Enbridge Announces Low-Carbon Fuel Deals with Vanguard, Shell

(Reuters) — Enbridge Inc. said on Tuesday it had signed partnerships with Royal Dutch Shell and Vanguard Renewables to make low-carbon fuels, as the Canadian pipeline operator aims to cut its greenhouse gas emissions.

Enbridge will buy 2 billion cubic feet (bcf) of renewable natural gas (RNG) annually from Vanguard Renewables, while it will collaborate with Shell on potential green and blue hydrogen production.

Enbridge, which set emission-reduction targets in November, hopes to be a net zero emitter by 2050, as the industry faces pressure to limit carbon pollution.

The company said on Tuesday it would buy RNG from eight anaerobic digesters that Vanguard will spend $200 million to build and operate in the U.S. Northeast, Southeast and Midwest

RNG is produced when gas is captured from food waste, manure or landfills and turned into fuel for transportation or heating.

Enbridge can replicate the project across the United States and could double the RNG it sells within several years, said Caitlin Tessin, Enbridge's director of market innovation.

If natural gas prices, which are soaring, remain elevated, it could further boost demand for RNG, which normally trades at a premium, Tessin said in an interview.

Enbridge will spend $100 million on equipment to convert gas from food waste and farm manure into pipeline-quality renewable natural gas and market it to U.S. customers.

Coffee chain Starbucks Corp and Unilever Plc, maker of Ben & Jerry's ice cream, are providing food waste to Vanguard for processing into RNG.

Enbridge signed an agreement with Shell to explore opportunities to produce hydrogen, using processes that either capture emissions from production or produce hydrogen with renewable power.

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