RNG Assets Dominated Investor Interest Driven by Rising Demand from Transport, Industrial Segments, While SAF and Alcohol Fuels Came to the Forefront as Emerging Growth Areas
M&A Activity Analysis [2023 & 2024]
Private Equity (PE): $8bn of Acquisitions, Accounting for ~50% of the Transaction Volume
KKR's proposed $2.5bn investment in O&G major Eni's sustainable fuels unit underscores the gradual, then sudden surge of PE interest in the biofuels landscape. In late-2022, a Raymond James analyst mentioned "RNG is a small but rapidly growing source of renewable energy in the US. It is particularly popular in states including California - that have low-carbon fuel standards. It is also worth noting that RNG is a larger, more established market in Europe, particularly the agricultural areas of Italy and Germany."
This sentiment was echoed by Goldman Sachs, who announced plans to invest €1bn+ in European biomethane platform Verdalia, in Feb'23. While RNG has emerged as the primary focus for PE investors in the medium-term, Biogas, SAF and Ammonia have come to the forefront as high-growth areas as well, driven by the demand from heavy industries such as aviation and chemicals
Utilities, O&G Majors: $7bn of Acquisitions, Dominated by European Utilities
ENGIE has led its peers in this space, investing ~$200mn in RNG acquisitions. The firm has made RNG a key pillar of it's 2030 decarbonization strategy. ENGIE's 2030 aim is to achieve 10 TWh/yr of RNG production capacity in Europe, for which it has allocated a €3bn investment budget
Other utilities including Greenvolt, EnBW and Acciona have acquired SAF, Ammonia and Waste-to-Energy assets.
Meanwhile, O&G companies TotalEnergies, bp, Enbridge and Repsol displayed diversified interest across RNG, SAF and Alcohol Fuels assets, with bp's $1.4bn takeover of Bunge marking the largest deal by the group
bp is focused on biofuels feedstocks such as HEFA, anticipating rising pressure on this segment of the value chain as production capacity expands. Meanwhile, TotalEnergies is leveraging its biorefineries to ramp-up SAF production, partnering with firms including Airbus
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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