In the United States (US), Synthica Energy, LLC, an energy transition platform aimed to design, build, own, and operate large-scale, contracted anaerobic digestion (AD) facilities to convert pre-consumer organic waste into renewable natural gas (RNG), recently announced that it has closed on a large equity investment from the Infrastructure Business within Goldman Sachs Asset Management (Goldman Sachs).
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Although the financial terms of the deal were not disclosed, the new capital will help grow Synthica’s infrastructure projects and accelerate the development of its facilities in key target markets across the country, including Ohio (OH), Texas (TX), Georgia (GA), Kentucky (KY), and Louisiana (LA) in the near term.
Over the coming years, Synthica Energy also plans to develop clean energy facilities in Florida (FL), Illinois (IL), Missouri (MI), New York (NY), and Pennsylvania (PA).
Synthica’s mission is to provide a critical service for hard-to-process organic waste streams, divert these materials away from landfills and other non-sustainable disposal outlets, and ultimately reduce carbon and methane emissions. We are excited about partnering with Goldman Sachs since it will enable us to accelerate our project development pipeline, enhance our circular solutions for our customers, and supply RNG to meet the growing market demand, said Sam Schutte, CEO of Synthica Energy.
Solid business case
Founded in 2017, Synthica aims to produce RNG from pre-consumer food and beverage waste and other organic manufacturing byproducts.
Distinct from many existing RNG developers, who largely focus on dairy products from farms or mixed solid waste from landfills, Synthica’s infrastructure business model focuses on processing pre-consumer organic waste.
Synthica supports a green energy transition by aiming to provide a circular waste management solution at convenient facilities located a short drive away from city centers and repurpose pre-consumer organic waste, which might otherwise be disposed of in a landfill and contribute to greenhouse gas (GHG) emissions.
Through anaerobic digestion (AD), Synthica plans to convert this organic waste into valuable RNG that can be used for a variety of drop-in fuel purposes in place of fossil fuels and help customers or offtakers achieve their decarbonization targets and sustainability goals, including with respect to recycling and landfill diversion.
The company’s focus on pre-consumer organic waste gives Synthica access to a large and stable supply of input material from major food, beverage, and industrial manufacturers.
The company enters into contracts to accept customers’ waste as feedstock, providing a low-cost, proximate, sustainable alternative to landfill disposal. Unlike post-consumer waste, which can vary in supply and contamination levels, pre-consumer waste streams enable greater efficiency and consistency in the production of RNG.
Synthica will continue to be led by its co-founders, Sam Schutte and Grant Gibson. Mark Weidman, a recognized leader in the waste-to-energy sector, and former CEO of Wheelabrator Technologies Inc., will serve as executive chairman.
With this investment, we are aiming to take waste out of a one-way system and recycle it to generate renewable energy. Similar to our Verdalia investment in Europe focused on biomethane, we believe this sustainable process can provide dual benefits, helping businesses and municipalities beneficially reuse their organic waste and supplying the country’s utilities with RNG, critical for reducing their carbon footprints. We are thrilled about the opportunity to partner with Sam and Grant and leverage the capabilities and relationships of our firm to bring sustainable infrastructure solutions to cities across the United States, said Cedric Lucas, a Managing Director in the Infrastructure Business within Goldman Sachs Asset Management.
Rapid demand growth for RNG
Demand for RNG and other renewable resources in the U.S. is expected to grow rapidly for the foreseeable future, especially as utilities and manufacturers continue their efforts to achieve emissions reductions by decarbonizing their heating and power generation.
Synthica plans to sell its RNG production under offtake contracts with gas utilities, energy majors, and industrial purchasers.
Synthica recently broke ground on its first facility in Ohio (OH). The facility is expected to divert a significant amount of organic waste from local landfills and sewers each year, removing carbon dioxide (CO2) and methane (CH4) emissions from the atmosphere.
