Energy giant Chevron announced a joint investment with biomethane company CalBio aimed at backing a project to produce and market dairy biomethane as a renewable natural gas (RNG) transportation fuel in California.

Founded in 2006, CalBio develops dairy digesters to renewable energy and vehicle fuel. The company helps dairy farmers to build digesters and methane capture projects to convert methane released from manure storage to RNG. The process is considered carbon negative on a lifecycle basis under California’s Low Carbon Fuel Standard.

The agreement follows Chevron’s announcement from September 2021 of plans to commit $10 billion for investments in its low carbon businesses, targeting key areas including renewable fuels, hydrogen, and greenhouse gas reduction projects, among others. The company’s 2030 targets for its energy businesses also include achieving renewable fuels production capacity of 100,000 barrels per day.

Andy Walz, President of Americas Fuels & Lubricants for Chevron, said:

“We are excited to continue our partnership with CalBio and work with local communities and farmers to develop lower carbon fuel solutions. 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.”

Under the new agreement, Chevron will provide additional funding for as many as seven digesters and one central upgrading facility across a cluster of dairy farms in California’s Merced County. The cluster of digesters has been awarded California Department of Food and Agriculture grants, which must be augmented with additional capital to complete the projects.

Upon project completion, expected next year, Chevron will take 100% of the renewable natural gas produced to market in the California vehicle fuels market.

Neil Black, President of CalBio, said:

“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. These projects are also benefiting the local community through job creation and protecting local air and water quality.”