This Company's Under-the-Radar Investments Are Turning Trash Into Renewable Energy

by Matthew DiLallo (Motley Fool) -WM is investing heavily to boost its RNG output. -The move will enable it to produce more renewable energy and fuel its entire fleet. -WM is one of several companies investing heavily in the emerging RNG sector. -- The company is turning a harmful greenhouse gas into a renewable fuel.

Landfills produce an enormous amount of greenhouse gas emissions as organic waste like food scraps, wood, and paper decompose and produce methane. They released an estimated 16.8% of the country's methane emissions in 2020. Methane vented into the atmosphere is a greater contributor to climate change than carbon dioxide emissions.

One of the companies quietly working to solve this problem is leading landfill owner WM (WM -1.51%), formerly Waste Management. The collections and recycling company is investing hundreds of millions of dollars to capture these emissions and turn them into renewable energy. It's one of several companies looking to simultaneously reduce emissions while providing the country with more energy.

WM recently unveiled plans to invest $825 million from 2022 to 2025 to expand its renewable natural gas (RNG) infrastructure. RNG is methane gas captured at the source and turned into pipeline quality gas. It has significantly lower emissions than other fuel sources like gasoline, diesel, and coal.

WM is already a leader in using landfill gas. It currently captures landfill gas at 144 of the landfills it owns and operates. It feeds some of this methane into gas-to-electricity plants that produce renewable power. It also makes RNG at 16 plants that help fuel its fleet of natural gas-powered garbage and recycling trucks.

The company now plans to build 17 more RNG plants across North America by 2026, growing its RNG output by 600%.

WM is also investing in projects using methane captured at dairies to fuel its fleet and hosts several wind and solar energy projects at some of its closed landfills.

Natural gas pipeline giant Kinder Morgan (KMI -2.10%) purchased RNG developer Kinetrex Energy for $310 million last year. That company has two small-scale LNG production facilities, a 50% interest in a landfill RNG facility, and three other landfill RNG projects under development. Kinder Morgan is investing $146 million to develop those three facilities that will process gas from landfills owned by WM.

Meanwhile, natural gas fuel company Clean Energy Fuels (CLNE -1.01%) unveiled a five-year strategic and financial plan to develop an RNG supply business earlier this year. It secured investments from BP (BP -0.80%) and TotalEnergies (TTE -0.82%), which are investing up to $100 million and $400 million, respectively, into its RNG business. READ MORE