Scaling North American Renewable Natural Gas: Outlook to 2035 Highlights Policy Momentum and Feedstock Evolution

Key Takeaways

• North American Renewable Natural Gas (RNG) production continues to expand, led by nearly 300 registered pathways across major North American Clean Fuels Markets.
• Landfill gas remains the primary feedstock, but food and agricultural waste are rising in prominence, particularly in Canada.
• RNG project economics are primarily driven by incentive stacking — with California LCFS, U.S. RFS, and Section 45Z leading in the United States(U.S.), and the CFR and provincial mandates active in Canada.
• U.S. demand remains transport-focused, while Canada sees more balanced growth across thermal, electricity, and mobility end uses, with thermal applications dominating at ~10 million MMBTU
• Under accelerated policy adoption, RNG could see faster scale-up, with thermal and electricity applications capturing a larger share of future demand.

On 9th September 2025, cCarbon hosted its latest webinar previewing its Insight Report on North American RNG Outlook 2035, drawing on proprietary facility-level data, policy modelling, and tracking of more than 600 RNG projects. The presentation highlighted evolving market dynamics, regulatory frameworks, and growth potential across the U.S. and Canada.

Market Overview

The North American RNG market has grown sharply over the past five years. In the U.S., RNG volumes used in transportation under the California LCFS program reached 29.2 million MMBTU in 2024 from 15.5 million MMBTU in 2018. Canada’s RNG volumes grew at over 33% annually since 2018, with 2024 marking a sharp step-change in production. British Columbia held the lead in RNG production followed by Quebec, Alberta, and Ontario. Market value growth has been equally impressive: the U.S. RNG market increased from $458 million in 2018 to $2.4 billion in 2024, along with steady growth in Canada over the same period. Landfill gas remains the foundation of current supply — accounting for around two-thirds of production — but dairy, swine, and food waste-based projects are expanding their share, particularly as utilities and voluntary buyers look to source lower-carbon gas.

Policy Drivers and Incentives

The policy ecosystem underpinning RNG growth in the transportation sector spans U.S. and Canadian clean fuel standards. RNG projects can generate revenues from the LCFS, RFS (D3 RINs), and now the 45Z Clean Fuel Production Credit, which is set to begin in 2025. In Canada, blending targets — such as FortisBC’s 15% RNG goal by 2030 and Quebec’s RNG blend mandate, provide visibility for developers, while the federal Clean Fuel Regulations create additional crediting opportunities for RNG in transport.

By 2029, RFS incentives along with Section 45Z tax credit are projected to generate a combined annual support of over $7 billion in incentives for RNG. These programs are enabling project developers to “stack” revenue streams.

Feedstocks and Utilization

In the U.S., landfill gas dominates, with utilization rates expected to rise from 35% in 2025 to over 40% by 2030. Agricultural waste remains stable at ~30 million MMBtu, while food waste and wastewater gain ground slowly. In Canada, utilization rates for RNG are projected to stand at ~17% for landfill and ~10% for agricultural feedstock by 2030 — remain lower than in the U.S., indicating untapped potential.

End-Use Diversification

While U.S. RNG demand is still dominated by the transportation sector, emerging use cases include electricity generation and hydrogen production. In Canada, about 50% of RNG currently goes to the thermal sector, with transport and electricity representing growing segments. A more diversified demand profile reflects provincial policy design and utility procurement targets.

Outlook to 2035

cCarbon’s baseline forecast suggests that U.S. RNG production will continue to expand through 2030, with transportation as the dominant end-use and thermal and electricity applications gradually increasing. In Canada, transportation demand stabilizes while thermal applications grow in relative importance by 2035. An accelerated scenario, assuming broader policy adoption and higher utilization, indicates stronger overall output and a larger role for non-transportation uses.

Challenges and Industry Sentiment

Market conversations underpinning the research presented highlighted persistent challenges: project economics remain heavily reliant on policy incentives, and infrastructure is still underutilized. Dairy RNG projects, supported by negative CI scoring from avoided methane crediting, stand out as resilient.  The webinar also highlighted the need for greater policy certainty to support long-term investment.

During the webinar, participants were asked which policy they believed would have the greatest impact on U.S. RNG market development through 2030. The results highlighted the growing importance of utility-driven demand, with thermal RNG mandates for gas utilities receiving the highest share of responses. Expanding state-level LCFS programs also ranked highly, while federal incentives such as Section 45Z credits were seen as important but secondary. By contrast, California’s 2030 avoided methane crediting phase-out was viewed as less influential in shaping the market’s trajectory.

cCarbon North American RNG Webinar Poll Results

Conclusion

The RNG sector is transitioning from niche to mainstream, with strong policy tailwinds and rapid market expansion. North America’s RNG market is entering a new phase of maturity — marked by diversified feedstocks, expanding applications, and growing policy alignment. But the sector’s trajectory remains tied to regulatory certainty and continued investment in infrastructure and certification systems. With the right conditions, RNG can play a strategic role in the energy transition through 2035 and beyond. The next decade will test whether incentive frameworks, feedstock utilization, and infrastructure deployment can keep pace with demand.

cCarbon’s North American RNG Outlook 2035 will provide full datasets and modeling, offering stakeholders a granular view of production, demand, and incentive values through 2035.

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North American Renewable Natural Gas Outlook 2035 | Insight Report | September 2025