[00:00:00] Liz Bothwell: Hi everyone, welcome to Waste360's NothingWasted! Podcast. On every episode, we invite the most interesting people in waste recycling and organics to sit down with us and chat candidly about their thoughts, their work, this unique industry and so much more. Thanks for listening and enjoy this episode.
[00:00:26] Liz: Hi everyone. This is Liz Bothwell from Waste360 with John Hanselman CEO of Vanguard Renewables. Welcome back, John. Thanks for being on the show again.
[00:00:37] John Hanselman: Thanks, Liz. I'm delighted to be back.
[00:00:40] Liz: I know you and I have chatted previously, but those who didn't hear that-- Could you just give us a quick overview of your background in the industry?
[00:00:50] John: Sure. Vanguard Renewables was started almost seven years ago. We are food waste recyclers. We take organic materials to farm-based anaerobic digesters all over New England currently, but we're also now building in five other states. We are taking that food waste that is unusable, taking it from landfills and incineration, putting it into our large anaerobic digesters where we remove the gas from the food waste that's latent there and turn that into renewable, natural gas, or renewable electricity.
Then, we have the liquid byproduct, which is a low carbon fertilizer, which we give to our farm partners to help their regenerative agriculture practices. It's been a really exciting time for us.
[00:01:47] Liz: It has. I can't wait to hear more because I know the last time we spoke, it was pre-pandemic and we were blissfully unaware of what 2020 would bring. How has COVID-19 affected your business?
[00:02:03] John: It's been very interesting to try and deal with it. The thing that is most surprising to us is, we've been able to really continue to move forward with the expansion of lots of new anaerobic digesters, but almost more importantly, bringing some really major players in both the food industry and the energy utilities business into our partnerships and into our alliances, being able to really move the needle during this at scale.
[00:02:37] Liz: That's great. I want to ask you about your new facility, but I know you're talking about the Alliance and I'd love to hear more about that. I read something about a Farm Powered Strategic Alliance, can you dig into that a little bit?
[00:02:51] John: Yes, it's probably one of the most exciting things that we did last year and something that- again, it's been years in the conceptional stage, then probably the last year and a half to get it to formation. What we did was to set out to find a different pathway for Fortune 500 companies to decarbonize their manufacturing facilities by using food waste recycling. What we did is met with several large food manufacturing businesses, and show them a pathway that we thought would really change their decarbonization strategy.
As you do know, every Fortune 500 company has set some type of target for greenhouse gas reduction, renewables, or climate impact reduction. What we want to do is show them that there's a very, very simple pathway internally, to get to some of those goals. To do it through there, we're using their organic waste and converting it to renewable energy, which we can then send back to them.
The Alliance was formed with the founding members Unilever, Starbucks, the Dairy Farmers of America, and us to start the organization, which we hope will become much, much larger. We have several other entities that are looking to join as we speak. The goal is to really show them that they could make a couple of simple changes on their internal waste stream management. That would really convert to have a huge impact on their own greenhouse gas and climate issues, and give them that the simple pathway to change what they're doing.
The idea, really, with the Alliance, is for them to make the commitment, to send all their food waste to an anaerobic digester on a farm. To use that farm, to use that for regenerative agriculture, returning those nutrients back to the soil, then taking the gas that we've removed from the food waste and using that in their manufacturing facility to decarbonize their operations.
That, for us, is something where if we can give them best practices, if we can show them how to do it, it then becomes what we hope is viral, so that other companies seeing that folks like Unilever, Starbucks, and DFA have embraced this methodology, they understand that it's really not that scary and it's not that hard. The Alliance is really there, first, to create a commitment on behalf of the organizations, but then, more importantly, to really create those best practices that we can then disseminate to the rest of the industry.
[00:05:43] Liz: That's great to hear that you're working so closely with waste generators like that. You're helping them formulate these plans, is there a plan to document and capture data around this and just follow this whole path?
[00:06:01] John: A hundred percent. You hit the nail on the head. Our goal is, we come in and work with the corporations and really do a waste and energy audit upfront to look at what the possibilities are, and the potential for diverting that food waste to a digester. Once we've scoped and sized the opportunity, then we'll have those digesters either in place or built to suit once we know how large we need to make them, and how many we have to build at any one cluster.
Then the goal is to really create a wonderful feedback loop where we're monitoring the amount of greenhouse gas that we're capturing from their food waste, we're monitoring how much renewable natural gas they're using at the facility. Those two are extremely impactful for the scope one and two emissions that, obviously, everyone is trying to respond to. In addition, if they bring in supply chain partners, which is already happening with us, with the Unilever teams, is we then can say, "Okay, great. Now you've got scope three emission reduction, too".
As all of those, scope one, two, and three emissions become more and more of a premier concern, as the ESG Movement on Wall Street is gaining strength, and folks are really being pushed to prove and to show that they've had real change and real reduction. This is a really simple way to do it. It's internal, not external so you can show how you're doing it at your own plants, and I think that's really powerful.
[00:07:43] Liz: That is powerful. It lets them have some control over this. That's fantastic. John, what ultimately is the goal beyond that? Do you want to expand into working with more waste generators?
[00:07:54] John: Sure. Yes, the whole idea for us over the next five years is really to broaden the Alliance. We've already had utility partners who want to come in and be part of that virtuous circle. Getting that food waste to the digester, getting the gas back to the corporations, and to add other participants so that our goal upfront is to really focus on the food industry, and the utility industry because those are the two major actors.
We're already selling renewable natural gas to Middlebury College in Vermont, out of our digester there in Salisbury, Vermont. I think there are a lot of other entities that would like to be part of the virtuous circle. Obviously, for us, having a home for the gas is critical for our financing, so we're delighted to bring other people into the equation. We see that really almost any marketplace in the United States is appropriate and available for food waste recycling. Our goal, obviously, is to go across-- it's not, "Obviously." But our goal, clearly, is to build anaerobic digesters on farms throughout the United States.
[00:09:13] Liz: Fantastic. I know that you did just open a new organic recycling facility in Agawam, can you talk about that?
[00:09:20] John: Yes. What we've found is that putting the burden on decontaminating, separating, or depackaging organic waste on the corporation is very hard. They've got more than enough that they're doing on any given day. Asking for more training and more work on the back end of the plant where really is out of sight out of mind, people really see waste as something that they want to put on the end of the loading dock and have it disappear. We understood that, and we've heard that loud and clear from so many of our partners, and so many potential partners.
What we said is, "Let's really embrace that, understanding that we want to take food waste, unusable food in any form that it comes", cans, frozen, contaminated, pre-consumer, post-consumer. We don't care. Our goal is to get all of that into a digester on a farm, to get those nutrients back into the soil, and get that gas back to someone who can use it to decarbonize our operation.
We built what we think is really a state-of-the-art system in Agawam, Massachusetts is our first one. We're now building them both, this one would be a hub and spoke model. This depackaging facility will actually feed four of our digesters in Massachusetts and Vermont. What we're looking to do in the future is continued that hub and spoke, but also to start building more and more that depackaging capacity at the farm.
It was an important first step for us to get one of these up and running. It's quite a joy to go out to it. It's a brilliant system, and that seemed self-congratulatory [laughs]. We had a lot of external help in designing the system, and we're able to process any materials except glass, that's our only prohibition.
[00:11:24] Liz: That's pretty special though. What type of volumes can it handle?
[00:11:30] John: It is permitted for 250 tons a day; we think we'll probably get to about 200. I think we're probably not going to push it on two shifts. If we added a third shift, it would certainly go to the 250 and some, but we've seen remarkable uptake already. That's really one of the fun parts, which is we have not done a lot of external outreach, and just with our existing portfolio of customers, we're about half full at this point. We just opened, and are still [laughs] burning the system in. It's way ahead of projections, and something that we're delighted to see functioning.
[00:12:11] Liz: Definitely. Especially considering that you opened it during COVID, that's pretty amazing in itself.
[00:12:17] John: [laughs] Yes. We didn't intend to raise the degree of difficulty that high, but you take what you get, and what you're given. We have had lots and lots of safety protocols, we've got full of best practices at the system to make sure that we're COVID safe, but it is certainly added a new wrinkle.
In some respects, we've got more feedstock because of COVID, and in other respects, we've got a lot less. It's funny how different segments of the market are up, and other segments of the market are down.
[00:12:58] Liz: Are you referring to residential versus commercial?
[00:13:01] John: Exactly, yes. We built the system so we could handle post-consumer waste out of restaurants, casinos, colleges, universities, and that marketplace is almost evaporated, but from the folks who are doing food manufacturing, we're seeing lots and lots of volume. Those guys are trying to keep up with the retail demand, we see a lot of off-spec product and things that are losing temperature in transport, or waiting in the distribution centers. That's the stuff that comes to us quite frequently.
[00:13:40] Liz: I bet. John, can you describe the process of actually getting the food waste, collecting it, and then the path it takes to get to energy for the grid?
[00:13:53] John: Sure. Food waste comes to us now in virtually every form, can come to us in a tanker directly from a factory if someone is running a large scale of food process. We'll get dairy waste, cheese waste, we've got ice cream in volume where it's the washout of the system. If someone is cleaning out a system before they run a new flavor, that wash water and all of the excess product will come to us in tankers.
We also get roll offs in our system. Each farm is set up to accept anything that can come to it that isn't contaminated. The farms are limited today, and we're building a lot more capacity in there to pull out contaminants, but the farms mostly are taking clean materials. We'll take clean liquids, clean solids, and we can accept both. We've got strategies and mechanics of both, so that we're able to take a roll-off to take a compactor, to take a tanker at any of the farms.
If a product is contaminated, it's in packaging, it's frozen, it's in cans, all of that goes to the depackaging center, or what we call, our organic recycling facility. It's really an organic transfer station, what we do there is separate mechanically, we remove, we squish and press the organics materials out of the packaging, or separate it from the contaminants if it's MSW, or stuff like that. Then, that material is stored at the site, put into tankers. We like to get it to a semi-liquid oatmealy form.
That gets sent up to all the farms where it's then put into large million-gallon tanks, which you can [unintelligible 00:15:57] we think of as a million-gallon stew pot. We raised the temperature up, we add manure from the farm in. The manure from the farm has wonderful, naturally occurring-- the gut flora of the cow has these wonderful little bugs in it called methanogens. Those bugs love food waste, they're a lot like us. They love fats oils and greases, they love sugar and carbohydrates, they eat the food waste molecules, and they emit methane.
We collect that methane in the headspace of these big tanks, we dry it, and then either use it to power a renewable electricity generator, so it can create renewable electricity on the site. We also then dry it and inject it into the natural gas grit, so that we can actually now return renewable natural gas into the system. We've been send those molecules off to our customers like Middlebury College or Unilever Dairy Farmers of America, and they then get the wonderful benefit of negative. The incredibly cool thing about renewable natural gas, just a little side, is that it's actually carbon negative.
Solar and wind is carbon neutral, but because we're sequestering methane that would otherwise go into the atmosphere, we actually have carbon-negative fuel, which is remarkable. That's the first of its kind in the renewables market. That is a very powerful tool if you're looking to cut your carbon footprint at a facility.
When we're done taking the gas out of the food waste and the manure, we get this wonderful liquid fertilizer that's actually odor-free, which if anybody grew up next to a farm like I did, our downwind neighbors are really excited about every digester we build.
It's also quite potent, it is organic. Unlike the synthetic fertilizers that most of our farm partners have been using over the past generations, they now have an organic fertilizer, so those food nutrients that were extracted from the soil to make food are now being returned to the soil. That's the core of regenerative agriculture. That's something that, again, we didn't really understand how important and powerful that would be when we started the company, but it's something that has become really critical to our mission, and something that's very important to all of our corporate partners because they're all looking to reconnect with American agriculture and the American farmer.
This is something where is unexpected and unanticipated how strong and important that product would be as part of the process, but it's been really exciting for us. We give that low carbon fertilizer to our host farmers and all of his neighbors. We also extract the dry solid material and give that back to the farm for bedding for the animals or for composting. Also, is extremely effective for them. Lots of moving pieces, can be a little scorecard to keep track of all the different critical interactions there, but it's a really different model for food manufacturers and American farmers to work together to change the way that we've been doing it. Instead of running parallel, they now run in this wonderful circle.
[00:19:48] Liz: Absolutely. It's very cool to hear the whole process and the whole idea of the negative emissions. That's unbelievable.
[00:19:59] John: Yes.
[00:19:58] Liz: I'm thinking of ESG reports and the way that they run the reports it's hard to gauge environmental services companies in the right way with the right numbers. This is so new; how do you think that will be looked at higher level?
[00:20:18] John: Yes. It's very straightforward. The nice thing about this is we're counting molecules. This it's quite quantifiable in California, the California Air Resources Board have actually already built this thing called The Greek Model, which I can't remember what the acronym stands for, but it really is how to grade and calculate the carbon negative impact of every molecule that goes to this system.
That's been years in the making, we're delighted to be able to just use that technology or that methodology. We can make a very clear report, we know the tonnage of food waste that's coming in, we know the energy content that's in the food waste, we know where our extraction values are, so we're able to then report that back to any one of the contributors. If they're actually buying the renewable natural gas to offset their Brown's gas that they're using in the factory, that's also incredibly straightforward molecule camping.
To your point, a lot of the ESG stuff has been pretty fuzzy, and I think Wall Street is pushing very hard. We hear this every day from all of our alliance partners and our future alliance partners that they need something concrete to be able to report that they're doing differently. Food waste recycling is so simple and easy to show the efficacy of the model. It's pretty big.
[00:21:52] Liz: That's great. Like you said, there are a ton of moving pieces and that's a whole side benefit of really working for the farmers. Is great. Are you seeing more buy-in across the board since the last time we spoke for the work that you're doing? Whether it's hollers, residents, or even the farmers themselves?
[00:22:12] John: One of the greatest things about my job is I get to talk to farmers every day, and I've never met one who didn't want to be a better steward of land. They understand climate change in their gut because they see it every day in their harvest, they see the change in the seasons, they see how so many of the things that were predictable for their parents and their grandparents aren't predictable now. The buy-in there is immediate.
I think the challenge for us seven years ago when we started was that a lot of the farm community have had either no experience or a negative experience with some of the old agricultural digesters that were around in the '80s and '90s. Those weren't particularly effective and actually were pretty hard and required the farmer to do all the work. What we did is create a very different model. It's a very tech heavy model, we've got bells and whistles, lots and lots of monitors.
What most importantly we did is we took it back the management of those facilities. We said, "This isn't going to require you as a farmer to add another tour onto your day. Let us manage the systems, we'll put people on-site, we've got all sorts of networked alarms, and monitors, and bells back to the home office so that there is low touch from our farm partners." I think they've really appreciated that.
The word gets out quickly. If you do something good in the farm community, or bad in the farm community, it's very easily disseminated. We work really hard to be a good partner with all of our farmers. I think they've appreciated and that allowed us to grow exponentially.
[00:23:58] Liz: I bet. I know at the top level there's going to be a change in the administration. Do you think with that change that anything will be done in terms of investment in the environment and more buy-in in the work that you do?
[00:24:18] John: We're certainly hopeful. I think our system is so straightforward and something that I think, because of the fought back in the day that it was pretty small contributor to the greenhouse gas problem, we got overlooked a lot. I think that as we've changed our conversion technologies, we've gotten more and more effective, the thought in the US is that there's something like 10% to 15% of the total natural gas usage in the entire US could be from renewable natural gas from food waste. Or from organic manure, sorry, that's food waste and manure.
That's, I think, even a conservative number, and yet, that's a real massive impact if you think about the fact that it's 10% to 50% of the natural gas, but in fact it's also carbon negative. It's a multiplier effect, we can really knock a whole lot of that carbon intensity out of the natural gas system. The natural gas system isn't going away; people have often said we can electrify the United States.
Well, 60% of all the electricity in the US, I may be mistaken the number, but I think that's close, is created by natural gas. Of course, the thermal, if you're trying to heat your home or heat water for a manufacturing facility, most of that is done with natural gas. Decarbonization has to have both electrification and renewable natural gas as two different legs on the stool.
[00:26:02] Liz: Are you watching your neighbors in New Jersey? There's so much going on there in terms of environmental policies, especially around food waste. Once, I read about the food waste law, that's pretty aggressive, I was thinking that perhaps they would contact you because they're in need of much infrastructure. Last time we spoke we were talking about how this model could really work anywhere.
[00:26:32] John: Yes. We're down in New Jersey now, we are working with the state and with some municipalities looking to site infrastructure to help them. They've set a very aggressive goal, which is fantastic, but they need the infrastructure, it's a chicken and the egg. We saw this here in Massachusetts and in Vermont when they both set very aggressive goals for food waste recycling. We're looking for the private sector to do all of the infrastructure development.
Good news is since we've already done it several times before it's really straight forward. At the moment, we're out looking for locations for the packaging facilities, we're looking for farms, and that really runs to the entire East Coast now. We see that, if we're fortunate, we've got States like New Jersey and Massachusetts, and municipalities like New York that are pushing for food waste recycling. In other communities, I think we're able to pull through that food waste by showing the efficacy of the decarbonization strategy. It's a two-prong effort, but we see this as really a US opportunity, not just a market by market opportunity.
[00:27:56] Liz: That's great. Like you've said, this model really would work well anywhere.
[00:28:03] John: It does.
[00:28:03] Liz: That's not always the case, so that's fantastic.
[00:28:06] John: [laughs] No.
[00:28:08] John: I also read that Vanguard Renewables received the 2020 Energy Vision Leadership Award. That sounds pretty awesome, tell me about that.
[00:28:17] John: We did; we were so proud. We got a wonderful note from the folks at Energy Vision, who we've known for a long time. They're an advocacy group that is working for renewable natural gas inclusion in America's decarbonization strategy. They chose the city of Seattle and us, imagine. Actually, I'm sorry, also I think the New York Transit Authority, MTA.
We figured we were in pretty good company. We're the little guys. Sea-Tac airport and the MTA, overall, have done phenomenal things with natural gas vehicles and renewable natural gas vehicles for the Sea-Tac airport and for the city of New York. I guess they look at us on the supply side as somebody who's really doing something different. We were fortunate enough to get the recognition and get the award. We were just sad that we couldn't have a big gala night out [chuckles] because of the COVID, but we'll make up for next year.
[00:29:29] Liz: [laughs] Right, exactly. Lots of that is on hold, and I think these are going to be the best celebrations ever.
[00:29:36] John: Watch out. It could be a really messy series of evenings and we have to make up for an entire year of sitting in your living room.
[00:29:45] Liz: Exactly [laughs]. I love it. Tell me what's on the horizon for Vanguard, besides really expanding throughout the entire US?
[00:29:59] John: Yes. It's really going to be exciting several years for us. We're now on two tracks, one is to try and capture the manure of large-scale manure operations to work with our partnership with Dominion Energy, and then to really capture food waste through the Farm Powered Strategic Alliance. We've got a lot on our plate, but we see that the time is now. It's important to take advantage of that opportunity. As folks who've been working to get the bugs out of the system our last seven years, we think that timing is remarkably good.
[00:30:41] Liz: It is, and you have proof of concept, you have more buy-in. It just seems like all the stars are aligned for a really great future.
[00:30:49] John: Yes, we just need to get rid of this damn pandemic, and then we're all good.
[00:30:52] Liz: Right, exactly. Fingers crossed, we have to have a brighter '21.
[00:30:56] John: Please, I agree.
[00:30:59] Liz: John, before I let you go, did you want to share anything else about the Farm Powered Strategic Alliance or anything else that we didn't get in?
[00:31:09] John: No, I think we've done a really good job. For us, we just think that creating a new model of organic recycling is something that the time is right. I think America is going to embrace. Our proof is in the [unintelligible 00:31:26] with our good friends at Unilever, Starbucks, and Dairy Farmers of America, they've leading the charge, and we think it's a wonderful call to action for a lot of other Fortune 500 to jump on board.
[00:31:39] Liz: Definitely. You have to promise to keep us posted as you start rolling out results, so we can share those and let the world know how well it's going.
[00:31:48] John: Guaranteed, we are not shy.
[00:31:52] Liz: That's good [laughs]. John, thanks so much for taking the time to talk to me again. Here's to a brighter '21. I hope to chat with you soon.
[00:32:04] John: I look forward to a glass of champagne somewhere outside of my living room.
[00:32:08] Liz: Yes, I'm with you [laughs].
[00:32:11] John: I'll see you there.
[00:32:13] Liz: Okay, sounds good. Thanks, John.
[00:32:15] John: Excellent, thanks so much.