TotalEnergies, a global energy company, and Vanguard Renewables, a leading U.S. company in turning organic waste into renewable natural gas, have made a deal to create a joint venture to develop, construct, and manage Farm Powered® renewable natural gas (RNG) projects in America. The agreement was signed in New York on April 12th 2024, with the presence of Patrick Pouyanné, Chairman and CEO of TotalEnergies, and Larry Fink, Chairman and CEO of BlackRock.
TotalEnergies and Vanguard Renewables will move forward with 10 RNG projects in the next year, with a total annual RNG capacity of 0.8 TWh (2.5 Bcf). The initial three projects in this agreement are currently being built in Wisconsin and Virginia, each with a unit capacity of nearly 75 GWh (0.25 Bcf) of RNG per year.
In addition to these first 10 projects, the partners will consider joint investment in a potential pipeline of about 60 projects across the country, with a total capacity of 5 TWh (15 Bcf) per year.
“TotalEnergies is excited to collaborate with BlackRock and its portfolio company Vanguard Renewables to speed up the transformation of food waste into renewable natural gas in the U.S. By expanding into this rapidly growing market, our joint venture will create value for both companies and benefit the food and farming sectors, as well as provide a convenient solution to industrial companies wanting to reduce the carbon footprint of their energy supply. This joint endeavor marks a new milestone for TotalEnergies in achieving its goal of producing 10 TWh of renewable natural gas by 2030.” said Olivier Guerrini, Vice President, Biogas at TotalEnergies.
Vanguard Renewables, a major player in the RNG industry in the U.S.
Based near Boston, Massachusetts, Vanguard Renewables was established in 2014 and currently has around 260 employees. The company currently operates 17 facilities that convert organics into renewable energy, with an annual capacity of more than 440 GWh (1.5 Bcf) of RNG. Looking past 2024, Vanguard Renewables plans to launch over 100 RNG projects by the end of 2028.
In July 2022, BlackRock acquired Vanguard Renewables through one of its investment funds. BlackRock has joined forces with Vanguard Renewables' management team to build on the company's strong track record and drive its growth for the nationwide expansion of its anaerobic digester projects from one coast to the other. BlackRock will remain the majority shareholder of Vanguard Renewables.
“We are excited to have TotalEnergies as a strategic partner, expanding on our mission of developing farm-based organic-waste-to-renewable natural gas projects across the U.S. This collaboration validates Vanguard's strong position in the RNG sector in the U.S. and combines our expertise with TotalEnergies' extensive experience in large-scale energy development, safety protocols, and global partnerships. These 10 RNG projects, jointly undertaken by TotalEnergies and Vanguard Renewables as co-investment partners, further confirm our commitment and ability to deliver on our mission of utilizing waste to reduce the carbon footprint of our planet.” stated Neil H. Smith, CEO at Vanguard Renewables.
TotalEnergies and Vanguard Renewables have a strong partnership
The joint-venture will benefit from the expertise of both companies:
- Vanguard Renewables, with its experienced teams and development platform, will contribute its ready-to-build projects at scale to the JV. It will also manage feedstock supply, assets, operations, and sales of renewable natural gas.
- TotalEnergies' strong position in the European market, especially in France and Poland, will be utilized in the JV. They will provide technical support on the design and engineering of the facilities, and on the plant’s operational performance.
TotalEnergies and Vanguard Renewables will sell the RNG through long-term purchase agreements with buyers actively engaged in decarbonizing their industrial processes.
“TotalEnergies’ global experience in scaling and operating renewable gas assets will be combined with Vanguard Renewables’ market-leading position in the United States, extensive operational history and customer relationships, and robust project portfolio in this partnership.”, said Doug Vaccari, Managing Director, Diversified Infrastructure, BlackRock.
Converting food waste and reducing the carbon footprint of major US brands
The first 10 projects involve waste materials recovery from the food and beverage industries, along with dairy manure from dairy farms. The anaerobic digesters will be built on the dairy farms themselves, and will recover and manage the digestate as a low-carbon and nutrient dense fertilizer.
Vanguard Renewables has established a major network of leading food industry brands across the US and the groundbreaking Farm Powered Strategic Alliance to feed its digesters. This Alliance gives members preferred access to recycle their organic waste and potentially purchase the renewable energy generated at a Vanguard Renewables’ facility. The members include leading food, beverage, and pharmaceutical manufacturers.
In anticipation of the Company’s growing portfolio of anaerobic digesters, Vanguard Renewables has expanded its food and beverage diversion services and its organics solutions team to provide service throughout the contiguous United States.
The transaction completion is subject to customary conditions precedent.
