The UK low-carbon gas sector has reached an important commercial milestone. ENGIE’s newly announced 10-year biomethane purchase agreement (BPA) with PepsiCo UK - the first of its kind in the UK food and drink industry - represents more than a long-term energy contract. It reflects a step change in how anaerobic digestion (AD) and biomethane are perceived by major corporate energy users.

Under the agreement, ENGIE will develop a new AD facility in Northern England, delivering around 60 GWh of biomethane annually from approximately 2027, enough to meet the gas needs of roughly 5,000 homes. 

With an estimated £70 million investment underpinning the project, the deal is being positioned as a replicable model for sectors where electrification alone cannot fully decarbonise operations and long-term renewable gas solutions are required.

A perception shift for AD

What makes this agreement particularly significant is not just its scale or duration, but the perception shift it represents. Parts of the food and drink sector have historically been cautious about association with anaerobic digestion, particularly where animal-derived feedstocks are involved, despite the safety and regulation governing biomethane production and carbon capture. 

While this specific deal does not directly relate to carbon capture being used in food and drink products, PepsiCo’s public commitment to AD-backed biomethane is nevertheless a strong signal that the technology is earning broader industrial acceptance.

A globally recognised brand putting its name to AD-derived renewable gas helps normalise the technology, reduces lingering stigma and paves the way for wider adoption of AD-related solutions across industry, including future applications of low-carbon gas and carbon capture technologies that are fully compliant and safe.

Biomethane as a practical decarbonisation tool

This agreement reinforces biomethane’s practical role in industrial decarbonisation. For many manufacturers with high-temperature heat requirements or existing gas infrastructure, renewable gas can deliver meaningful emissions reductions without requiring fundamental process redesign. Long-term offtake agreements like this one provide developers with revenue certainty, give investors confidence and offer industrial energy users a credible route to decarbonise.

Lessons from delivery 

The dynamics behind this deal reflect lessons from projects we’ve supported over the years here at PWCL, such as the Fylde Fresh & Fabulous anaerobic digestion facility in Lancashire. 

In that project, careful coordination across planning, permitting, site design and stakeholder engagement was essential to bring AD infrastructure forward in a way that delivered operational value for local partners and the community.

At Fylde Fresh & Fabulous, the focus on integrating AD with existing agricultural and waste systems demonstrated how distributed biomethane facilities can:

• support local feedstock supply chains
• improve waste management practices
• contribute renewable gas into the network
• and create local economic value

These delivery insights, from feasibility through commissioning support, are the same fundamentals that underpin larger commercial arrangements like the ENGIE–PepsiCo deal; ensuring that technical, regulatory and commercial risk is addressed early enables projects to progress with confidence and credibility in the market.

A signal to the wider market

The ENGIE–PepsiCo deal, and projects like Fylde Fresh & Fabulous, point to a broader shift in the UK AD and biomethane landscape, as corporate demand for biomethane is real, long-term and sophisticated. 

As more major energy users signal confidence in AD-based solutions, long-held perceptions are giving way to more wide-spread commercial acceptance.

For the wider renewable gas sector, this is less about a single transaction and more about evolving market confidence; moving biomethane from niche subsidy-aligned deployment into the mainstream of commercial energy strategy.