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Greenlane paves way for global growth in RNG sector

Greenlane Renewables.
Greenlane Renewables is making strides in the expanding renewable natural gas industry, hoping to be a Canadian pioneer with the clean fuel. (Courtesy Greenlane Renewables)

One of Canada's most promising companies in the sustainable energy field is Greenlane Renewables. Headquartered in Burnaby, B.C., Greenlane is a pioneer in the fast-growing renewable natural gas (RNG) industry that has emerged as a leading global provider of biogas upgrading systems and solutions.

The company has carved out a global niche by offering three key technologies - water wash, pressure swing absorption and membrane separation - enabling it to convert organic waste material from landfills, wastewater treatment plants, dairy farms and food waste into clean RNG.

By means of its patented, state-of-the-art technology, Greenlane is pursuing a steady expansion strategy that aims to capture significant market share in a biomethane production sector that has limitless growth potential.

According to the International Energy Agency, biomethane will account for five per cent of global natural gas consumption by 2050. That number may seem small, but Greenlane president and CEO Brad Douville says it represents future global demand of "$90 billion in biogas upgrading equipment and sales" which the Canadian outfit is uniquely positioned to provide and deploy.

Strong Q3 financial report

Greenlane's third-quarter earnings report, released on Nov. 8, offers considerable excitement for potential exponential growth in an RNG industry still in its infancy.

The firm reported record Q3 revenue of $19.9 million, a 48 per cent year-over-year increase over $13.4 million in Q3 2021, and gross profit of $4.3 million.

Greenlane, which carries zero debt, recently extended its credit facility with the Toronto Dominion Bank from $12.5 million to $20 million, in addition to its cash on hand of $21.3 million.

"We've delivered record quarterly revenue and a solid bottom line, and we maintain our excitement about the growth of the RNG industry and our role in its success," Douville said in his Q3 financial report conference call. "We remain driven to grow our business and balance this growth's impact on our bottom line."

"With increasing global focus on impactful solutions to decarbonize our planet, the RNG industry has experienced significant consolidation this year together with new supportive regulations and funding, pointing to the scale-up of the number of RNG projects."

Greenlane's global RNG presence

Founded in 1986, Greenlane has deployed over 135 RNG systems into 19 countries, including Canada. In 2014, it installed one of North America's largest biogas upgrading systems in Montreal.

"In 12 of these countries we were the first to deploy an upgrader, so Greenlane has been a real pioneer," Douville told BNN Bloomberg in September. "That gives our customer set a lot of comfort that we know what we're doing and these technologies are tried and true and they will run 97 per cent up top. That's what the expectation is in the industry."

Added the Greenlane CEO: "We are helping to clean up two of the largest and most difficult-to-decarbonize sectors of the global energy system: the natural gas grid and the commercial transportation sector."

In recognition of Greenlane's emergence as a global RNG player and its "impactful contribution towards a more sustainable economy," Export Development Canada named the company as an Export Star on Oct. 25 during its sixth annual Cleantech Export Week.

RNG industry poised for massive consolidation and expansion

In his Q3 earnings report remarks, Douville cited BP's recent $4.1 billion acquisition of U.S.-based RNG producer Archaea Energy, the largest RNG transaction in history.

"BP plans to to increase Archaea’s current RNG production five-fold by 2030," he said.

The Greenlane CEO also alluded to how Shell will bid "to acquire one of Europe’s largest biomethane producers, Danish-based Nature Energy, in a transaction that could be worth US$2 billion," as part of a recognition by "global energy supermajors" that RNG is on the verge of a massive takeoff.

According to Douville, the U.S. Inflation Reduction Act will further expand the market for Greenlane's RNG tech systems by containing "provisions for biogas property, which includes biogas upgrading equipment."

Closer to home, Greenlane's CEO spoke promisingly of the Quebec provincial government's recent revision of its energy legislation.

These changes have increased the minimum RNG volumes for its natural gas grid that will oblige "gas distributors like Énergir to deliver five per cent RNG volumes by 2025 and 10 per cent by 2030, with Énergir subsequently openly asking RNG producers across North America for information about long-term commitments for RNG volumes."

Importance of reducing livestock methane emissions

After carbon dioxide, methane is the second-largest contributor to global warming, estimated to account for half-a-degree Celsius of temperature rise.

Livestock methane emissions account for six per cent of greenhouse gas emissions, more than double the 2.5 per cent produced by the aviation industry. Greenlane can represent a viable path toward cutting livestock methane emissions, which are projected to rise 30 per cent by 2050 as consumption of meat and dairy products rises.

In June, the company announced it was helping develop a dairy cluster project in California involving the installation of a digester and biogas upgrading system. This would allow for the production of RNG from manure delivered from proximal farms and produce an estimated 80,000 MMBtu of RNG annually.

“We launched this program with the aim of adding incremental value to the community of project developers around the world to help de-risk projects and to build scale in RNG origination,” said Douville in the company’s June 2 press release.

"This is the first of what we expect to be many opportunities to provide specialized RNG project development capital to accelerate RNG projects to the ready-for-construction phase, securing Greenlane system sales, and providing on-going services for each project."

Whiskey industry also in the mix

Finally, one interesting new growth area Greenlane is targeting as part of its overall RNG rollout strategy is the whiskey sector.

"The whiskey industry in the U.S. is also looking to RNG as an important tool to help decarbonize operations, as both Jack Daniels and Jim Beam have announced recent projects involving significant capital," said Douville in his opening statement at the earnings call.

He referenced Jack Daniel's and TC Energy's project to invest US$29 million in a new RNG production facility at the Jack Daniel distillery in Tennessee.

Bourbon producer Jim Bean also announced an investment of US$400 million in renewable energy systems and increased bourbon production at its largest Kentucky distillery, with RNG ultimately fuelling 65 per cent of the distillery’s operations 

The case of applying biomethane solutions to the global whiskey industry is further proof of the virtually limitless applications of Greenlane's RNG tech and expertise.

Douville summed up his company's readiness to step into the brave new world of RNG: "Greenlane is very well positioned to take advantage of the . . . anticipated ramp-up in demand for RNG and related biogas upgrade solutions."

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