Energy giant BP has completed its acquisition of leading US biogas producing company Archaea.

Archaea operates 50 biogas and landfill gas-to-energy plants across the US. The company has a further 80 projects in the pipeline, with the potential for a five-fold growth in biogas production by 2030.

The sale was agreed for $3.3bn, as well as around $800m of net debt and it builds on BP’s existing biogas business.

Bioenergy

Despite being a gas and oil giant, bioenergy is one of five strategic transition areas that BP intends to grow rapidly through this decade.

BP expects investment into these transition businesses to reach more than 40% of its total annual capital expenditure by 2025, aiming to grow this to around 50% by 2030.

Chairman and president of BP America Dave Lawler said: “We see enormous opportunity to grow our bioenergy business by bringing Archaea fully into BP.

"The talent, expertise and passion of their team has let them achieve incredible growth so far and we’re excited to support the next chapter in line with our strategy.”

Fossil to renewable

Increasing sales of biogas will support BP’s net zero ambition, specifically its aim to reduce the carbon intensity of energy products it sells to net zero by 2050 or sooner.

It has set an interim target to reduce this carbon intensity by 5% by 2025 and aims to reduce it by 15% to 20% by 2030, both against a 2019 baseline.

Last year, global fuel giant Shell revealed it reached an agreement to buy Nature Energy, the largest producer of biogas in Europe, as the company pushes to be a net-zero emissions energy business by 2050.