BP banks on biomethanol to decarbonize shipping with $10 million investment in US-based WasteFuel

BP expanded its investment in bioenergy July 6 as BP Ventures committed $10 million leading the Series B investment round in WasteFuel, a California-based biofuels company that will use proven, scalable technologies to convert biobased municipal and agricultural waste into lower-carbon fuels such as biomethanol.

Globally, solid-waste production totals about 2 billion metric tons annually and is expected to increase to 3.4 billion metric tons by 2050.

WasteFuel’s deployment of anaerobic digestion and methanol production technologies will convert municipal and agricultural waste into viable lower-emission alternatives to traditional fuels, like biomethanol.

In hard-to-abate sectors, such as shipping, biomethanol has the potential to play a significant role in decarbonization.

Maritime transport represents around 90 percent of trade worldwide while producing 3 percent of global greenhouse-gas emissions.

In the effort to reach net zero, some of the biggest companies in the shipping industry are converting to methanol-ready ships.

BP is working to establish supplies of lower-carbon alternatives for the shipping sector and will look to use its trading expertise to bring WasteFuel’s biomethanol to market.

WasteFuel plans to develop multiple biomethanol plants around the world in collaboration with local strategic partners including waste companies.

WasteFuel expects its first project will be in Dubai, UAE, and the company has a pipeline of additional projects to develop.

BP and WasteFuel have entered a memorandum of understanding for BP to offtake the produced biomethanol and to work together to help optimize and improve biomethanol production.

“WasteFuel projects will look to help with the growing volumes of global waste, whilst advancing the development of lower-carbon solutions for hard-to-abate sectors,” said Gareth Burns, vice president of BP Ventures. “Achieving decarbonization in shipping will require a step-change, and biofuels have a key role to play in helping the industry to decarbonize. We look forward to working together on WasteFuel’s next stage of growth and market development.”

Bioenergy is one of BP’s five transition growth engines, in which the company plans to invest heavily through this decade.

The transition growth engines, which also include convenience, electric-vehicle charging, hydrogen, and renewables and power, will help drive BP’s transition to an integrated energy company and delivery of the company’s net-zero ambition.

“Working with WasteFuel allows BP to offtake biomethanol and help optimize production, which could support decarbonizing shipping,” said Philipp Schoelzel, BP’s vice president of next-generation biofuels. “BP is in action to produce more biofuels, aiming to deliver around 100,000 barrels per day by 2030, to help decarbonize transport. Investments like this are important as we strive to reach net zero and help our customers decarbonize too."

Trevor Neilson, co-founder, chairman and CEO of WasteFuel, added, “This investment from BP Ventures is a significant milestone for WasteFuel as it will help scale the production of biomethanol to decarbonize the shipping sector. As companies who are reliant on shipping work to reduce their greenhouse-gas emissions, it is essential that we dramatically expand the availability of these fuels.”

BP and WasteFuel are both members of the Sustainable Markets Initiative.