Renewable natural gas could contribute $1.6 billion annually to Quebec GDP

15 February 2019 Consulting.ca

As study conducted by economic consultancy Aviseo for Quebec utility Énergir found that renewable natural gas (RNG) has the potential to unlock massive economic value for the province.

RNG, or biomethane, is a natural gas produced from waste sourced from forests, farms, and landfills. RNG is captured and cleaned, then transmitted through an existing natural gas infrastructure, allowing for use in the same applications, such as in-home heating, as regular natural gas.

The technology is currently in its infancy, with the Canadian Gas Association (CGA) reporting that 11 projects had been brought online by the end of 2017, producing enough energy for 55,000 homes. Canadian gas utilities, however, have big plans for RNG, with a target of 5% RNG blended into natural gas streams by 2025, and 10% by 2030. The CGA reports that achieving 10% uptake would eliminate 14 MT of GHG emissions – the equivalent of removing 3.1 million cars from the road.

Looking to gain a clearer picture of the economic potential of the renewable energy source, Montreal-based Énergir – the largest natural gas distributor in Quebec and sole distributor in Vermont – commissioned a study from Aviseo Consulting. Led by partners Alexandre Girard, Jean-Pierre Lessard, and François Rousseau-Clair, the Montreal-headquartered firm provides economic and strategy consulting services to a wide range of industries.

Renewable natural gas has potential to contribute $1.6 billion to Quebec GDP annually

The November study found that Quebec has the technical and economic potential – the proportion of organic waste than can be economically transformed into RNG under current market conditions – to replace two-thirds of currently distributed natural gas with RNG.

The report found the construction phase for RNG production centres in Quebec would have a massive impact. It would entail an estimated $20 billion in investments, would contribute approximately $8 billion to the province’s GDP, and would support more than 88,000 jobs. The construction phase, meanwhile, would also net the provincial and federal government $1.3 billion in income and other taxes.

After reaching peak production potential, Aviseo estimates that RNG would contribute $1.6 billion annually to Quebec's GDP, while supporting 15,000 direct and indirect jobs. The new industry would further generate $256 million in yearly tax revenues for Quebec and Ottawa.

“The numbers are clear: RNG production could be a strong economic driver for Québec and its impact would extend into the regions and municipalities and across industries," Benoit Longchamps, Aviseo senior manager, said.

Indeed, varied regions, not only Montreal and Quebec City, would benefit greatly, according to the report, because more than 70% of GDP from RNG would be generated in the regions where production facilities are located. RNG production would also have the added benefit of diversifying revenue sources in the agricultural and forestry sectors.

Aviseo’s report for Énergir also highlighted how RNG would strengthen the province’s circular economy, wherein resources are kept in use for as long as possible, extracting maximum value. The extraction of energy from landfills and other organic waste, then, is good news for the circular economy. Moreover, the leftover “digestate” from RNG production can be used as an agricultural fertilizer – and it’s odour-free!

"We were already aware of RNG's benefits for the environment and Québec's potential for producing RNG,” Sophie Brochu, president and CEO of Énergir, said. “Thanks to this study, we now know to what extent RNG could be profitable for all regions of Québec. The study confirms that Québec has everything it needs to build a RNG industry that creates quality jobs in Québec's regions."

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