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A structural pricing premium for blue ammonia?

OCI CEO Ahmed El-Hoshy outlines his expectation for a structural pricing premium for blue ammonia produced at the company’s facility under construction in Texas.

OCI expects to garner a pricing premium for the blue ammonia produced at its 1.1 MTPA Texas Blue Ammonia facility, which is scheduled to reach commercial operations in early 2025.

Netherlands-based OCI broke ground last year on the project, touted by the company as the first greenfield blue ammonia facility of this scale to come online in the US and globally.

Carbon pricing and ammonia production curtailments in Europe are anticipated to generate premium pricing for the facility’s output.

“The implementation of the Carbon Border Adjustment Mechanism (CBAM) in the European Union in 2026 is expected to create a differential for ammonia prices, where low-carbon ammonia has an inherent advantage relative to grey ammonia,” CEO Ahmed El-Hoshy said on a call today.

“Given the forward [European Union Allowance] pricing” – the name for Europe’s emissions allowances – “this adds approximately at least another $100 per ton of returns net of freight for our blue ammonia from Texas going into Europe.”

Addressing a question about how OCI expects to price its product at a premium while a prospective competitor on the Gulf Coast is offering to sell its ammonia to a Japanese buyer using a cost-plus pricing model, Ahmed El-Hoshy noted the competitor’s offtake arrangement was still at the MoU stage and the project had not reached a final investment decision.

He added: “What is the cost, and what is the plus?”

In addition to sending the ammonia into the US Midwest and Gulf Coast markets, OCI plans to export to the Middle East and Europe, where the market has experienced ammonia production curtailments, Ahmed El-Hoshy said.

“We have effectively over the last 18 months had a 600,000 ton short for ammonia, and we know just given where marginal costs are, we’re going to start seeing more permanent shutdowns,” he added, referring to curtailments by CF Industries in the UK and BASF’s production cuts in Germany.

“To the extent you go into the European market, with CBAM that’s moving in the right direction, Europe is going to be pricing carbon from 2026,” he added, “and carbon today is EUR 100 per ton in the forward curve, and every ton of ammonia is about two tons of carbon, so it’s about a EUR 200 carbon charge that will start being implemented.”

“Structurally there will be an advantage to having something that ‘s a blue product versus something that’s a grey product in the market, and that can allow for the premium that we’re discussing here.”

In today’s presentation, OCI included an entire slide about the many announced but failed ammonia projects since 2008, noting only 11 projects from 35 announcements were built on time.

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Sustainable glass container producer raises $230m

A sustainable glass container producer has raised capital from Orion Infrastructure Capital and other institutional investors for a new facility that would use green hydrogen.

Glass container manufacturer Arglass has secured over $230m in capital to build a second furnace on its campus in Valdosta, Georgia. Arglass raised a combination of structured equity and debt to finance the construction, according to a news release.

Projected to be completed in Q2 2025, the new facility is expected to be capable of producing over 350 million sustainable glass containers annually. This state-of-the-art manufacturing plant will embody the future of glass with a fully integrated production network, driven by AI-integrated real-time data monitoring, predictive modeling and fully automated closed-loop production and quality assurance systems. These advances will allow the new facility to produce up to eight different glass container types simultaneously for maximum flexibility, enabling smaller production runs, faster reaction to market demands, lower inventory levels and reduced investment in molds.

These cutting-edge capabilities are planned to be backed by some of the most extensive sustainability infrastructure of any glass manufacturing plant in the world. The plant is expected to be powered by a hybrid gas, electric and hydrogen oxy-fuel furnace capable of melting 490 metric tons of glass per day. An additional five megawatts of power will be provided by a solar power installation.

“Our new furnace will aim to further establish Arglass as the most innovative, flexible and sustainable glass manufacturer in North America,” said Arglass Chairman and CEO José de Diego Arozamena. “Glass is already the most sustainable, recyclable and healthy packaging material, and the only packaging material classified as ‘generally recognized as safe’ by the FDA. I am incredibly proud to be leading the industry to new heights in sustainability.”

Other sustainability measures include the use of green hydrogen to reduce CO2 emissions, a closed-loop water system to minimize industrial waste and an on-site post-consumer glass recycling plant. The recycling plant will provide post-consumer glass cullet for use in the production of new containers. Arglass also produces glass using its proprietary Arglass Biogenic® glass composition, which replaces traditionally mined material with a naturally renewing, carbon-negative biogenic component gently harvested from the ocean.

“In addition to the industry advancements this new facility will create, we also Intend to bring 150 new jobs to the Valdosta area,” said Tony Krznâr, Arglass vice president of operations. “I look forward to working with the community at large to keep integrating with the beautiful tapestry of Georgia.”

The construction, which is expected to begin as soon as possible, will be supported by the Valdosta Lowndes Development Authority and the Georgia Department of Economic Development. Arglass plans to hold a groundbreaking ceremony for the new plant on the company’s campus in Valdosta.

Investment bank Jefferies acted as financial advisor for Arglass. Orion Infrastructure Capital and several other major institutional investors provided funding.

“Our newly formed capital partnership will accelerate Arglass’s innovative growth and transformation of the glass industry in North America while also representing OIC’s continued investment conviction in sustainable domestic packaging infrastructure,” said Chris Leary, investment partner and head of infra equity at OIC.

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California DAC firm secures $80m funding and strategic partnerships

The company will use the capital to deliver commercial-ready hybrid direct air capture units by the end of 2025.

Avnos, Inc., the Los Angeles-based company developing Hybrid Direct Air Capture (HDAC™) technology for carbon dioxide removal, has signed multi-year strategic and investment partnerships, in excess of $80m in aggregate.

Investors include ConocoPhillips, JetBlue Ventures, the corporate venture capital division of JetBlue, and Shell Ventures LLC, the US corporate venture capital arm of Shell plc.

Avnos will use the capital to deliver commercial-ready HDAC units by the end of 2025, according to a news release.

Avnos’ proprietary HDAC technology is the only carbon dioxide removal (CDR) solution that captures both CO2 and water from the atmosphere in a single system. While many other forms of Direct Air Capture (DAC) consume several tons of water per ton of CO2 captured, Avnos produces five to ten tons of water for every ton of CO2 captured. This innovative HDAC approach employs the captured water to drive a novel moisture-responsive CO2 adsorbent material, which eliminates the need for heat, thus reducing the system’s energy consumption. As a result, the Avnos solution requires less than half the energy required by competitors.

“Avnos is laser focused on delivering the most cost-effective, flexible, and scalable commercial Direct Air Capture technology in the world,” said Will Kain, CEO of Avnos. “Adding blue-chip strategic partners such as ConocoPhillips, JetBlue Ventures, and Shell provides us with an incredible opportunity to access more resources, know-how, and global reach to meaningfully accelerate our deployment schedule. Ultimately, we will be able to remove more atmospheric carbon, faster, and at lower costs than we would have been able to on our own. This is a very exciting announcement at a very exciting time for our company.”

Global carbon dioxide emissions rose to their highest-ever level in 2021, with this trend expected to continue unless significant decarbonization plans are put in place. Nearly all climate and energy models indicate the need for carbon dioxide removal (CDR) technology to grow to billions of tons of annual capacity to make a significant impact on reducing emissions.

“ConocoPhillips is pleased to support Avnos as they develop a promising technology that captures carbon and produces water,” said Warwick King, vice president Low Carbon Technologies at ConocoPhillips. “Investing in this promising Hybrid Direct Air Capture technology aligns with our company’s commitment to finding innovative solutions that reduce carbon emissions crucial to enable an orderly energy transition.”

“JetBlue Ventures is thrilled to support Avnos and the development of their technology that not only captures CO2 at impressively low cost but also generates meaningful amounts of water in the process and could play an important role in e-fuels production. The caliber of the technology, team and partners around Avnos is top tier, and we’re glad to be on board,” said Jim Lockheed, investment principal at JetBlue Ventures.”

“We are pleased to invest in Avnos as they work to further solutions for carbon capture technology,” said Brian Panoff, president, Shell Ventures LLC. “Of particular interest is the potential of Avnos’ technology to reduce energy demand in capturing CO2 and its ability to produce water.”

Previously, Avnos has been awarded multi-million-dollar projects from the U.S. Department of Energy to demonstrate its HDAC solution in the field, and the U.S. Office of Naval Research to pilot CO2 capture and e-fuels production.

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Air Liquide and Siemens inaugurate Berlin electrolyzer factory

With one gigawatt currently, the companies expect a ramp-up to annual production capacity of three gigawatts by 2025.

Air Liquide and Siemens Energy officially inaugurated their joint venture gigawatt electrolyzer factory today in Berlin.

The mass production of electrolyzer components will allow the manufacturing of low-carbon hydrogen at industrial scale and competitive cost, and foster an innovative European ecosystem. The gigawatt factory will ramp-up to an annual production capacity of three gigawatts by 2025, according to a news release.

Located in Berlin, the new manufacturing site inaugurated today spans over 2,000 square meters. It leverages automation and robotics for the series production of Proton Exchange Membrane (PEM) electrolyzer modules, the main component of the electrolyzer. The PEM modules offer a high degree of efficiency and are particularly adapted to an intermittent renewable energy supply.

With one gigawatt currently, Air Liquide and Siemens Energy expect a ramp-up to annual production capacity of three gigawatts by 2025. Once produced, the assembly of the modules to be implemented in electrolyzer projects can be carried closer to the project sites, contributing further to the cost effectiveness of the solution.

The strategic partnership benefits from a portfolio of hydrogen projects combining both Air Liquide and Siemens Energy’s pipelines, targeting large industrial-scale projects worldwide in collaboration with customers.

In Europe, a number of low-carbon and renewable hydrogen projects are already under development. In Oberhausen, Germany, the Air Liquide’s Trailblazer 20 MW large-scale electrolyzer project is reaching completion and aims to accelerate the decarbonization of the Rhine-Ruhr industrial basin. Near Port-Jérôme, France, the Air Liquide Normand’Hy 200 MW electrolyzer project is the largest PEM electrolyzer under construction, avoiding the emission of 250,000 tonnes of CO2 per year. Both groups are working on several other large-scale electrolyzer projects, such as Siemens Energy’s ones in Kassø (Denmark) or FlagshipONE (Sweden), which will provide hydrogen for the synthesis of efuels for shipping.

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Biomass-to-hydrogen developer in talks for development capital, series A

A California developer that uses woody biomass to make green hydrogen is in discussions to raise capital for project development and a series A funding round.

Yosemite Clean Energy, a California-based biomass-to-hydrogen start-up, is in discussions with potential investors to raise development capital for projects and a series A round.

The company is currently seeking around $20m of development capital that would help advance woody biomass-to-hydrogen projects to FID, CEO Tom Hobby said in an interview.

Hobby said he is also in discussions with strategic capital partners about a series A funding round. The company is not using an advisor for the capital raise, Hobby said, but is working with the law firm Kilpatrick Townsend & Stockton.

The company has so far raised less than $2m at the corporate level from friends and family and an additional $5m – including grants – for projects, Hobby added. The development capital as well as the series A raise would be conducted at the project level.

Yosemite has signed a letter of intent and term sheet for offtake from its first project in Oroville, California, which will produce approximately 24,000 kg per day (2,760 MMBtu) of green hydrogen from woody biomass, and is set for FID later this year. Hobby declined to name the offtaker but described it as a “global trading house.”

Hobby, whose family has lived in the Sierra Nevada for generations, emphasizes the company’s role as a partner with local communities to help manage forest waste, which has served as fuel for explosive wildfires in recent years.

“It’s de-risking their communities from catastrophic wildfires,” he said.

Design incentives

Under the original design for the Oroville facility, the company had planned to produce 31,000 kg per day of RNG and 12,200 kg per day of green hydrogen. But due to incentives for green hydrogen in the Inflation Reduction Act, the company has pivoted to a hydrogen-only design, Hobby said.

The $3/kg incentive for green hydrogen in the IRA created “additional value for no real capital cost differential,” he said.

Yosemite’s second project is in Toulumne County, California and will follow a design substantially similar to the Oroville facility.

The company employs dual-bed gasification technology licensed from Austrian firm Repotec, while Primoris is doing detailed design and engineering.

The technology takes wood and creates a medium-strength BTU gas that can be used to make different products, Hobby said. “Once it’s in a gaseous form, we can use it for a lot of purposes: we can take it to make power, we can produce hydrogen, we can use the Fischer-Tropsch process to make second-generation biofuels like aviation fuel, and we have a patent that can do hydrogen and RNG.”

Project ownership

Meanwhile, Yosemite has hired a Texas-based firm to help raise capital for projects, which are estimated to cost $250m at the outset, but could decline once efficiencies are achieved, Hobby said.

The company’s project ownership model is unique in that it seeks to bring in local wood businesses – in logging, land clearing, and orchard removal – as providers of biomass and also equity investors in the projects.

“To have their investment and their wood at the same time is huge,” Hobby said.

In raising capital for the projects, in addition to equity and debt investors, Yosemite is evaluating a mix of sources in the tax-exempt bond market as well as lower-interest loans from within California and export finance solutions. The company recently received two $500,000 Forest Biomass to Carbon-Negative Biofuels grants from the California Department of Conservation.

Hobby would like to build 50 woody biomass plants in California, which would utilize approximately 5 million tons of the 35 million tons of waste woody biomass available annually in the state.

“Our goal is not to have to truck and ship wood more than 50 miles,” he said. “If you put circles around every place in California that’s a decent wood basket […] I think we could sign about 50 facilities across the state.”

The company is also planning to expand beyond California to other states with a low-carbon fuel standard, Hobby said.

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Exclusive: Liquid hydrogen at room temp: Tech firm raising money to scale

A provider of liquid organic hydrogen carrier technology is finishing a second seed round with designs on a Series A next year. The technology allows hydrogen to be transported as a liquid at room temperature.

Ayrton Energy, the Calgary-based provider of liquid organic hydrogen carrier storage technology, is preparing to launching a second seed round and plans a $30m Series A next year, CEO Natasha Kostenuk told ReSource.

Ayrton, with 10 employees, allows hydrogen to be transported as a liquid at room temperature, Kostenuk said. The liquid can also be transported in existing infrastructure while mitigating pipeline corrosion.

The company’s target customers are hydrogen producers, utilities and hub-and-spoke logistical servicers.

To date Ayrton has raised $5m from venture capital and a similar amount will come from the next seed round, Kostenuk said. A 30 kg per day pilot project with a gas utility in Canada is underway and Ayrton will look to 10x that next year, she said, with eyes on 3 metric tonnes per day commercialization.

“It scales like electrolyzers,” she said of the technology. “We can get very large, very easily.”

Ayrton is now engaging investors and potential advisors, Kostenuk said. “It would be good to engage with us now.”

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Renewable hydrogen developer in exclusivity with strategic investor

A renewable hydrogen developer based in the western US is reaching the final stages of a capital raise with an investor in exclusivity.

NovoHydrogen, the Colorado-based renewable hydrogen developer, is in exclusivity with clean energy investment platform Modern Energy, according to two sources familiar with the matter.

ReSource reported in February that GreenFront Energy Partners was advising the company on a Series A.

NovoHydrogen CEO Matt McMonagle said previously that the company has about 30 projects in development in the US, ranging from a few megawatts to hundreds of megawatts. Its most active markets are the West coast, Northeast, Appalachia, Texas and the Rocky Mountains, though the company is not geographically constrained.

The company aims to begin construction on its first projects by the end of this year, the executive had said.

NovoHydrogen declined to comment. GreenFront and Modern Energy did not respond to requests for comment.

Modern Energy, a certified B-Corporation, recently put $90m into net metered solar developer Industrial Sun along with partner EIG. In 2020 EIG committed USD 100m to Modern Energy through a debt facility to fund the development of clean energy assets.

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