By Natalie Grover
LONDON (Reuters) - Drugmaker AstraZeneca (NASDAQ:AZN) is switching to biogas produced from cow manure and food waste in the United States, it said on Tuesday, in a deal to cut its carbon emissions there.
The Anglo-Swedish drugmaker said the long-term agreement with Massachusetts-based Vanguard Renewables would enable it to transition to biogas from natural gas and cut its emissions across its U.S. research and manufacturing sites.
"Doing the right thing costs a little bit more, but it is not punitive," said Pascal Soriot, chief executive of AstraZeneca, which makes 26 medicines in the U.S.
Given the easy availability of natural gas in the U.S., the price of biogas is relatively much higher, Soriot said, as well as being less competitive than it is in Europe.
Manure from three farms, which each have about 900 cattle, will be combined with food waste and placed in an area the size of a big ice skating rink with apparatus above to capture methane, which will purified and piped into AstraZeneca's gas grid, said Andy Wirths, its SVP of supply for the Americas.
The heating and cooling processes used in the making of pharmaceutical ingredients can be energy intensive and by the end of 2026, AstraZeneca said, the deal will produce as much as 650,000 million British thermal units per year, equivalent to the energy needed to heat more than 17,800 U.S. homes annually.
An analysis published in November found the carbon output of THE global pharmaceutical and biotech industry eclipsed emissions from the forestry and paper sector.
AstraZeneca aims to reduce greenhouse gas emissions it directly produces by 98% by 2026, from a 2015 baseline.
However, much of the global pharmaceutical and biotech industry has yet to set targets for reducing carbon emissions in line with the Paris Agreement, researchers have found.