the required NOx levels have not matured to commercial readiness. This requires project developers to take substantial risks on both the financial and technical front without the likelihood of recouping their investments. The result creates an impasse that potentially deprives California not only of forward progress in reducing GHG emissions but forestalls significant interim NOx reductions that could otherwise be achieved. However, the situation highlights a problem that extends beyond California’s borders and the biogas industry: how to simultaneously achieve aggressive air quality targets while making significant reductions in greenhouse gas (GHG) emissions. This paper presents the findings of an investigation into proposed NOx emissions limits for biogas to energy applications and how those requirements interact with policies to reduce GHG emissions.

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