Divert, a company that provides food waste reduction technology and organics recycling services, announced sizable capital commitments and equity investments to scale its anaerobic digestion network.
The Massachusetts-based operator has secured a commitment from Enbridge, a major gas pipeline and energy company headquartered in Canada, to potentially invest $1 billion in new digester facilities that will create RNG. With this investment, Divert intends to reach “every major geographic region” in the U.S., with a goal of being “within 100 miles of 80% of the U.S. population in the next eight years,” according to the press release announcing the deal. Canadian facilities will also be considered. Divert told Reuters it expects to build as many as 30 new sites.
A spokesperson confirmed that Divert will manage and operate the facilities that Enbridge finances. They will be for Divert’s “exclusive use” and “will utilize Divert’s proprietary technologies, processes and operations teams.” Divert also confirmed the facilities will be “fully integrated,” rather than like its modular sites, and each one will have the capacity to process up to 100,000 tons of material per year.
Divert’s existing portfolio has at least 10 AD sites of varying sizes in operation or development. The company reports it now has nearly 5,400 retail stores customers and has contracted with more than 1,000 new accounts this year.
“The infrastructure development agreement with Enbridge marks a major turning point in the battle against the wasted food crisis,” said Ryan Begin, Divert’s CEO and co-founder, in a statement. “As one of North America's largest energy infrastructure companies, Enbridge will play a critical role in the continued development of our transformative technologies and infrastructure.”
Divert also announced $80 million in growth equity from Enbridge and $20 million from current investors, led by private equity firm Ara Partners. Enbridge will acquire a 10% stake in Divert as part of the deal, according to its own release. Ara acquired Divert in 2021 with $100 million in growth equity and remains the majority shareholder.
“Divert has emerged as a leader in creatively managing wasted food and our partnership aligns with Enbridge’s priorities in pioneering RNG as an effective solution to achieve net-zero greenhouse gas emissions,” said Caitlin Tessin, vice president of strategy and market innovation at Enbridge, in a statement.
Enbridge has set goals to reduce its emissions intensity 35% by 2030 and achieve “net zero” emissions by 2050. Renewable natural gas demand has grown in recent years due to ESG investment trends as well as state and federal regulatory incentives.
Divert announced an offtake agreement with BP worth an estimated $175 million last fall. The oil giant also sees big potential in RNG, following its $4.1 billion acquisition of landfill project developer Archaea. It will explore additional offtake options for the newly announced facilities with Enbridge, and Divert confirmed it will retain ownership of the RNG.