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Recent BP and Shell Acquisitions Signal Growing Interest in Renewable Natural Gas

Posted by | Rauf Mammadov

Two significant acquisitions have recently taken place in the renewable natural gas (RNG) market. BP acquired U.S.-based RNG company Archaea in October 2022, followed by Shell’s acquisition of Europe’s largest RNG producer, Nature Energy, at the beginning of 2023. These deals have made BP and Shell the largest players in the RNG market as Archaea and Nature Energy, together with Clean Energy Fuels, control 30% of the RNG market.

Global development of RNG

The RNG market has developed unevenly worldwide, with Europe, China, and the United States accounting for 90% of global production, mainly thanks to strong state support for the biogas industry. By acquiring Archaea and Nature Energy, respectively, BP and Shell have complemented their growing RNG portfolios in two of these rapidly growing markets—Europe and North America.  Shell already has one operating RNG plant in Junction City, Oregon, and three plants in the development stage. Meanwhile, for BP, it is the third significant investment in the RNG segment. In 2021, BP acquired 28.7% of the UK’s largest biomethane producer, Gasrec, and created a JV with the U.S.-based Clean Energy Fuels.

Advantages of RNG

These deals indicate a growing interest by oil and gas companies in RNG, which has several advantages over other renewable fuels. When purified, RNG or biogas can be interchangeably used with fossil fuel-based natural gas, which facilitates relatively easy integration of RNG assets into their existing natural gas infrastructure.

Contribution of Global Energy Companies in the RNG Market

RNG is one of the fastest-growing renewable fuel segments along with renewable diesel and sustainable aviation fuel, but the global RNG market remains largely fragmented. The active participation of global energy companies such as BP and Shell in the RNG industry can contribute to the globalization of the RNG market and, by doing so, contribute to the global efforts to reduce GHG emissions.


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