France-based energy giant Total Energies and BlackRock portfolio company Vanguard Renewables announced today an agreement to create a new joint venture to develop, projects to turn food biowaste into renewable natural gas (RNG) in the U.S.
RNG, or biomethane, is produced from organic waste, such as agricultural, industrial, and household wastes, and is chemically identical to fossil-based natural gas, enabling it to support the decarbonization of hard-to-abate sectors such as road transport and heavy industry, without needing to replace existing transmission and distribution infrastructure.
Founded in 2014, Massachusetts-based Vanguard Renewables develops and operates anaerobic digesters to convert energy from organic waste material into renewable natural gas, mitigating climate change and reducing reliance on fossil fuels. The company currently operates 17 organics-to-renewable energy facilities with an annual capacity of more than 440 GWh (1.5 Bcf) of RNG, and plans to commission over 100 RNG projects by the end of 2028.
BlackRock’s Diversified Infrastructure business acquired Vanguard Renewables in 2022, in a deal reportedly valuing the company at $700 million, and with plans to invest up to another $1 billion to finance the company’s expansion.
Doug Vaccari, Managing Director, Diversified Infrastructure at BlackRock, said:
“This exciting partnership brings together TotalEnergies’ global experience in scaling and operating renewable gas assets with Vanguard Renewables’ market-leading position in the United States, extensive operational history and customer relationships, and robust project portfolio. With TotalEnergies as a strategic partner, Vanguard Renewables will be positioned to achieve even stronger growth and continued success.”
Under the new JV, the companies plan to advance 10 RNG projects into construction over the next 12 months, with a total annual RNG capacity of 0.8 TWh (2.5 Bcf). The first projects, based on a model of waste materials recovery from the food and beverage industries, will include anaerobic digesters to be built on dairy farms that will recover and manage the digestate (a byproduct of the anaerobic digestion process) as a low-carbon and nutrient dense fertilizer.
Three initial projects are currently under construction in Wisconsin and Virginia, each with a unit capacity of nearly 75 GWh (0.25 Bcf) of RNG per year. Beyond the first 10 projects, the partners will consider investing together in a potential pipeline of about 60 projects across the country for a total capacity of 5 TWh (15 Bcf) per year.
Neil H. Smith, Chief Executive Officer at Vanguard Renewables, said:
“We are thrilled to welcome TotalEnergies as a strategic partner, building on our mission of developing farm-based organics-to-renewable natural gas projects across the United States. This collaboration validates Vanguard’s leadership position in the RNG space in the U.S. and brings together our expertise with TotalEnergies’ extensive experience in large-scale energy development, safety procedures, and global partnerships.”
TotalEnergies has set a goal to produce 10 TWh of biomethane by 2030, equivalent to reducing CO2 emissions by approximately 4 million tons. The company’s biogas capacity in Europe is currently 1.1 TWh, and the company said that it aims to expand in the international market through partnerships.
Olivier Guerrini, Vice President, Biogas at TotalEnergies said:
“TotalEnergies is pleased to partner with BlackRock and its portfolio company Vanguard Renewables, to accelerate the development of food biowaste processing into renewable natural gas in the United States. By expanding into this fast-growing market, our joint venture will create value for both companies while benefiting the food and farming sectors as well as providing a ready-to-use solution to industrial companies willing to decarbonize their energy supply. This joint venture is a new step for TotalEnergies in achieving its objective to produce 10 TWh of renewable natural gas by 2030.”