Delorean Corporation (ASX:DEL) has entered into a collaboration agreement with Brickworks Building Projects, which will see the two companies undertake a feasibility study to develop, build, and operate bioenergy facilities to convert organic waste to green gas and electricity.

The converted electricity will then be used in Brickworks Building Products beginning with its NSW brick manufacturing sites.

Following the Master Services Agreement (MSA), Delorean will undertake services to assist the parties to determine the viability of constructing and operating these bioenergy plants.

Shares have been up to a high of 23c in intra-day trading, sitting at 20.5c at the time of writing.

Setting out to establish a 50/50 joint venture

Subject to the outcome of the feasibility study, DA approval and the parties determining to proceed with the project, Delorean and Brickworks intend to establish a 50/50 joint venture (or other commercial arrangement) to construct and operate the bioenergy plants.

If successful, Brickworks and Delorean will consider a national rollout to other Brickworks operations across Australia.

Brickworks managing director Lindsay Partridge said Brickworks was looking forward to working alongside Delorean to adapt their anaerobic digestion technology.

“This gas can be used to fire our kilns in exactly the same way as natural gas, thus maintaining the high quality of our bricks, that we guarantee for 100 years.”

The two companies have agreed to a staged approach for the project, kicking off with further due diligence and the feasibility study.

Once complete, and if the project is considered viable, and the parties determine to proceed then the parties will negotiate the terms of various agreements including for the funding, construction, and operating phase of the anaerobic digestion plants.

Tapping into organic waste currently going to landfill

DEL managing director Joe Oliver said this collaboration with Brickworks highlights the emerging green gas market, led by Brickworks and the large manufacturing gas consumers.

“Delorean is well positioned to deliver green gas from an untapped organic waste stream currently going to landfill,” he said.

“This is a great milestone for the industry.”

Back in September the company announced a collaboration agreement with Australian Gas Networks to establish a mutually acceptable business model to construct, own, and operate anaerobic digestion plants to supply biomethane into AGIG gas networks.

Delorean and AGIG have already collaborated on its DESAO project to facilitate the connection of biomethane into the gas network, and as an underlying customer for the biomethane.

This is expected to be the first organic waste to biomethane facility in Australia, located in Adelaide, South Australia.