Dive Brief:
- Vanguard Renewables is positioning itself to have a portfolio of 100 anaerobic digestion facilities by the end of 2028 after having brought 32 sites under its management in its first decade of existence. The goal is supported by BlackRock’s acquisition of the company in 2022 and a growing number of agreements with private partners.
- Vanguard Renewables is marking its 10-year anniversary with a nod to its own expansion. The company currently plans to build “more than 10” new digestion facilities this year in four states, and it already operates multiple facilities in eight states. Vanguard’s pipeline includes 68 projects in varying stages of development, according to a release.
- The company is growing “like a traditional waste company” by building a connected network of facilities from the Northeast to the Midwest and soon the South, said John Hanselman, founder and chief strategy officer of the company. “We prefer to move like an amoeba. As we're starting in any one given market, we're really looking at the next marketplace that we can evolve to that is all within hauling distances,” he said.
Dive Insight:
Vanguard is incorporating lessons learned over the past 10 years about building a self-supporting network of facilities as it leans into new geographies and bigger partners. That’s been particularly important as the company continues negotiating organic waste offtake agreements with food and beverage companies, where scale can be an asset, Hanselman said.
“If you're a national food manufacturer, you can't say, 'These cans were made with recycled aluminum and the energy from our recycled food waste, but those cans weren't.' You have to be able to say every product we make is somewhere in this circularity and fits in with our overall mission as a food manufacturer to be circular,” he noted.
Achieving that scale can be tricky. Hanselman noted that when Vanguard began in 2014, many digestion companies only operated one or two facilities, but the capital-intensive nature of such projects have made them difficult to finance and operate. To outgrow that model, Vanguard first expanded its agricultural operations with multiple farms and took advantage of the low-carbon fuels credit marketplace that emerged alongside the company’s rise.
Today, the company benefits greatly from the backing of BlackRock, which acquired Vanguard in 2022. Vanguard is also now accelerating its growth via gas offtake agreements with partners like Astra-Zeneca, which last year inked one of the largest voluntary RNG agreements in the U.S. with Vanguard.
“It was interesting, because there’s no way that we would have programmed our growth this way. It was completely the luck of the draw that California enacted the LCFS, and we responded by doing this rapid growth with Dominion Energy,” Hanselman said. “Had we not done that, I don't think we would be the correct partner for a lot of our food manufacturers.”
Hanselman said there have been other business shifts as well. Due to the complex nature of carbon credit opportunities, Vanguard now does “a lot” of carbon consulting with prospective buyers to help them make sense of the gas and certification procedures, Hanselman said.
That debate has also evolved over the course of Vanguard's existence. Hanselman noted that when the company was first getting started, the focus from the LCFS market was on transitional fuels for road vehicle fleets, but now new applications like sustainable aviation fuel, green hydrogen, maritime methanol and other fuels are growing markets.
“We're in the first inning of the carbon intensities game. We're probably at the first at-bat in the first inning,” Hanselman said.
Going forward, Hanselman predicts agreements like the one with Astra-Zeneca will become more common — he said two similarly sized deals could close as soon as in the second quarter of this year, with more on the way.
He predicts a healthy market for RNG will continue to fuel the company's growth, as Vanguard is securing deals now for projects that may not deliver until 2027 or later.
“Our customers have such a specific need for decarbonization that they're like, ‘Great, don't worry about it. We'll make our reservation today for that gas in '26 or '27,’” Hanselman said. “We're actually getting commitments on gas today that we won't deliver for two years, just because there's such a shortage of it.”
