Food waste, yard waste and agricultural byproducts may be among the discarded materials for which a global secondary commodities market is an unlikely destination. That does not mean, however, that economic opportunities to handle these materials are nonexistent. Companies like Ontario, Canada-based Anaergia Inc. are among those offering publicly traded shares to invest in those opportunities.
Anaergia says it has taken part in building more than 1,700 resource recovery plants on four continents in the past 25-plus years. The company engages in equipment design, process engineering, equipment manufacturing, project integration, project financing and project execution to handle portions of the municipal solid waste (MSW), wastewater and agri-food discarded materials streams.
In the company’s most recently completed and tabulated financial quarter, ending June 30, Anaergia reported $1.7 million ($2.2 million in Canadian dollars) in net income on $25.2 million (CA$32.1 million) of revenue. The firm cites “activity in both the Europe, Middle East and Africa (EMEA) and North American markets” for results that improved on financial losses and just $17.6 million (CA$22.4 million) in revenue one year earlier.
Buying into the momentum
In August, Anaergia completed the purchase of the Rhode Island Bioenergy Facility, which previously had been an indirect subsidiary of the company known as Orbit Energy Rhode Island LLC. Anaergia describes it as the largest industrial AD plant for food and other solid organic waste in New England.
The Johnston, Rhode Island, AD plant can process more than 100,000 tons of organic waste each year, converting it into energy [a natural gas equivalent], fertilizer and water “while reducing greenhouse gases,” says Anaergia.
“We are very pleased to welcome Anaergia to Rhode Island,” Rhode Island Commerce President Jesse Saglio said as part of Anaergia’s August announcement. “This facility will not only help the state achieve its waste diversion goals, but [it will] also add new food-related jobs to our economy. Anaergia complements other food-related investments made recently in the state, and this plant helps provide security to the future growth and success of this important industry.”
“Our acquisition of this facility extends Anaergia’s own-and-operate activities to the East Coast of the U.S.,” Anaergia chairman and CEO Andrew Benedek said at the time. “This facility enables Anaergia to invest in sustainable infrastructure that generates high-tech jobs, serves the community and expands our capacity to generate carbon-negative fuel.”
Pacific coast presence
Earlier in 2021, Anaergia announced a planned investment on the West Coast, signing an agreement with Carlsbad, California-based Universal Waste Systems Inc. (UWS) to construct an organics waste processing plant in Los Angeles.
Located at a UWS material recovery facility (MRF) in California’s largest city, the project “will support recycLA’s organics waste landfill diversion efforts and will help meet organics waste recycling requirements mandated by California Senate Bill 1383,” according to the two companies.
An Anaergia Organics Extrusion Press (OREX) will be installed as part of the facility’s MSW processing line to “recover organics from contaminated MSW through high-pressure extrusion.” The two companies predict the OREX will divert up to 300 tons per day of organic waste from the Los Angeles MSW stream and produce energy from discarded organics previously destined for a landfill. The project is expected to be operational by the end of this year.
“Our long-term partnership with UWS will reduce greenhouse gas emissions through the conversion of landfilled organic waste into carbon-negative fuel, thus contributing to a circular economy,” Yaniv Scherson, Anaergia’s western region managing director, said at the time.
“Partnering with Anaergia in extracting value from everyday waste streams aligns with UWS’s commitment to support a sustainable future,” remarked Mark Blackburn, UWS’s president.
The two companies forecast the project can reduced greenhouse gas (GHG) emissions by more than 70,000 metric tons per year while “generating enough energy to displace more than 2.5 million gallons of diesel fuel per year.”
Under a separate agreement, the recovered organic waste will be processed by Anaergia’s affiliate, Rialto Bioenergy Facility LLC (RBF), in Rialto, California. At that AD facility, the diverted organic material will be converted into what Anaergia calls “pipeline-quality renewable natural gas” and fertilizer.
Construction of the Rialto facility started in late 2018, and the project was marked by collaboration with a number of major players in the U.S. solid waste and recycling sector.
As conceived, the RBF plant can convert 700 tons per day of food waste and 300 tons per day of biosolids into natural gas, electricity and fertilizer. At the time the project commenced, Anaergia said it would hold the title as “the largest food waste diversion and energy recovery facility in North America.”
That large scale includes the ability handle some 300,000 tons per year of discarded organics while producing the equivalent of 13 megawatts of energy annually. “The net carbon dioxide emissions reduction will be approximately 220,000 metric tons annually, which is the equivalent of taking 47,500 cars off the road,” says Anaergia.
Anaergia says the plant was built in collaboration with Houston-based Waste Management Inc.; Phoenix-based Republic Services; the Sanitation Bureau of the City of Los Angeles; and the Sanitation Districts of Los Angeles County and Orange County; CalRecycle; and several regional utilities and additional government stakeholders.
“We are proud to be working with industry leaders in the solid waste, wastewater and renewable energy industries to build one of the largest organics recycling facilities in the world serving the Southern California region,” Benedek said at the time of the announcement. “Our new plant will demonstrate a truly sustainable and replicable way to meet the state’s organics diversion and recycling needs.”
The road ahead
Building scale and a profitable second quarter go into the “good news” column for Anaergia. CEO Benedek, however, says COVID-19 and other factors remain capable of producing disruption in the energy conversion market.
“The financial results we are reporting today reflect Anaergia’s strong year-over-year growth,” said Benedek in mid-August when announcing the second quarter results. “Furthermore, our rising revenue backlog bodes well for continuing revenue growth, and rising profitability, in future periods.”
Continued Benedek, “While this ramp-up in revenues is gratifying, we are currently monitoring the continued impact of the COVID-19 pandemic on business activity levels in California. In particular, owing to the COVID-19 pandemic, we are seeing slower than previously anticipated escalation in the volumes of organic waste being shipped to our Rialto facility near Los Angeles. This is temporarily delaying the expected financial contribution from this facility.”
The outlook in Europe, where circular economy proposals and targets are spurring ongoing investments, could be brighter in the short term, he says.
“We are seeing stronger than previously anticipated demand for our integrated solution in Europe,” states Benedek. “We now expect that increased sales in Europe will offset the financial impact of the slower than previously anticipated ramp-up at Rialto. Therefore, we currently foresee no discernable change to Anaergia’s previously disclosed financial outlook for 2022 or 2023.”
Having completed its initial public offering (IPO) this summer, Anaergia refers to itself as having a “first-mover advantage” for those who want to invest in “the only global market participant with end-to-end solutions for organic waste problems, including processing of solid waste streams (MSW, source-separated organics and commercial waste), wastewater sludge and agri-food waste.”
The company says it sees not only more projects on the horizon globally, but says Anaergia has more than 230 “active and pending-patent filings worldwide.” Anaergia says the patent for its OREX organics extrusion technology has recently been upheld in a European court, “supporting the strength of our competitive position.”
In addition to touting its own technology to investors, Anaergia points to a circumstance well-known to those who make their living in the waste sector: “Increased global awareness of landfill constraints and the environmental impact of waste are driving organics diversion regulations. These regulations are dictating minimum organics diversion targets in many jurisdictions, providing line of sight to a growing global need” for AD facilities and similar investments.