L’Oréal Renewable Natural Gas Project Poised to Set New Industry Standard

Guided by its Sharing Beauty with All global sustainability program, beauty giant L’Oréal has revealed plans to achieve carbon neutrality by 2019 for all 21 of its US manufacturing and distribution facilities. At the heart of this strategy is the expansion of its diversified energy portfolio to include renewable natural gas (RNG) purchased from a new processing facility in Kentucky. The RNG purchased from the new project alone is expected to eliminate the carbon equivalent of 1.8 million gallons of gasoline consumed per year.

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“Achieving carbon neutrality for all of our operations facilities furthers our commitment to being a sustainability leader in the United States,” said Frédéric Rozé, President and CEO of L’Oréal USA. “We have seen that a dedication to sustainability fosters innovation, inspires creativity and builds a strong team spirit. This new milestone can be credited to our passionate teams and their vision in finding a new renewable energy approach that benefits one of our local communities while being a long-term, financially viable solution.”

In 2017, L’Oréal USA, a top performer on CDP’s corporate climate action A-List, surpassed the company’s 60 percent carbon emissions reduction goal in absolute teams, reaching an 84 percent reduction from a 2005 baseline and achieving 100 percent renewable electricity for all 21 US manufacturing and distribution facilities. Tackling carbon neutrality is the next logical step for the company.

As the world’s largest cosmetics company, L’Oréal is uniquely positioned to shape energy markets and lead the transition away from fossil fuels. The company's latest commitment demonstrates to the industry — and the market as a whole — that cleaner fuels make economic sense — a concept that is gathering steam as evidenced by an ever-increasing number of corporations committing to 100 percent renewable energy by 2020.

After an 18-month research phase, during which L’Oréal sought a local strategy that would deliver positive impact for both the company and the local communities in which it operates, the team identified a potential renewable energy production solution using landfill gas (LFG) from the Big Run Landfill in Ashland, Kentucky. L’Oréal has signed a 15-year agreement to purchase approximately 40 percent of the RNG produced from the Big Run Landfill, which is located 135 miles away from the company’s Florence, Kentucky plant. The RNG L’Oréal USA purchases will be directed into the interstate natural gas transmission system. The company’s long-term purchase commitment of the RNG was a key underwriting component that led to the financing of the project.

Ultra Capital-owned Big Run Power Producers will break ground on a new processing facility in March that will process the LFG from the landfill and condition it for use as pipeline quality RNG. The plant is expected to be completed by the end of the year.

“This accomplishment would not have been possible without our team’s determination to tackle the carbon emissions from our own heating systems, a difficult challenge shared across industries,” said Jay Harf, VP of Environment, Health, Safety and Sustainability for L’Oréal Operations Americas. “We are proud to have found a local solution and approach with the potential to be replicated at landfills across the country.”

To ensure the financial sustainability of the project (RNG costs are eight times that of non-renewable natural gas), L’Oréal will sell its environmental attributes into the transportation fuels market for approximately five years, which will help fuel producers to comply with the Environmental Protection Agency’s (EPA) Renewable Fuel Standard. During this time, the company plans to purchase carbon offsets from an EPA award-winning RNG site. After a period of five years, L’Oréal plans to use the environmental attributes to maintain its carbon neutrality for all 21 of its manufacturing and distribution facilities.

This use of directed biogas after the initial five-year period is unique in its approach and scale. LFG has traditionally been used to generate electricity or for direct use at a single site. L’Oréal USA’s approach enables the company to purchase enough RNG to achieve carbon neutrality for all 21 of its manufacturing and distribution sites, spread across 12 states, with a single solution. Given the number of landfills in the US that have the potential to convert LFG to RNG, L’Oréal’s approach could potentially serve as a model to support new renewable natural gas projects in a way that is both environmentally and financially sustainable.

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