Member press release – Greenlane Renewables Announces Agreement with ZEG Biogas to Establish Industrial Scale Volume Production Locally in Brazil
Partnership will help accelerate growth of production of biomethane or RNG in world’s largest sugarcane producing region
Vancouver, British Columbia, Canada – April 17, 2023 – Greenlane Renewables Inc. announces that it has entered into a collaborative agreement with ZEG Biogás e Energia S.A., a company 50% owned by Vibra Energia S.A., previously the fuel distribution unit of Petrobras, to locally produce, market and sell one of Greenlane’s largest and most popular biogas upgrading products in Brazil.
Under the terms of the agreement, Greenlane and ZEG Biogás will collaborate to establish, locally in Brazil, volume production of Greenlane’s Totara+ Water Wash Biogas Upgrading Product, one that is capable of processing up to 2,500 Nm3/h of inlet biogas. ZEG Biogás has been granted exclusive rights to localize the supply chain and manufacture the product in Brazil under the Greenlane brand and to market and sell the product to biomethane producing projects in which ZEG Biogás has an equity stake or a biomethane off-take agreement. Greenlane retains responsibility for the product design, the supply of components not available locally in Brazil, and the local commissioning and servicing of the products. Initial target markets are those of landfills and sugar mills. ZEG Biogás’ goal is to reach the production of 75 Totara+ systems in the next 5-years. Production capacity will be phased in over time, with a minimum volume commitment in the first two years.
VIBRA, a publicly-traded company, is the result of the privatization process of Petrobras Distribuidora, and one of Brazil’s largest energy companies and leader in the fuel distribution market. VIBRA has committed to invest up to R$412 million (C$109 million) in the ZEG Biogás business over the next few years, for the execution of new biogas/biomethane projects.
“We have worked with ZEG Biogás for many years and have been impressed by the progress achieved and the partnerships formed, turning into reality the large landfill and even larger sugar mill waste biomethane opportunities that exist in Brazil”, said Brad Douville, CEO of Greenlane. “With VIBRA’s 50% ownership of ZEG Biogás and its significant commitment of capital, the result is the most important deal we have done to-date at Greenlane. We believe it opens up an excellent opportunity to accelerate the production of biomethane in Brazil, at an industrial scale, and to solidify Greenlane’s market leading position, together with a very capable and ambitious local partner. This transaction is also a shift in our standard business model. Under this agreement, we’re evolving our current build and production process to proliferate Greenlane’s biogas upgrading technology at the lowest installed cost and quickest delivery times. It provides revenue under a new royalty-like business model, together with ongoing service contracts.”
“The production of equipment on Brazilian soil will bring agility to the development of projects and a reduction in final costs, allowing ZEG Biogás to deliver a sustainable and more competitive fuel to the market”, highlights Kwami Alfama Correia, CEO of ZEG Biogás. Mr. Correia believes that the partnership will be prosperous for both sides, boosting national production of biomethane with the use of cutting-edge technology, recognized worldwide. “The water wash technology is considered one of the most advanced in the world in the purification of biogas from urban solid waste and agricultural waste, due to its robustness and consistency,” added Correia.
The Brazilian sugarcane sector is a promising new and immense market opportunity for biomethane. Today, there are more than 330 sugar mills across the country engaged in the production of sugar and ethanol biofuel. The latter produces vast quantities of a liquid byproduct called vinasse, which is an untapped and ideal feedstock for the production of biomethane. The ethanol biofuel production industry in Brazil dates back to the 1970s and today the country is the world’s second largest producer. The consumption of ethanol biofuel is equivalent to gasoline volumes in the country’s transportation sector.
The sugarcane industry in Brazil has a history of successfully finding ways to maximize the energy value of the crop. The industry began with the production of sugar, then added ethanol, then later added the use of bagasse as a biomass feedstock to generate electricity and send it to the grid. Bagasse is the waste byproduct from the crushing of sugarcane. Over the last 30 years, bagasse-to-power has spread to two thirds of sugar mills in Brazil. This rapid adoption reflects the huge potential for vinasse-to-biomethane. Biomethane production from sugar mill waste across the entire sector has the potential to exceed the total current natural gas consumption in Brazil.
ZEG Biogás has developed and built unique digester and hydrogen sulfide removal technology engineered to maximize the production of biomethane from vinasse. Greenlane has supplied the biogas upgrading system for the first commercial-scale pipeline injection biomethane project in the Brazilian sugarcane industry and is the market leading provider of biogas upgrading systems in the country.
About ZEG Biogás
ZEG Biogás tropicalized equipment already consolidated in the world and developed exclusive technologies for the production and distribution of biogas and biomethane, which allows for cost efficiency and scalability of its projects. With ownership structure from VIBRA Energia, ZEG, and FSL, ZEG Biogás brings together state-of-the-art technology, innovative vision, and a robust structure of infrastructure and distribution logistics. This know-how in different segments of the chain enables it to offer a complete solution to its partners, from the production of the molecule to the supply to the market. Working towards a sustainable growth, with the purpose of achieving the energy transition to a low carbon economy, ZEG Biogás is a company aligned with the practices of the ESG agenda (Environment, Social and Governance), offering integrated solutions that seek to promote decarbonization, digitization, decentralization and democratization of resources. For further information on ZEG Biogás, go to https://zegbiogas.com.br/en/
About Greenlane Renewables
Greenlane Renewables is a pioneer in the rapidly growing renewable natural gas (“RNG”) industry. As a leading global provider of biogas upgrading systems, we are helping to clean up two of the largest and most difficult-to-decarbonize sectors of the global energy system: the natural gas grid and the commercial transportation sector. Our systems produce clean, low-carbon and carbon-negative RNG from organic waste sources such as landfills, wastewater treatment plants and agricultural and food waste streams. To the company’s knowledge, Greenlane is the only biogas upgrading company offering the three main technologies: waterwash, pressure swing adsorption, and membrane separation. Greenlane’s business has been built on over 35 years of industry experience, patented and proprietary technology, with over 140 biogas upgrading systems sold into 19 countries, including some of the largest RNG production facilities in the world, and over 140 biogas desulfurization units sold. For further information, please visit www.greenlanerenewables.com.
For more information please contact:
Incite Capital Markets
Eric Negraeff / Darren Seed
Brad Douville, CEO, Greenlane Renewables
FORWARD LOOKING INFORMATION – This news release contains “forward-looking information” within the meaning of applicable securities laws. All statements contained herein that are not historical in nature contain forward-looking information. Forward-looking information can be identified by words or phrases such as “may”, “is expected”, “likely”, “should”, “would”, “plan”, “anticipate”, “intend”, “potential”, “proposed”, “estimate”, “believe” or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions “can”, “may” or “will” happen. In particular, this news release contains forward looking information relating to the collaboration with ZEG Biogás to establish volume production of the Totara+ water wash biogas upgrading product (each a “Unit”); the goal of ZEG Biogás to reach production of 75 Units in the next 5 years; VIBRA’s commitment to invest up to R$412 million (C$109 million) in ZEG Biogás and such investment resulting in new biogas/biomethane projects; that this collaboration with ZEG Biogás will allow Greenlane to help accelerate production of biomethane in Brazil and solidify Greenlane’s market leading position; and the production of the Units in Brazil will facilitate the development of projects and result in the reduction in final costs. .The forward-looking information contained herein is made as of the date of this press release and is based on assumptions management believed to be reasonable at the time such statements were made, including management’s perceptions of future growth and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. By their nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond the Company’s control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, without limitation, risks relating to the collaboration with ZEG Biogás not resulting in the volume production of Units or other ancillary benefits to Greenlane as anticipated, risks that ZEG Biogás’s biomethane production goals are not met over the anticipated time period, risk that VIBRA will not invest in ZEG Biogás as expected and such investment does not result in new biogas/biomethane projects; risk that the production of Units in Brazil does not improve the development of projects or the reduction of final costs and risks identified in the Company’s annual information form and in other documents filed with Canadian securities regulatory authorities on the Company’s SEDAR profile at www.sedar.com. Readers are cautioned not to put undue reliance on forward-looking information. Actual results may differ materially from those anticipated. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
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