Goldman Sachs’ asset management division has announced that it will invest more than €1bn euros in the development of Europe’s biomethane production capacity through its newly created venture, Verdalia Bioenergy.
After announcing the launch of Verdalia Bioenergy on Monday February 6, Goldman Sachs Asset Management (GSAM) revealed that its investment aims to increase Europe’s biomethane production capacity over a four-year time scheme.
Produced through the anaerobic digestion of organic waste, biomethane is a negative or low carbon natural gas that can be harnessed as an alternative to fossil natural gas without generating carbon emissions. As biomethane is also compatible with existing gas infrastructures, it can diminish harmful methane emissions that could otherwise be released into the atmosphere during decomposition of organic waste.
According to Gas World “With a global warming potential (GWP) rating 84 times more potent on a 20-year timescale than carbon dioxide (CO2), methane has accounted for roughly 30% of global warming since pre-industrial times”.
Fernando Bergasa, Executive Chairman of Verdalia Bioenergy said “Renewable gas will be a key tool for Europe to achieve its commitment to be carbon neutral by 2050.”
The ongoing production of biogas and biomethane could play a ‘critical role’ in achieving Net Zero targets and energy independence, as it could save 60m tonnes of GHG emissions every year according to the European Biogas Association (EBA).
Investments of approximately €80bn are expected to be required in order to reach the EU target of 370 terawatt hours of biomethane production by 2030, which is approximately 10x current production.
Commenting on the announcement, Matteo Botto Poala, Managing Director in the Infrastructure business within GSAM, said, “We believe that biomethane is today one of the most compelling segments in the energy transition for infrastructure investors.”
GSAM’s newest venture is the latest in a series of ‘landmark energy transition investments’ made by the firm, including the creation of Japan Renewable Energy (JRE), one of the largest Japanese renewables businesses.
