Toyota Tsusho America, Inc. ("TAI") announced today that it had completed investment in Merced Pipeline LLC ("Merced Pipeline") which produces and sells renewable natural gas (RNG) from dairy manure in April 2021. Production and test run are scheduled to start in the latter half of July 2021 towards commercialization at the beginning of 2022.

The United States, which has returned to the Paris Agreement, seeks to reduce greenhouse gas (“GHG“) emission by 50% to 52% of the level in 2005 by 2030, and achieve carbon neutrality by 2050. Looking at the proportion of GHG emissions by business sector, GHG emissions reduction and the use of renewable energy are required in each field, such as the transportation sector including ports which makes up 29%*1 and agriculture which makes up 10%*1. Facing the problem of air pollution caused by GHG emissions, the California State Government is promoting an initiative for reducing environmental burden with its active regulation reforms and supports. Under the initiative, the Ports of Los Angeles and Long Beach are implementing a plan to achieve zero GHG emission from port equipment in the Ports by 2030 and the State Government created a carbon credit system*2 that encourages RNG production from dairy farming.

Partnering 15 dairy farms in California, Merced Pipeline undertakes the business of collecting biogas generated from dairy manure before it is released into the atmosphere, refining it into methane gas, then supplying it as RNG through existing natural gas pipelines. Hydrogen production from natural gas including RNG using methane steam reforming is highly efficient and widely used.

Through investing in Merced Pipeline, TAI aims to build a value chain for the local production of hydrogen from RNG for local consumption. At the same time, TAI plans to actively support zero emission efforts at ports based on findings and experiences from its project to introduce hydrogen fuel cells to power port equipment that started at the Port of Los Angeles in September 2020. This business seeks to solve the common issue of GHG emissions faced by the agricultural and transportation sectors, and at the same time, contribute to the local circular economy.

The Toyota Tsusho Group will contribute to the transition to a decarbonized society by accelerating businesses that contribute to reduction of GHG throughout the industrial life cycle and promoting initiatives for carbon neutrality.

*1 Source: United States Environmental Protection Agency
https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks

*2 State of California’s carbon credit system
Low Carbon Fuel Standard: A system that targets fuel sources for automobiles and recognizes GHG emission reduction and absorption as credits.
https://ww2.arb.ca.gov/our-work/programs/low-carbon-fuel-standard

Reference
・ “Toyota Tsusho to Conduct Feasibility Study into Local Production for Local Consumption of Hydrogen - Seeking to use fuel cells to large-scale machinery at the Port of Los Angeles -” dated October 14, 2020.
https://www.toyota-tsusho.com/english/press/detail/201014_004696.html