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Highlights
- Cleanaway Waste Management Ltd (ASX:CWY) has entered a joint venture with LMS Energy Pty Ltd, focusing on processing and commercialising landfill gas at Lucas Heights landfill, New South Wales.
- LMS Energy will invest $46 million in a new 22MW bio-electricity generation facility to replace existing infrastructure.
- The partnership is projected to deliver incremental EBIT contributions, reaching approximately $15 million annually post-FY26.
Cleanaway Waste Management Ltd (ASX:CWY) has partnered with LMS Energy Pty Ltd to launch a joint venture aimed at processing and commercialising landfill gas (LFG) from its Lucas Heights landfill in New South Wales. LMS Energy, a company specialising in bioenergy and methane abatement, will invest $46 million to develop advanced bio-electricity assets, including a 22MW generation facility. This initiative will replace existing electricity generation infrastructure previously managed by a third party.
Under the agreement, Cleanaway will have exclusive rights to the landfill gas at Lucas Heights for 20 years, with both parties holding equal ownership in the venture.
Mark Schubert, CEO and Managing Director of Cleanaway, highlighted the initiative as a key component of the company’s Blueprint 2030 strategy. He emphasised that optimising landfill gas utilisation aligns with the organisation’s operational excellence objectives.
Financial Projections and Strategic Goals
The joint venture is expected to contribute significantly to Cleanaway’s financial performance. Key projections include:
- Incremental EBIT of approximately $5 million in FY25.
- Approximately $10 million in incremental EBIT in FY26.
- Post-FY26, following full commissioning of assets and stable regulatory conditions, the partnership aims to generate incremental EBIT of approximately $15 million annually.
This collaboration also marks a critical step in achieving Cleanaway’s operational target of more than $50 million EBIT in FY26 from its Operational Excellence program.
Broader Implications
The partnership aligns with the growing emphasis on sustainable waste management and renewable energy initiatives. By leveraging bio-electricity assets and methane abatement technology, Cleanaway and LMS Energy are addressing both environmental and commercial goals.
The Lucas Heights project showcases the potential for monetising landfill gas while contributing to broader sustainability efforts. The move reflects a strategic pivot towards enhancing operational efficiency and environmental responsibility in waste management operations.
