VARO Energy to acquire majority stake in Bio Energy Coevorden
Photo courtesy of Bio Energy Coevorden

VARO Energy to acquire majority stake in Bio Energy Coevorden

VARO Energy Group, headquartered in Zug, Switzerland, is acquiring a majority stake (80%) in Bio Energy Coevorden BV (BEC), one of the largest biogas manufacturers in Europe, based in The Netherlands. 

VARO is acquiring the shares from the existing shareholders, STAK Grisbe who will continue to own 15% of the business, and Van Drie Group, who will continue to own 5%. The transaction is expected to be completed in February.

Europe is an attractive market for biogas, benefitting from high domestic feedstock availability, as well as supportive government policy and incentive structures. BEC’s established sourcing channels and world-class biogas production and construction expertise, combined with VARO’s existing feedstock sourcing, operations and trading capabilities create a strong platform to scale their biofuels business across Europe.

The transaction accelerates the ONE VARO Transformation strategy launched in July 2022. VARO recognises that a range of solutions and products are needed to help emitters to decarbonise and to protect Europe’s energy security. As part of the strategy, the company committed to becoming a leading producer of biogas in Europe, building its portfolio through both acquisition and greenfield developments.

Biogas has an important role to play in providing customers in harder–to-abate sectors such as heavy-duty transportation and shipping with a cost-competitive and low-carbon fuel supply. It also plays an important role in the decarbonisation of the agricultural sector and contributes to a circular economy,

As a result of this acquisition, the largest by VARO since 2015, and with VARO’s and BEC’s ongoing investment, the company is well placed to meet growth in European demand for both biomethane, which is expected to increase three times by 2030 across Europe, and bio-LNG, which is expected to grow by 10 times in Germany by the end of the decade.

“Last year we set out our ambitious ONE VARO Transformation strategy to be the partner of choice for customers in the energy transition and to be net zero by 2040. Today’s announcement is a significant step towards accelerating our strategy by building a leading position in biogas in Europe,” said Dev Sanyal, VARO CEO.

“The combination of this platform along with VARO’s integrated business model will not only contribute to our strategic growth but will also be highly value accretive to VARO. Large-scale biogas facilities have an important role in accelerating Europe’s energy transition—offering an alternative to conventional fuels at scale with emissions 90% lower than natural gas as well as allowing our refineries to replace their natural gas consumption with biomethane products with a lower carbon intensity. Growth in biogas will further support Europe’s energy security by diversifying supply.”

Transaction highlights:

  • Developing the largest biogas manufacturing facility in Northern Europe: double the current facility capacity from 300 gigawatts (GWh) to 650 GWh by 2026. After the expansion, the site will be among the three largest biogas facilities in Europe.
  • High impact on GHG emissions:
    • Feedstock from waste streams and manure, achieving 220,000 tonnes per year of CO2 reduction versus fossil natural gas
    • Step towards achieving net-zero Scope 3 emissions by 2040 target
    • Supports circular economy and new employment opportunities
  • Accessing rapid growth market: ideally located on the border between The Netherlands and Germany, close to major industrial centers and large-scale agriculture offering both feedstock supply and demand growth. This investment will accelerate the energy transition in these leading countries.
  • Highly efficient, cost-competitive plant: BEC has built a successful industrial biogas facility, including state-of-the-art monitoring and control systems, heat optimization and recovery systems.
  • Building integrated fuel value chain: leverages BEC’s large-scale manufacturing competencies with VARO’s integrated business model of energy sourcing, production, and exposure-management, while building one of the largest biogas manufacturing facilities in Europe.
  • Supports energy security and energy transition: boosts energy security by diversifying Europe’s sources of supply while accelerating the energy transition by replacing conventional fuels with low-carbon alternatives.
  • Progress against VARO’s new strategy: meets 65% of VARO’s 2026 target of 1 terawatts (TWh) of biomethane/bio-LNG under its ONE VARO Transformation strategy launched in July 2022. The acquisition will have a substantial contribution of 20-25% of VARO’s Engine 2 (Renewable energies) EBITDA by 2026.
  • Future Growth: this acquisition creates a platform for VARO’S future growth in the biogas industry in Europe

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