News Release

Alternative fuels M&A focus turns from policy boosts to business resilience

Creative monetization strategies drive recent transactions

byEnverus

CALGARY, Alberta (Dec. 18, 2024) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released an analysis on strategies driving M&A activity in alternative fuels and how they will influence future capital deployment.

In the report, EIR shows that deal flow in the alternative fuels sector has surged over the past four years, driven by regulatory incentives and the maturation of technologies that lower investment risk. The report takes a deep dive into notable deals across five fuel types to determine the most dominant strategies driving M&A activity and speculates on the implications for future capital deployment in the sector. Overall, regulatory incentives emerged as the clear driving force behind alternative fuel M&A, followed in importance by vertical integration, sustainability goals, feedstock availability and technology advancements.

“Regulatory incentives emerged as the clear driving force behind alternative fuel deals, reflecting the sector’s dependence on government support for momentum and market stability,” said Heather Leahey, principal analyst at EIR.

“Recent transactions are increasingly targeting credit stacking opportunities and/or voluntary market support to cushion against policy uncertainty and weaker credit fundamentals. Furthermore, industry decarbonization targets are enhancing demand for low-carbon fuels by drawing in a wider range of offtakers with longer time horizons and buyers for the associated carbon credits,” Leahey said.

Key takeaways from the report:

  • Regulatory incentives are the clear driving force behind alternative fuels M&A, reflecting the sector’s dependence on government support for momentum and market stability.
  • Recent transactions are increasingly targeting credit stacking opportunities and/or voluntary market support to cushion against policy uncertainty and weaker credit fundamentals.
  • Industry decarbonization targets are enhancing demand for low-carbon fuels by drawing in a wider range of offtakers with longer time horizons.
  • Landfill gas-to-RNG developers may be more amendable to 120% IRRs in the voluntary market at $25/Mcf premiums, 60%-70% lower than in the transportation market, because of longer-term, stable contract structures.
  • Value chain integration enables acquirers to unlock operational and supply chain enhancements, access complementary technologies and compound credit stacking opportunities.
  • Cumulative alternative fuels deal flow sits at $28 billion since the start of 2021, more than double that of all other carbon innovation technologies combined. RNG and renewable diesel dominated the space, while more novel technologies like sustainable aviation fuel are gaining momentum.
Graph showing Carbon Innovation Cumulative Deal Flow by Technology Type since 2021

EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research and Enverus Energy Transition M&A.

You must be an Enverus Intelligence® subscriber to access this report.

About Enverus Intelligence® Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers and more than 40,000 suppliers. Learn more at Enverus.com.

Picture of Enverus

Enverus

Energy’s most trusted SaaS platform — creating intelligent connections that uncover insights and opportunities to deliver extraordinary outcomes.

Related News

Enverus Press Release - DUC Hunt: What the 2025 drawdown means
News Release
ByEnverus

Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is releasing a report that analyzes recent inventories of drilling uncompleted wells (DUCs) and the implications for 2025 budgets.

Enverus Press Release - Class VI wave expected to hit US
News Release
ByEnverus

Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released a report and overview focused on recent changes and additions to the growing list of Class VI...

Enverus Press Release - E&Ps with natural gas + CCS pave way for model data center development
News Release
ByEnverus

Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has developed new capabilities to help site data centers using data sets focused on onshore fiber cables, substation withdrawal...

Enverus Press Release - Lessons learned from Eaton and the risk of wildfires spread by transmission lines
News Release
ByEnverus

With the devastating wildfires near Los Angeles nearly 100% contained, Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released a report analyzing wildfire risk levels across...

Enverus Press Release - Enverus PRISM® now available for Europe
News Release
ByEnverus

Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is expanding PRISM, its hallmark energy decision-making platform to customers in Europe.

Enverus Press Release - Upstream M&A climbs to $105 billion in 2024
News Release
ByEnverus

Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is releasing its summary of Q4 and full-year 2024 upstream M&A activity.

Enverus Press Release - Volatile oil prices and counter-consensus natural gas supply growth leaves EIR a touch bearish
News Release
ByEnverus

Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released its latest Fundamental Edge report, which focuses on global drivers for oil and gas prices through 2030,...

Enverus Press Release - Enverus releases 2025 Global Energy Outlook
News Release
ByEnverus

Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is releasing its 2025 Global Energy Outlook, an e-book focused on pivotal North American and international energy landscape trends and opportunities expected this year.  

Enverus Press Release - RatedPower’s custom Layout Editor ushers in new era of smart energy flow
News Release
ByEnverus

RatedPower, a part of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, is releasing its new Layout Editor, a tool that empowers users to design, customize and optimize solar layouts — all within one...

Find Out How Enverus Can Help Your Business

Subscribe to the Energy Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Get Started

Register Today

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert