BP is buying Clean Energy’s green gas business for $155 million (£126m).
That includes existing biomethane production plants, its share of two new facilities under construction and third-party supply contracts for green gas.
Clean Energy captures biomethane gas emitted from landfill waste sites and processes and purifies it to pump through pipelines.
Biomethane, or renewable natural gas, is produced entirely from organic waste. As a fuel for vehicle fleets, including heavy-duty trucks, it is estimated to result in up to 70% lower greenhouse gas emissions compared to gasoline or diesel vehicles.
Clean Energy will continue to collect environmental credits on gas purchased BP and sold to customers at its nearly 600 refuelling stations.
Alan Haywood, CEO of BP’s supply and trading business said: “Demand for renewable natural gas is growing quickly and BP is pleased to expand our supply capability in this area.
“BP is committed to supporting developments towards a lower carbon future and working with Clean Energy, we believe we will be well-positioned to participate in the growth of this lower carbon fuel in the US.”
According to BP’s latest Energy Outlook, renewable energy is expected to almost quadruple by 2035.