Switzerland-headed VARO Energy Marketing AG (VARO) has announced that it has acquired 80 percent of the shares in one of the largest biogas producers in Europe.
According to a statement, VARO is acquiring an 80 percent stake in the Netherlands-based Bio Energy Coevorden BV (BEC) by acquiring shares from the existing shareholders – STAK Grisbe who will continue to own 15 percent of the business, and Van Drie Group, who will continue to own 5 percent.
The transaction, the value of which has not been disclosed, is expected to be completed in February 2023. BEC will be run on an independent basis.
Last year we set out our ambitious ONE VARO Transformation strategy to be the partner of choice for customers in the energy transition and to be net zero by 2040. Today’s announcement is a significant step towards accelerating our strategy by building a leading position in biogas in Europe, said Dev Sanyal, CEO of VARO.
BEC has ambitious plans to meet the increased demand for green gas and other sustainable fuels and energy sources in the Netherlands.
Major investments still need to be made to increase the production of green gas to 100 million Nm3 per annum made possible thanks to the entry of a large and financially strong partner.
Niek Jacobs, Director of BEC, is happy with the new set-up.
This allows us to achieve our objectives more quickly and we remain directly involved with the company as a family, said Niek Jacobs.
Transaction highlights include:
- Developing the largest biogas manufacturing facility in Northern Europe, double the current facility capacity from 300 GWh to 650 GWh by 2026. After the expansion, the BEC site will be among the three largest biogas facilities in Europe.
- High impact on GHG emissions with feedstock from waste streams and manure, achieving 220 000 tonnes per year of carbon dioxide (CO2) reduction versus fossil natural gas. A step towards achieving net zero Scope 3 emissions by the 2040 target.
- Supports circular economy and new employment opportunities accessing rapid growth market. It is ideally located on the border between The Netherlands and Germany, close to major industrial centers and large-scale agriculture offering both feedstock supply and demand growth. This investment will accelerate the energy transition in these leading countries.
- BEC has built a successful, highly efficient, cost-competitive industrial biogas facility, including state-of-the-art monitoring and control systems, heat optimization, and recovery systems.
- Building integrated fuel value chain: leverages BEC’s large-scale manufacturing competencies with VARO’s integrated business model of energy sourcing, production, and exposure management, while building one of the largest biogas manufacturing facilities in Europe.
- Supports energy security and energy transition by boosting energy security by diversifying Europe’s sources of supply while accelerating the energy transition by replacing conventional fuels with low-carbon alternatives.
- Progress against VARO’s new strategy and meets 65 percent of VARO’s 2026 target of 1 TWh of biomethane/bioLNG under its ONE VARO Transformation strategy launched in July 2022. The acquisition will have a substantial contribution of 20-25 percent of VARO’s Engine 2 (Renewable energies) EBITDA by 2026 and creates a platform for future growth in the biogas industry in Europe.
Aligned with Transformation strategy
The transaction accelerates the ONE VARO Transformation strategy launched in July 2022. VARO recognizes that a range of solutions and products are needed to help emitters to decarbonize and to protect Europe’s energy security.
As part of the strategy, the company committed to becoming a leading producer of biogas in Europe, building its portfolio through both acquisition and greenfield developments.
The combination of this platform along with VARO’s integrated business model will not only contribute to our strategic growth but will also be highly value accretive to VARO. Large-scale biogas facilities have an important role in accelerating Europe’s energy transition – offering an alternative to conventional fuels at scale with emissions 90 percent lower than natural gas as well as allowing our refineries to replace their natural gas consumption with biomethane products with a lower carbon intensity. Growth in biogas will further support Europe’s energy security by diversifying supply, said Dev Sanyal.
Important role
Europe is an attractive market for biogas, benefitting from high domestic feedstock availability, as well as supportive Government policy and incentive structures.
According to VARO, biogas has an important role to play in providing customers in harder–to-abate sectors such as heavy-duty transportation and shipping with a cost-competitive and low-carbon fuel supply.
It also plays an important role in the decarbonization of the agricultural sector and contributes to a circular economy,
As a result of this acquisition, the largest by VARO since 2015, and with VARO’s and BEC’s ongoing investment, the company is well placed to meet growth in European demand for both biomethane, which is expected to increase threefold by 2030 across Europe, and bioLNG, which is expected to grow by tenfold in Germany by the end of the decade.
BEC’s established sourcing channels and world-class biogas production and construction expertise, combined with VARO’s existing feedstock sourcing, operations, and trading capabilities create a strong platform to scale the biofuels business across Europe.
This transaction brings VARO closer to realizing its target of 1 TWh per year of biogas production by 2026. It creates the largest biogas manufacturing facility in Northern Europe, located at the heart of one of the most concentrated industrial centres in the world offering easy access to high-demand growth. Abundant feedstock from agricultural waste in the region also provides a resilient and sustainable supply to the facility. I am looking forward to working with our new partners to deliver on the expansion of the current platform plant and continue to grow VARO’s biogas business, said Christian Cuenot, VP of Biogas at VARO.
