Bioenergy with carbon capture and sequestration (BECCS) is critical for stringent climate change mitigation but is commercially and technologically immature and resource intensive. State and federal fuel and climate policies can drive first markets for BECCS in California. We develop a spatially explicit optimization model to assess niche markets for renewable natural gas (RNG) production with carbon capture and sequestration (CCS) from waste biomass in California. Existing biomass residues produce biogas and RNG and enable low-cost CCS through the upgrading process and CO2 truck transport. Under current state and federal policy incentives, RNG-CCS can avoid 12.4 mmtCO2e/year (3% of California’s 2018 CO2 emissions), of which 2.9 mmtCO2/year are captured and sequestered. It simultaneously produces 93 PJ RNG/year (4% of California’s 2018 natural gas demand) with a profit maximizing objective, resulting in profits of $11/GJ. Distributed RNG production with CCS can potentially catalyze markets and technologies for CO2 capture, transport, and storage in California.