BP purchases Clean Energy Fuel's RNG production assets for $155M
- BP has agreed to pay $155 million for Clean Energy Fuels' upstream biomethane production assets — which includes two facilities, shares of two additional facilities under construction and third party supply contracts for renewable natural gas — as reported by Reuters.
- Clean Energy will continue to operate these facilities as a subcontractor of BP and retain access to these RNG sources through a long-term supply contract.
- As part of the deal, Clean Energy will collect royalties on RNG purchased from BP and under the Redeem brand at filling stations. Clean Energy currently operates roughly 600 Redeem fueling stations around the U.S.
Clean Energy Fuels has become one the top creators of RNG from waste by teaming up with many of the industry's largest companies to tap into biogas at their landfills. Last year, the company sold 60 million gasoline gallon equivalents of fuel to companies such as Republic Services, UPS, Ryder and Kroger. Some of the production facilities being acquired by BP are located at landfills operated by Republic and Advanced Disposal. Clean Energy has also worked with Waste Management and Waste Pro, among others.
According to EPA data, 42 landfills currently have projects underway to convert biogas into various forms of RNG and there is potential to do the same at hundreds of additional sites. The growing interest in processing food scraps at new anaerobic digestion facilities or co-digesting them at existing ones is also helping to drive the RNG expansion. In addition to state and local diversion policies, lucrative federal credits under the Renewable Fuel Standard have been a big driver for this industry.
Pending regulatory approval, this deal with BP will be the latest step in a slow shift by major energy companies away from traditional petroleum products toward more renewable fuels. Though it isn't often thought of when looking at the future of renewable energy in the U.S. the waste industry is clearly becoming a bigger part of that conversation.
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