Varo Energy, a Switzerland-based oil refiner, has announced plans to buy Renewable Energy Services (RES), a biogas supplier and trader.

The financial terms of the transaction were not disclosed.

Through the acquisition, Varo expects to add 1 terra watt hour (TWh) of biogas trading capacity and bolster its position in Europe by integrating feedstock aggregation and manufacturing.

RES, which is said to operate in ten European nations, sources its biogas from both national and international producers.

Biogas, which is produced from organic matter, has been touted as a replacement for natural gas and is said to have lower carbon emission.

Backed by Vitol and Carlyle, Varo expects the European demand for biogas to increase three-fold by 2030.

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Varo Energy CEO Dev Sanyal said: “We believe biogas is a key ingredient in the future European energy mix. The addition of RES to VARO’s diversified portfolio further enhances our sourcing and optimisation capabilities in biogas – one of the five strategic growth pillars that VARO has identified as offering the most attractive low carbon growth potential while playing to our strengths.”

Earlier this year, Varo acquired an 80% stake in Bio Energy Coevorden (BEC) to develop the “largest” biogas manufacturing facility in Northern Europe.

RES managing director Freek Smelt said: “This acquisition marks a significant milestone for RES and reinforces our commitment to expanding the production and consumption of biogas across Europe.

“Together with VARO, we will leverage our trading capabilities and expertise to deliver renewable certified biogas and support customers in achieving their net-zero targets.”

Subject to approval from relevant authorities, the transaction is expected to complete in the third quarter of this year.