Peas and Pipelines: PepsiCo Goes Big on Biomethane

ENGIE will build a Northern England AD plant supplying PepsiCo with 60 GWh of biomethane annually from 2027

7 Apr 2026

ENGIE and PepsiCo have struck the UK's first biomethane supply deal in the food and drink sector, a 10-year agreement that trades carbon credits for real infrastructure and long-term certified renewable gas.

Under the contract, ENGIE will build a new anaerobic digestion facility in Northern England, converting locally sourced agricultural waste and rotation crops into 60 GWh of biomethane per year. All output goes directly to PepsiCo's UK supply chain, with deliveries set to begin in 2027. The £70 million project is expected to cut PepsiCo UK's annual carbon emissions by more than 10,900 tonnes against 2022 baseline levels.

It's also PepsiCo's first biomethane purchase agreement across its Europe, Middle East, and Africa operations. That matters. Rather than leaning on offset credits, the deal locks in a durable supply tied to physical production, a meaningful distinction as corporate decarbonization commitments face growing scrutiny. ENGIE's executive vice president Cecile Previeu framed the agreement as critical to Europe's energy sovereignty, while UK Energy Minister Lord Whitehead called the investment a growth driver for the North of England.

For ENGIE, the deal advances its target of reaching 10 TWh of annual biomethane production capacity across Europe. The company currently runs 1.2 TWh across 42 anaerobic digestion sites in France, England, Belgium, and the Netherlands, and sees long-term industrial offtake agreements as the engine of its expansion. The Northern England plant will draw feedstock from local farms and return digestate as a natural soil enhancer, creating a closed loop that benefits surrounding agricultural communities.

The backdrop makes the timing pointed. Fewer than eight percent of Europe's biogas plants are currently upgraded to produce pipeline-quality biomethane, leaving enormous latent capacity idle. UK deployment has stalled despite strong industrial demand, and bilateral supply agreements are increasingly recognized as the mechanism capable of unlocking new project finance. As food and beverage manufacturers face intensifying pressure to cut operational emissions, the ENGIE-PepsiCo model looks less like a one-off and more like a template.