On December 28, bp closed out 2022 with the acquisition of Archaea Energy, a leading provider of renewable natural gas (RNG), marking a significant milestone in the expansion of bp’s strategic bioenergy business. With the close of the agreement, Archaea common shares will cease to be listed on the NYSE.
Chairman and president of bp America, Dave Lawler, stated, “We see enormous opportunity to grow our bioenergy business by bringing Archaea fully into bp. The talent, expertise and passion of their team has let them achieve incredible growth so far, and we’re excited to support the next chapter in line with our strategy.”
With this acquisition, Archaea increases bp’s market share in the US biogas sector, improving its capacity to support customers’ decarbonization initiatives and advancing its goal to lower the typical lifecycle carbon intensity of the energy products it sells. Bioenergy is one of five strategic transition growth engines that bp plans to rapidly expand over the next decade. bp expects investment in transition growth businesses to account for more than 40% of total annual capital expenditure by 2025, with a goal of increasing this to around 50% by 2030.
The market, which is anticipated to reach $61 billion by 2031, is being driven by increased usage of biogas in electricity generation, car fuel, and heating. According to the International Energy Association, It is unrealistic to think about the future of biogas and biomethane in isolation from the larger context of the global energy system. The rate of technical advancement, the goal of energy policy, market dynamics, societal trends, and many other factors all influence the potential future of global energy production and consumption.
According to the American Biogas Council, in the United States, there are more than 2,300 locations producing biogas across all 50 states, including 316 farms with anaerobic digesters, 1,269 water resource recovery facilities using anaerobic digesters (of which, 860 currently use the biogas they produce), 66 food waste digestion systems operating independently, and 652 landfill gas projects. For example, Germany has about 10,000 active digesters, and as a result, certain villages there are effectively fossil fuel-free.
The U.S. biogas business has significant potential for expansion. Currently, there are 14,958 new sites that are ready for development. These include 8,574 dairy, poultry, and swine farms, 3,878 water resource recovery facilities (including about 380 that produce biogas but do not use it), 2,036 food scrap-only systems, and using the gas at 415 landfills that currently flare it. If fully realized, these new biogas systems could generate 103 trillion kilowatt hours of electricity annually and reduce emissions equal to taking 117 million passenger vehicles off the road, according to an assessment made with the USDA, EPA, and DOE as part of the Federal Biogas Opportunities Roadmap and data from ABC.
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