Wisconsin biogas firm files for bankruptcy amid mounting losses

A renewable energy company in Brown County, Wisconsin, US, has sought bankruptcy protection after struggling with years of financial and operational setbacks.

NLC Energy Denmark LLC, which operates a biogas facility in the village of Denmark, filed for Chapter 11 protection on 16 August in the US Bankruptcy Court for the Eastern District of Wisconsin. The company is attempting to restructure around $76 million (€70 million) in secured debt.

Court filings show the firm has faced losses of roughly $1 million (€920,000) per month. NLC, which employs about 30 people, continues to process food waste and manure into renewable natural gas at its Denmark plant, which remains operational.

The business was founded in 2008 under the name NEW Organic Digestion LLC, originally running a food waste digester that generated biomethane for electricity production. In 2016, the operation expanded through a joint venture that included acquiring a second site in South Sioux City, Nebraska.

Difficulties soon followed. Shortly after the expansion, local sewer backups led to legal disputes and fines totalling $1.8 million (€1.65 million). A separate incident in 2019, when a supplier altered feedstock without notice, caused a prolonged shutdown of the Nebraska facility.

Financial pressure intensified in later years. A 20-year contract signed with the University of California in 2016 to purchase methane was undermined by underperformance in gas production and delays to expansion work.

By 2020, the company had fallen behind on debt repayments. An attempt in 2022 to renegotiate gas prices with the university failed, forcing the firm to continue operating at a loss.

The largest secured creditors include the University of California, which claims $8.6 million (€7.9 million), along with other financial institutions listed in the bankruptcy records.

Wisconsin is home to more than 300 methane digesters, with around 50 located on dairy farms, according to the state’s Public Service Commission. Most facilities inject biomethane into interstate pipelines, with significant value tied to California’s Low Carbon Fuel Standard, which rewards projects that reduce greenhouse gas emissions.