Clean Energy Fuels Corp has finalized a joint venture (JV) with BP Products North America Inc, a subsidiary of BP p.l.c. to develop, own and operate new renewable natural gas (RNG) projects at dairies and other agriculture facilities.
Each company will retain 50% voting control in the JV, which will be initially funded with $50 million previously provided by bp and another $30 million from Clean Energy. The JV anticipates adding preferred stock and debt to increase committed investment capital. Clean Energy will be the operating partner.
The JV will produce RNG using methane captured from dairies’ waste. RNG is used as a transportation fuel and has lower GHG emissions on a lifecycle basis when compared to conventional gasoline and diesel. The California Air Resources Board (CARB) 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 demand for RNG has significantly accelerated over the last few years with some of the largest heavy-duty fleets in the world such as UPS, Republic Services, New York Metropolitan Transportation Authority and LA Metro, successfully operating tens of thousands of vehicles on RNG.
Andrew J. Littlefair, CEO and President of Clean Energy: “The fact that we were able to work out the details of this JV so quickly after announcing our intent in December is a testament to the commitment of both companies to get more RNG into the marketplace. 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 JV will provide additional RNG going forward and enable us to expand that customer base.”
Sean Reavis, Senior Vice President, bp low carbon trading: “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. 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.”