Landfill gas (LFG) sits awkwardly between legacy waste practice and low-carbon gas opportunity. Hundreds of sites already flare or use LFG for on-site power, but only a fraction upgrade it to pipeline-quality RNG. This brief unpacks when it makes economic sense to move from flaring or power-only to full RNG pipeline injection, and how that answer shifts between the US, Europe and emerging markets.
What You'll Learn
- 1. Landfill Gas Basics & Decline Curves
- 2. Project Archetypes: Flaring, Power-Only, RNG
- 3. Economics: Capex, Opex & LCOG
- 4. Pipeline Specs & Upgrading Chain
- 5. Regional Economics: US vs EU vs Emerging
- 6. Devil's Advocate: Risks & Failure Modes
- 7. Outlook to 2030: Role of LFG in RNG Supply
- 8. FAQ: Questions from Landfill Owners & Investors
1. Landfill Gas Basics & Decline Curves
LFG is produced as organic waste decomposes under anaerobic conditions. Its flow profile is governed by waste age, moisture, cover practices and gas collection efficiency:
- Newly active cells ramp up over several years.
- Closed landfills typically show a multi-year plateau followed by a long decline tail.
- Collection efficiency rarely exceeds 80–90% of generated gas in practice.
Illustrative Landfill Gas Flow Over Time
Typical indexed LFG flow for an active + then closed landfill cell over 25 years (collection-adjusted).
2. Project Archetypes: Flaring, Power-Only, RNG
From a commercial standpoint, three practical archetypes dominate:
Simplified Landfill Gas Utilisation Archetypes
| Archetype | Configuration | Main Revenue Source | Typical LCOG / Value | Comments |
|---|---|---|---|---|
| Compliance flare | Collection + enclosed flare | None (cost centre, avoids penalties) | - | Lowest capex, but no energy or RNG revenue. |
| Power-only | Engines/turbines + grid export | Electricity sales + sometimes green certificates | Value ˜ 30–45 €/MWh (electric) | Exposed to power prices and engine downtime. |
| RNG pipeline injection | Upgrading + compression + pipeline tie-in | RNG sales + credits (LCFS/RIN/GO etc.) | LCOG ˜ 40–70 €/MWh (gas) depending on credits | Highest capex and complexity, but can capture strong premiums. |
Many portfolios now benchmark LFG-to-RNG projects directly against anaerobic digestion-based biomethane plants, dedicated biogas upgrading investments, and the wider set of waste pathways summarised in the bio-economy & waste-to-X overview.
Indicative Value Capture by Utilisation Route
Illustrative comparison of value captured from the same LFG stream via flaring, power-only, or RNG.
3. Economics: Capex, Opex & LCOG
The move from power-only to RNG hinges on three economic questions:
- Is the incremental capex for upgrading and pipeline tie-in justified by higher RNG/credit prices?
- How will declining LFG flow affect utilisation of upgrading assets over time?
- Can the project access high-value credit schemes (e.g. LCFS, RINs, CI-driven premiums)?
Indicative Economics – Mid-Sized Landfill (US/Europe, 2025–2026)
| Metric | Power-Only Project | RNG Project |
|---|---|---|
| Capex (utilisation island only) | ~ €8–12 million | ~ €18–25 million |
| Specific opex | Moderate (engine O&M, parasitic load) | Higher (upgrading O&M, pipeline fees, monitoring) |
| Revenue stack | Electricity + possibly GOs | Base gas value + certificates/credits + sometimes manure/CI premiums |
| Equity IRR (illustrative) | 9–11% | 12–18% (in strong credit markets) |
IRR Sensitivity to RNG Price (Illustrative)
Indicative equity IRR for an RNG project across a range of realised RNG prices, compared to a power-only baseline.
4. Pipeline Specs & Upgrading Chain
To inject RNG into a gas grid, LFG must pass through several processing stages:
- Pre-treatment: removal of moisture, particulates, siloxanes and H2S.
- CO2 removal / upgrading: membranes, PSA or scrubbing technologies to reach grid CH4 targets.
- Compression & odorisation: aligning with pipeline pressure and odour standards.
- Quality monitoring: continuous measurement for oxygen, Wobbe index and contaminants.
The distance to pipeline and the need for pressure boosting can make or break a project. In some cases, virtual pipeline (trucked CNG) strategies can sidestep long, expensive grid connections.
5. Regional Economics: US vs EU vs Emerging
Not all LFG-to-RNG projects look alike from a regional perspective:
Regional RNG Project Archetypes from Landfills
| Region | Key Revenue Drivers | Typical Route | Comments |
|---|---|---|---|
| US (RIN/LCFS-heavy) | RINs, LCFS credits, base gas value | RNG into CNG/LNG transport or grid | Strong economics for high-CI reduction projects; policy risk on credit prices. |
| NW Europe | Feed-in tariffs/premiums, GOs, sometimes landfill gas mandates | RNG to grid or combined with CHP + grid injection | Moderate margins; emphasis on compliance and landfill phase-down. |
| Emerging markets | Power tariffs, occasional climate finance | Power-only or flare + small power | Limited RNG infrastructure; credit stacking often requires international mechanisms. |
Regional RNG Revenue Stack vs LCOG
Illustrative comparison of total RNG revenue and levelised cost of gas (LCOG) from LFG projects in different regions.
6. Devil's Advocate: Risks & Failure Modes
Despite strong headlines, not every LFG-to-RNG project reaches investment committee approval:
- Overstated gas potential: Using optimistic LFG generation models without adequate on-site measurement campaigns.
- Collection efficiency risk: Poorly designed wells and headers leading to much lower captured gas than assumed.
- Counterparty & policy risk: Heavy dependence on one credit scheme or offtaker with limited credit quality.
- Community concerns: Odour, truck traffic and historical issues with landfill management undermining project acceptance.
From a financiers perspective, the "perfect" LFG-to-RNG project is one where gas potential is proven, collection efficiency is demonstrably high, and revenue is diversified across base gas value and multiple credit sources.
7. Outlook to 2030: Role of LFG in RNG Supply
Looking towards 2030, we see LFG-to-RNG as a bridge resource rather than the ultimate backbone of RNG supply:
- Regulations are tightening on landfilling of organic waste, reducing long-term feedstock volumes.
- However, existing landfills will keep producing gas for decades, offering a near-term decarbonisation opportunity.
- High-credit markets will likely prioritise manure and high-CI mitigation projects, but LFG remains important for tackling legacy sites.
In most portfolios, LFG-derived RNG will be one of several pillars alongside agricultural AD, industrial biogas, and synthetic fuels, rather than the sole growth engine.