Divert
- Canadian gas company Enbridge pledged up to $1 billion to a US firm turning food waste into energy.
- Energy made from waste can displace fossil fuels, but its climate benefits are debated.
- Sierra Club said Enbridge's pledge is "textbook greenwashing" because the company is expanding gas.
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Oil and gas companies see a green opportunity from food waste like rotting spinach but some climate advocates say it's more like greenwashing.
The Canadian pipeline operator Enbridge said it would invest up to $1 billion to Divert, a US tech company founded 15 years ago that turns food waste from thousands of grocery stores into renewable natural gas, or RNG.
Divert plans to expand its food waste-to-RNG operations across the US over the next eight years, said CEO and cofounder Ryan Begin. The company's software tracks retailers' food waste and Divert then recovers what can be donated to food banks. The company funnels the rest into its anaerobic digesters to create energy. The plan is to build 30 plants, enough to manage 5% of US food waste; Divert now handles about a half percent.
"We're hyper focused on reducing food waste," Begin said. "Enbridge is focused on the energy transition and RNG is a powerful way to get there."
Making gas from waste can avoid greenhouse gas emissions that seep out of landfills. The RNG can then displace fossil fuels in cars, trucks, and electric power markets, but some climate advocates aren't convinced. After all, RNG is still primarily methane, which has up to 80 times the global warming power of carbon dioxide.
"We can't keep burning gas if we're going to meet global climate targets," said Cara Bottorff, managing senior analyst for the Sierra Club. "Research by the gas industry itself shows that RNG can only meet a small fraction of gas demand. It's also a very costly way to come up with an energy source. We already have a cheaper solution that's proven: electrification."
An analysis by the World Resources Institute, a research nonprofit, found that RNG made from food waste or landfills and manure pits that weren't already controlling methane had promising climate benefits. While RNG can't displace enough fossil fuels to meet long-term climate goals, it can play a "significant complementary role" by replacing gas in heavy-duty trucking, heating for existing buildings and other hard-to-decarbonize industries.
Bottorff said Enbridge's investment in Divert is "textbook greenwashing" because it represents a small portion of Enbridge's business.
Enbridge's latest financial report shows it's secured $7.5 billion in gas-expansion projects through 2028, including pipelines and terminals to boost exports to Europe and Asia. About $2.5 billion is secured in offshore wind power in France through 2025, and the company has invested in dozens of onshore wind and solar projects.
Jon Harding, a spokesperson for Enbridge, told Insider in an email that the company plans to invest closer to $4 billion in renewables and low-carbon solutions through 2025.
During an investor call Wednesday, Enbridge officials emphasized that while they plan to pursue lower-carbon strategies, gas will still be needed for decades to come for heavy industry and to help move away from coal, which is dirtier than gas.
Enbridge also asked Ontario regulators to approve rate hikes on its customers to fund a $16 billion expansion of gas pipelines across the province. The company aims to achieve net-zero emissions by 2050, but that target only applies to its own operations, not the oil and gas burned by its customers. Enbridge reported that those so-called Scope 3 emissions account for the majority of its emissions.
Caitlin Tessin, Enbridge's vice president of strategy and market innovation, told Insider the company is working within its supply chain to lower Scope 3 emissions. She added that the company wants to keep its infrastructure in use and is trying to decarbonize the system as much as possible.
"Diverting food waste from a landfill and putting it in a digester is absolutely more environmentally friendly and has a lower carbon intensity than most fuels," she said.
Divert
Divert, for its part, said that its expansion once completed could avert 400,000 metric tons of carbon dioxide emissions a year, based on a third-party life cycle assessment of its current operations. That's the equivalent of driving more than 86,000 gas-powered cars for a year, according to the EPA.
There's no doubt the RNG sector is gaining some ground. States like California, Washington and Oregon, along with Europe, subsidize its production through their climate policies – making it an attractive play for fossil fuel companies.
BP acquired Archaea Energy for $4.1 billion, which has 50 landfill-to-gas sites in the US, and Shell plans to acquire the Denmark-based Nature Energy for $2 billion. Kinder Morgan, the largest gas pipeline company in North America, also plans to invest $1.1 billion in RNG by 2024.
Asset management giant BlackRock also acquired RNG producer Vanguard for $700 million.