BP & Clean Energy Form Joint Venture Around Renewable Natural Gas
CHICAGO — BP Products North America Inc., a subsidiary of BP plc, has finalized a joint venture with Clean Energy Fuels Corp. to develop, own and operate new renewable natural gas (RNG) projects at dairies and other agriculture facilities.
Each company will have 50 percent voting control in the joint venture, which is initially funded with $50 million previously provided by BP and $40 million from Clean Energy. The joint ventures anticipated adding preferred stock and debt to increase committed investment capital, according to the announcement. Clean Energy will serve as the operating partner.
"The expansion of our RNG portfolio aligns with BP's ambition to become a net zero company by 2050 or sooner and to help the world get to net zero," said Sean Reavis, senior vice president, BP low carbon trading. "We look forward to continuing our work with Clean Energy on exciting projects aimed at reducing the carbon intensity of our products and helping customers lower their carbon footprint."
The joint venture will produce RNG using methane captured from dairies' waste. Compared to conventional gasoline and diesel, RNG used as a transportation fuel has lower GHG emissions on a lifecycle basis. The California Air Resources Board has given similar projects a carbon intensity (CI) score of a weighted average of -317 compared to CI scores of 100 for conventional diesel fuel and 16 for electric batteries.
"The fact that we were able to work out the details of this joint venture so quickly after announcing our intent in December is a testament to the commitment of both companies to get more RNG into the marketplace," said Andrew J. Littlefair, president and CEO of Clean Energy. "Clean Energy continues to sign new RNG agreements with trucking companies, transit agencies and other transportation fleets all looking to reduce the carbon footprint of their operations. This joint venture will provide additional RNG going forward and enable us to expand that customer base."
Clean Energy is the largest provider of RNG as a transportation fuel in the United States and Canada as well as the largest RNG fuel provider under the California low-carbon fuel standard program. In 2018, it also established a joint RNG marketing agreement with BP.
With U.S. headquarters based in Chicago, BP plc is a global energy producer with operations in nearly 80 countries.