Greenlane Renewables

Overview

Greenlane Renewables (TSX:GRN) is a leading global provider of biogas-upgrading systems that are capable of contributing to decarbonizing the natural gas grid and transportation network. The company’s systems produce clean, low-carbon, renewable natural gas (RNG) from organic waste sources such as landfills, wastewater treatment plants, farms and food waste facilities. The RNG is then used as fuel for vehicles, such as those adopted by UPS (NYSE:UPS), or for injection into the natural gas grid.

In response to end-user demands for a lower carbon footprint and renewable fuels, Greenlane Renewables is the only RNG pure-play that offers the three main biogas upgrading technologies. These technologies remove impurities and separate biomethane in raw biogas to create clean RNG for pipeline injection, liquefaction or direct use as a vehicle fuel. The company works with customers from around the globe to find the right solutions for the type and scope of the project.

Focused on providing turnkey solutions for its clients, Greenlane Renewables offers three technologically advanced solutions to its clients: its patented water-wash system, pressure swing adsorption (PSA) and membrane separation. All three are designed to meet project specifications without breaking the budget. More than that, Greenlane Renewables brings core competency and outright expertise built on decades of experience to get the job done. Units are priced from $2 million to $12 million depending on the size and scope of the project, generating more than $71 million in revenue for the company in 2022.

Greenlane Renewables has installed over 140 units in 19 countries across the globe. The company has installed one of the largest RNG operations in both Europe (Germany) and Canada (Quebec). Greenlane Renewables has also completed a project in California that upgrades and injects RNG into the SoCalGas (OTCMKTS:SOCGP) (part of the Sempra group of utilities) natural gas pipeline network.

In August 2022, Greenlane Renewables signed new contracts with a combined value of $13.5 million to supply its biogas-upgrading technology for two landfill RNG projects in South America. Greenlane will provide two water-wash upgrading systems capable of processing enough landfill gas to produce up to approximately 850,000 MMBTU. The company also secured a US contract for C$8.7 million for a project to convert dairy manure to RNG and an $11.4 million contract with a single customer for the supply of its pressure swing adsorption biogas upgrading systems for new food-waste-to-RNG projects across three US states. Most recently, Greenlane was awarded a $7.2 million contract through Synthica St. Bernard LLC for a food-waste-to-pipieline renewable natural gas project in Ohio. Greenlane will supply an integrated sulphur removal and water wash system for upgrading biogas generated from food waste streams into pipeline-spec renewable natural gas for direct injection into the local natural gas pipeline network.

In an effort to accelerate the development of renewable natural gas projects, Greenlane Renewables announced two development capital deployments in 2022, with a combined total of up to US$1.8 million. The two capital deployments — one for a company developing RNG projects based on a dairy cluster model in California, and the other for a company developing landfill gas-to-RNG projects in the US midwest — support Greenlane Renewables’ effort to accelerate RNG projects to ready-for-construction phase.

With over 35 years of industry experience, patented technology and over 140 biogas units installed in 19 countries, Greenlane Renewables is committed to help eliminate waste and provide a greener future for generations to come.

Greenlane Renewables is also one of the founding members of the Integrated Biogas Alliance (IBA), an organization designed to help provide the global biogas industry with unique and fully-integrated organic waste to renewable energy solutions.

Company Highlights

Greenlane Renewables is a market leader in upgrading low-energy biogas to RNG.The company has 14 patents and 28 device titles.The company offers three patented biogas-upgrading technologies to customers across the globe.Each technology unit is worth between $2 million and $12 million.Revenue generated in 2022 totaled more than $71 million.The company has installed more than 140 units in 19 countries.Expanding beyond equipment sales, Greenlane Renewables has embarked on two deployment capital agreements in 2022, in an effort to accelerate projects to the construction phase.The company is composed of industry leaders with more than 30 years of experience.Insiders own approximately 10 percent of the company’s shares.Greenlane Renewables acquired Airdep S.R.L., a provider of biogas desulfurization and air deodorization products based in Vicenza, Italy.

Why Renewable Natural Gas?

According to a report by McKinsey & Company, demand for natural gas is expected to reach 20 billion cubic feet per day by the year 2030. The market is expected to significantly impact the North American gas landscape in particular, as coal loses popularity as an energy solution and renewable energy takes a more dominant role in the market. McKinsey & Company notes the North American gas market’s dependence on the global market as roughly 60 percent of natural gas will come from the US and Canadian exports.

The increase in demand for renewable energy sources is being driven by greenhouse gas emission reduction targets, strict government regulations and growing demand for waste treatments. For example, in 2010, California passed the California Low Carbon Fuel Standard (CA-LCFS), which looks to reduce greenhouse gas emissions by 20 percent by 2030. The standards were designed to promote the use of alternative fuels including biofuels, compressed natural gas, hydrogen and electricity, making biogas an important renewable energy solution.

To present a viable solution for renewable energy requirements, Greenlane Renewables utilizes three innovative technologies that are capable of producing biogas. Biogas is produced from decomposing organic material without the presence of oxygen and is primarily composed of methane and carbon dioxide. Biogas started as a cheap heating fuel but was adopted in the late 1980s for combined heat and power applications. Applications for biogas have recently expanded to include high-value and high-tech upgrading processes to make it available for pipeline injection (utilities) and vehicle use.

Many existing natural gas plants, however, are not equipped to produce biogas, creating a large market for biogas upgrades. According to Research and Markets, the global biogas upgrading market is expected to reach US$4.96 billion by 2026. Biogas plants are needed to help the utility sector meet sustainability targets and many companies, such as SoCalGas, FortisBC and Energir, are looking to use a greater amount of RNG in lieu of fossilized natural gas in their distribution networks. For example, SoCalGas has committed to replace 20 percent of its traditional natural gas supply with RNG by 2030.

Greenlane Renewables’ Technology

Greenlane Renewables has built a team with significant technology and implementation expertise that collaborate with the company’s clients. The team works with customers to evaluate project objectives and identify solutions that work for them. Greenlane Renewables helps its clients choose the right type of technology for the project, advisory services and assists with a variety of project development activities such as financing, siting, permitting and RNG off-take.

Greenlane Renewables is one of the only companies to offer multiple core technologies for creating RNG from biogas. The company’s biogas upgrading-systems are marketed and sold through its wholly-owned subsidiary Greenlane Biogas and the Greenlane Biogas brand. Biogas upgrading systems are responsible for cleansing impurities and separating carbon dioxide from biomethane to create a clean, high-purity, low-carbon fuel, known as RNG.

Greenlane Renewables manages the entire project life cycle from design and procurement through to on-site installation, commissioning and aftercare. After the company’s technology has been installed, Greenlane Renewables provides 24/7 technical support, remote monitoring and maintenance.

The Technology

Greenlane Renewables offers three technology solutions to its clients: water-wash, PSA and membrane separation. All three pieces of technology are designed to fulfill the needs of big and small projects alike. Each unit price ranges from $2 million to $12 million depending on the size and scope, which resulted in more than $71 million in revenue for the company in 2022.

Water-Wash

A simple process with no upstream treatment requirements, the water wash technology removes impurities in the feed material without using chemicals or heat. It is one of the most widely-used upgrading technologies in the world. Greenlane Renewables has developed five models for this technology that are designed to meet a range of flow-rate requirements. All technology systems contain a modular design with a compact footprint, making it easily scalable.

Pressure Swing Adsorption (PSA)

PSA can effectively separate specific gases from a complex mixture of different gases, like those generated at landfills. The PSA technology uses several steps to purify biogas and separate methane from carbon dioxide. It is one of the only technologies available today that can remove nitrogen; however, high nitrogen levels can reduce methane recovery rates, making it sometimes necessary to pair the technology with another solution like the water wash.

Membrane Separation

Often more suitable for small to medium-sized projects, the membrane separation technology uses permeation to filter out larger methane molecules from the smaller carbon dioxide molecules. Greenlane Renewables believes that this option is best for clients that consider initial capital expenditure as more important than long-term life cycle costs.

RNG Projects

Every biogas upgrading project requires its own unique solution depending on the source of the raw biogas, its composition and level of impurities. The solution also changes based on the size of the project and the end-user of the RNG. To this aim, Greenlane Renewables works with its customers to find the right solution for that particular client and has established projects in a number of countries around the globe.

Gustrow, Germany

In 2009, Greenlane Renewables was commissioned to develop one of the largest RNG projects in Europe located in Gustgrow, Germany. The plant, which has a capacity of 10,000 normal cubic meters per hour, treats biogas from crops and feeds the RNG into the local natural gas pipeline.

Quebec, Canada

Greenlane Renewables has also designed one of the largest RNG processing facilities in the world in Montreal, Quebec. The facility has a capacity of 16,000 normal cubic meters per hour and treats biogas from a large landfill and feeds the RNG into the local natural gas pipeline. The project was commissioned in 2014.

California, US

Greenlane Renewables’ has been tasked with some of the toughest jobs. Their project in Perris, California, commissioned in 2018, treats biogas from municipal organic waste and feeds the Rule-30 pipeline-quality RNG into SoCalGas’ pipelines. The project has a total capacity of 2,000 normal cubic meters per hour and is credited with being the first facility to produce RNG within California. The project uses Greenlane Renewables’ Totara system in combination with PSA to produce the required end product.

Greenlane Renewables’ Growth Strategy

Greenlane Renewables plans to expand beyond systems sales and increase recurring revenues and profits by adding exposure to lucrative RNG off-take contracts and the associated environmental attributes/carbon credits. Management intends to deploy specialized development capital where it can accelerate projects to the ready-for-construction phase, secure additional system sales and services and result in an equity and/or profits interest for Greenlane in the resulting RNG project. In June of 2022, Greenlane announced its first deployment of development capital for a dairy cluster project in California.

Management Team

Ian Kane – President and Chief Executive Officer

Ian Kane joined as president, chief executive officer and director in August 2023 with 25 years of professional experience as an impactful business leader who has created sustainable value through fostering a culture of innovation and accountability. Ian holds an MBA (Cum Laude) from the University of Stellenbosch and M.Eng from the University of Johannesburg.

Brad Douville – Executive Vice Chair and Director

Brad Douville joined Greenlane in 2017 after a 25-year career in the natural gas commercial vehicle industry. He was a founding member of Westport Innovations (formed in 1995), now Westport Fuel Systems, and Cummins Westport (2001). He holds an MASc. in Mechanical Engineering (University of British Columbia) and an executive program certificate from the Stanford School of Business.

Monty R. Balderston – Chief Financial Officer

Monty Balderston joins Greenlane with over 25 years of experience in progressively senior financial leadership positions, including the role of chief financial officer, in both public and private companies spanning mechanical equipment provisioning and installation, civil construction, industrial supply, maintenance services, and diversified energy services. He is a chartered professional accountant and holds a Bachelor of Commerce from the University of Alberta . Balderston began his career at PricewaterhouseCoopers LLP and for the last five years was the chief financial officer with Mosaic Capital Corporation where he oversaw all financial reporting processes and strategic planning, including budgeting, forecasting and acquisitions.

Alex Chassels – Chief Operating Officer

Alex Chassels brings over 25 years of experience and a track record of executive leadership in business transformation and operations optimization in growth-oriented technology companies with innovative products and complex global supply chains. Through growing positions of responsibility and leadership with Creo, Kodak and Alpha Technologies (an Enersys Company) he has developed a clear team-based approach to delivering the highest levels of customer satisfaction. Chassels holds a BA in Philosophy (Magna Cum Laude) and Chemistry from the University of Arizona.

Jim Bornholdt – VP of Purchasing, Project Management and Quality, Health, Safety and Environment

Jim Bornholdt has over 35 years of experience in purchasing and logistics functions for multi-million-dollar projects across a broad range of industries, including manufacturing, aerospace, civil construction and the Olympic Games.

Marco Mazafarro – Director of Project Development

Marco Mazafarro has over 15 years of experience in renewable energy project sales and development. He holds a degree in business administration from the Pontifícia Universidade Católica de São Paulo in Brazil and an M.Sc. in Sustainable Energy Development (University of Calgary).

Sandra Keyton – VP Human Resources

Sandra Keyton is a growth-oriented human resources executive with 30 years of global HR experience in the technology, automotive and energy sectors. Prior to Greenlane, she was with Westport Fuel Systems Inc. She holds her CHRP designation and is a graduate of the British Columbia Institute of Technology Human Resources Management Program.

Wade Nesmith – Chairman and Director

Wade Nesmith founded Primero Mining Corp. in 2008, acting as CEO until 2010 and chairman until 2018. He was a founding board member of Westport Innovations Inc. and Silver Wheaton Corp., and was previously superintendent of brokers for the Province of British Columbia (1989 to 1992), and senior partner, specializing in securities law with Lang Michener LLP (now McMillan LLP) from 1993 to 1998. He obtained his LLB from Osgoode Hall Law School.

David Demers – Director

David Demers was a founding member of Westport Innovations, serving as CEO and a director from 1995 to 2016. He was a director of Primero Mining Corp. from 2008 to 2018. Previously with IBM, Demers currently sits on the boards of TIMIA Capital Corp. and Augurex Life Sciences Corp. He has a BSc. in Physics and a D.Juris, both from the University of Saskatchewan.

David Blaiklock – Director

David Blaiklock previously served as the chief financial officer of Primero Mining Corp., and as the corporate controller for Intrawest Corporation. He received his designation as a chartered accountant while working with the international accounting firm Deloitte Touche Tohmatsu Limited. He has a BA in Economics and Business Studies from the University of Sheffield in England, and holds his CPA, CA designations in British Columbia and the UK.

Patricia Fortier – Director

Patricia Fortier is a former Canadian diplomat who most recently acted as an assistant deputy minister in Global Affairs Canada. She has held several diplomatic postings, including Canadian ambassador to Peru, Bolivia and the Dominican Republic, and minister-counselor at the Canadian Embassy in Washington, DC. She has a master’s degree in public administration from Queen’s University in Kingston, Ontario.

Candice Alderson – Director

Candice Alderson is currently a senior vice-president, infrastructure investments for the Ledcor Group of Companies, a privately held company that is one of the most diverse conglomerates in North America. Alderson is responsible for leading the infrastructure investment group overseeing equity investments and supporting multiple Ledcor divisions in the pursuit of major infrastructure projects. She holds a BA in political science and environmental studies (Concordia University) and an LLB (University of Victoria).

Elaine Wong, CPA, CA – Director

Elaine Wong is currently president of Pine Street Ventures Ltd., and is a seasoned executive with over 25 years of experience in accounting, finance and operations in fast growing companies. She spent 13 years with Westport Fuel Systems, a publicly listed (Nasdaq & TSX) clean technology company with a global presence, holding various senior positions including chief financial officer and executive vice-president, strategic development, responsible for strategy and mergers and acquisitions. Prior to Westport, Wong was with ISM-BC, an information technology joint venture owned by IBM and TELUS, where she was corporate controller and then director of corporate performance responsible for financial reporting and analysis. Named one of Canada’s Top 100 Most Powerful Women in 2010, Wong earned her chartered accountant designation in 1993 while working with KPMG and is also a certified public accountant in Illinois. She holds a Bachelor of Commerce (Honors) from the University of British Columbia.