(Corrects headline and first paragraph to make clear the sales
of renewable natural gas do not count toward Enbridge’s
emissions reduction goals; Adds third paragraph that clarifies
RNG buyers collect offset benefits)
By Arunima Kumar and Rod Nickel
Sept 28 (Reuters) - Canadian pipeline operator Enbridge Inc
said on Tuesday it had signed partnerships with Royal
Dutch Shell and Vanguard Renewables to make low-carbon
fuels, seeking to tap into sales to companies that want to lower
their greenhouse gas emissions.
Enbridge will buy 2 billion cubic feet (bcf) of renewable
natural gas (RNG) annually from Vanguard and collaborate with
Shell on potential green and blue hydrogen production.
Companies that buy RNG from Enbridge would collect the
offsets associated with decarbonization, spokesman Jesse Semko
said.
Enbridge, which set emission-reduction targets last
November, hopes to be a net-zero emitter by 2050.
The company said 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.
The companies are also looking at developing a
carbon-capture and storage hub in southern Ontario where there
are lots of industrial emissions and potential storage, Matthew
Akman, Enbridge's senior vice president of strategy, renewables
and new energies, told an Enbridge forum on Tuesday.
"That's the kind of thing where we can together really move
the dial and get things going. ... We're very excited about
that," Akman said, without going into further details.
The Canadian government is pushing to provide incentives for
at least two massive new carbon-capture and storage hubs by 2030
as part of its plan to cut emissions.
(Reporting by Arunima Kumar and Rod Nickel; Additional
reporting by Nia Williams in Calgary; Editing by Sriraj
Kalluvila, Steve Orlofsky and Peter Cooney)