Ashfords advises VTTI on bringing an anaerobic digestion project to financial close

Ashfords’ Energy & Resource Management team has helped VTTI, one of the world's leading energy companies, to bring its first anaerobic digestion project in the UK through to financial close. The project, based in Lincolnshire, is expected to produce 6 million m3 of biomethane (RNG) per year, processing organic side streams including a mixture of locally-sourced agricultural wastes, residues and break crops in an anaerobic digestion (AD) process.

The plant will inject the upgraded biomethane into the gas grid, to be used either as a fuel for heating or electricity production, or as a renewable transport fuel, helping to reduce the UK’s dependency on fossil fuels. The nutrient-rich digestate by-product will be used as a soil improver on nearby farmland, reducing reliance on fossil-fuel intensive artificial fertiliser products in the local economy. In the future, there are plans to capture and sell biogenic carbon dioxide for use in industry. 

The use of wastes and residues as a feedstock will help close the nutrient cycle and avoid fugitive methane emissions that would arise from alternative disposal methods. 

The cross-office, cross-department Ashfords team advising VTTI was led by Commercial partner and Decarbonisation & Energy Efficiency lead Jonathan Croley, along with Real Estate partner Emma Warren, assisted by Alex Moast (Real Estate, Solicitor) and Ben Thomson (Commercial, Associate). Ashfords advised on the real estate aspects (options, leases, easements), commercial aspects (including the feedstock supply, digestate offtake and private wire electricity offtake agreements) and corporate elements (the acquisition of the development company). 

Jonathan Croley, Partner, commented: “We are absolutely delighted to assist VTTI on bringing this project through to financial close, which represents a significant threshold for VTTI in its ambitions to invest in renewable energy infrastructure in the UK. It was a pleasure to work with the VTTI team who engaged with the legal aspects of these projects with great pragmatism, focus and humour. Having advised on a great number of AD projects over the past decade, it was fantastic to once again deploy the strength and depth of our practice and expertise towards a greener, lower carbon future.”

Daniel Purvis, Vice President RNG at VTTI, said: “Ashfords brought a wealth of knowledge and experience to the transaction, in particular providing astute and pragmatic commercial solutions to the feedstock and digestate contracts”. 

Talitha Fernandez, Vice President Legal and Compliance Officer at VTTI, added: “The negotiation of contracts and structuring of the deal required in-depth industry knowledge, and we were fortunate to be able to rely on Ashfords' experienced and insightful team. We are delighted to have concluded this transaction, which is a stepping stone for VTTI’s ambitious RNG growth plans in the UK."

VTTI provides traditional energy storage solutions globally, as well as new energy solutions in renewable natural gas, waste to fuels, hydrogen and more. Located at major shipping crossroads and supply gateways, VTTI provides over 10 million cubic metres of storage capacity across five continents. It is currently constructing a flagship biomethane plant in the Netherlands, producing 23 million m3 of biogas per year, of which a part will be upgraded to (RNG) to be delivered to the gas grid.

For more information, please contact Jonathan Croley.