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Aemetis capitalized for hydrogen and biofuel development plans

Aemetis CEO Eric McAfee said in an interview that the company has lined up financing to complete the $1.2bn in biogas and sustainable aviation fuel projects it has in development.

Aemetis is well capitalized to complete the $1.2bn in biogas and sustainable aviation fuel (SAF) projects it has in development, CEO Eric McAfee said in an interview.

Founded by McAfee in 2006 and listed on the NASDAQ in 2014, Aemetis plans to produce more than 60 million gallons per year of SAF and capture and sequester 125,000 mtpy of carbon in 2025. This is a diversification from existing ethanol, RNG and biodiesel operations in the US and India.

The company recently released an updated five-year plan including plans to generate $2bn of revenues, $496m of net income, and $682m of adjusted EBITDA by 2027.

McAfee, noting that Aemetis is well capitalized and has locked in financing for much of its plans, said, “The only thing we really need to do is just execute.”

For example, the company closed $25m of USDA loan guarantees in October at a 6.2% interest rate, McAfee said. The company has also signed a $125m USDA commitment letter for its Riverbank Biofuels Project in California, also called CarbonZero 1, which will produce SAF.

“We’ll be expanding that relationship with [the USDA],” McAfee said. “Everything else is financed.”

The Riverbank Biofuels Project has signed offtake agreements with major airlines, and the SAF segment is expected to be the biggest contributor to Aemetis’ revenues once the project is online in 2025, according to a presentation. Renewable diesel and SAF will add $348m of revenues in 2025 and $693.3m of revenues in 2026.

For its carbon sequestration projects, referring to upgrades at the existing Keyes ethanol plant in California and other operational assets, the company has an existing $100m line of credit provided by Third Eye Capital, $50m of which remains unused, McAfee said.

Projected revenues will allow the company to self-fund without new credit facilities, McAfee said. Revenues from Aemetis’ debt-free operations in India will also be available to fund new developments.

The Riverbank SAF plant will be fully engineered and permitted this year, McAfee said. Baker Hughes and ATSI are the company’s EPC partners on the new developments.

Aemetis has no plans to divest existing operational assets but could acquire California biogas assets, McAfee said. The company regularly talks to investment bankers.

McAfee is the largest single shareholder in Aemetis. JackBlock, the former US Secretary of Agriculture, sits on the company’s board. The largest institutional shareholder is BlackRock.

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Hydrogen Council, McKinsey 2023 hydrogen report summarized

The hydrogen industry faces challenges due to high costs and regulatory uncertainty despite significant advances this year, according to the report.

The global hydrogen economy is witnessing significant growth, with more than 1400 projects announced, marking an increase from about 1040 last year, according to the 2023 Hydrogen Insights report from The Hydrogen Council and McKinsey. 

These projects, amounting to a total investment of  $570bn, aim to supply 45 million tons per annum of clean hydrogen by 2030. Europe leads in project numbers (540), followed by North America (248), with a quarter of these projects already past the final investment decision (FID) stage. 

Notably, investments are maturing, with $110bn allocated for front-end engineering and design (FEED) and beyond, a 60% growth in such investments. Electrolysis deployment has also surged, surpassing 1 GW, with approximately 12 GW capacity having passed FID​​.

However, the clean hydrogen industry faces challenges, particularly in the cost of producing renewable hydrogen. The estimated levelized cost of producing renewable hydrogen (LCOH) is currently about $4.5 to $6.5 per kilogram, an increase of 30% to 65% due to factors like higher labor and material costs. Despite this, costs are expected to decline to $2.5 to $4.0 per kg by 2030, driven by advancements in electrolyzer technology, manufacturing economies of scale, and reductions in renewable power cost​​.

The regulatory landscape is evolving but uncertainties persist, the report notes, including the requirements for receiving production tax credits under the US Inflation Reduction Act and the implementation of the Renewable Energy Directive in EU member states​​.

Investment growth is evident across most regions. Europe not only has the most projects but also the highest total investments announced ($193bn). Latin America, despite fewer projects than North America, has announced the second-largest volume of investments ($85bn), attributed to larger project sizes and a higher share of giga-scale renewable hydrogen projects. North America’s announcements grew by about 20%, reflecting continued momentum following policy developments. India, the Middle East, and China also showed significant growth in investments​​.

In terms of electrolysis capacity, over 305 GW has been announced through 2030, with China leading in capacity past FID, accounting for about 55% of the 12 GW total. The European investment pipeline has 40 GW (about 45%) at least in the planning stage, and Latin America contributes 20% of all announced volumes through 2030. However, less than 5% of renewable hydrogen supply investments are currently committed, indicating a need for significant acceleration in project development and scaling up of supply chains and manufacturing capacity​​.

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Former thyssenkrupp nucera CEO to lead Canadian electrolyzer startup

Canadian electrolyzer startup Hydrogen Optimized has hired Denis Krupe as CEO.

Hydrogen Optimized Inc., a subsidiary of Key DH Technologies Inc. (KEY), today announced that Denis Krude, former CEO of green hydrogen technology company thyssenkrupp nucera, will be appointed President and CEO starting April 8, 2024.

Company Co-Founder Andrew Stuart will continue to play an active leadership role at Hydrogen Optimized as Executive Chair, according to a news release.

Krude joined the thyssenkrupp Group, one of Germany’s largest industrial companies, in 1998. At thyssenkrupp Uhde, a chemical plant manufacturer, he held a series of progressively senior management positions. From 2016 to 2023, he served as CEO and a Member of the Executive Board at thyssenkrupp nucera, a leading technology and plant engineering company specializing in water electrolysis and green hydrogen. Among his accomplishments there, in 2021-2022 Krude and his team prepared the company for an IPO, leading investor meetings and other activities that set the stage for its successful 2023 public listing.

“The unique focus of Hydrogen Optimized on large-scale water electrolysis solutions for major, hard-to-abate industries aligns with my view that this market segment offers the most significant opportunity in clean hydrogen,” Denis Krude said. “With a strong foundation built on the Stuart family’s 120-year legacy in high-power water electrolysis, I see enormous opportunity for Hydrogen Optimized to become a world leader in clean hydrogen.”

The company’s patented RuggedCell™ system enables clean hydrogen plants up to gigawatt scale. The RuggedCell™ is a precious metal-free, high power alkaline water electrolyzer with a 0-100% dynamic range. Through a strategic relationship with ABB, an investor in KEY, Hydrogen Optimized has strengthened the RuggedCell™ offering through access to ABB’s world-leading power and automation technologies.

Krude, a 54-year-old German national, was born in Spain.

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Electrolyzer company to go public in SPAC deal

Spain-based H2B2 Electrolysis Technologies is set to go public via a business combination with RMG Acquisition Corporation III, a publicly-traded special purpose acquisition company with shares trading on NASDAQ.

Spain-based H2B2 Electrolysis Technologies, a developer and operator of green hydrogen production systems for clean energy generation, and RMG Acquisition Corporation III, a publicly-traded special purpose acquisition company, announced today that they have entered into a letter of intent for a potential business combination.

Under the terms of the LOI, H2B2’s shareholders would continue holding substantially all of their equity in the combined public company. RMG III and H2B2 expect to announce additional details regarding the business combination when a definitive agreement is executed, which is expected before the end of the first quarter 2023.

Since its founding in 2016, H2B2 has become a key player in the green hydrogen energy sector. The company is expanding rapidly in Europe, the United States, Latin America, Asia and the Middle East and has secured a role in strategic projects. In particular, H2B2 has been selected as a participant in the IPCEI Hy2Tech (Important Projects of Common European Interest) program, through which it has been approved by the European Commission to receive up to €25m in public grants out of the €5.4bn that will be invested.

In 2019, the California Energy Commission awarded H2B2 a grant for the development of a green hydrogen production facility, Sohycal plant, in Fresno, California. This 3MW plant is scheduled to begin production in Q1 2023 and will become the first green hydrogen plant, powered by H2B2, vertically integrated from the photovoltaic production of electricity to the transportation and dispensing of green hydrogen at the charging station.

In 2021 Colombia’s Ecopetrol, one of the world’s leading oil companies, began working with H2B2 and recently incorporated the Company into its group of strategic partners as part of its plan to decarbonize and develop green hydrogen energy. H2B2 has also recently entered the Indian market through a joint venture with GR Promoter Group and the creation of GreenH.in Electrolysis.

The company has reinforced its commitment to good corporate governance by increasing the number of independent directors on its board, including newly appointed chairman Antonio Vázquez, who has four decades of experience in international business development. Vázquez most recently was chairman of IAG, the holding company for Iberia, British Airways, Vueling and Aer Lingus, and president of Iberia. The company also recently appointed as CEO Anselmo Andrade Fernández de Mesa, who has been part of the management team since the Company was founded in 2016, including as its CFO until 2021 and head of the business development division for the last two years.

As part of the company’s transition to public ownership, Andrade takes the reins from Felipe Benjumea Llorente, founder of H2B2, who will assume the role of strategic advisor so that he can continue to contribute to the development of the business globally.

“The steps we are taking to finalize our business combination with RMG III will represent a new era for our company and a great step forward in accelerating the decarbonization of the energy sector globally,” said Vázquez.

Anselmo Andrade added: “The company will continue to distinguish itself by bringing together a team with decades of experience in the hydrogen energy sector and deploying its proprietary technology as it continues its expansion.”

RMG III’s Jim Carpenter said “RMG III is excited to be partnering with a company that we believe has the potential to become a global green hydrogen leader.”

RMG III’s securities are listed on NASDAQ, with $483m cash in trust raised through its IPO.

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CO2-to-SAF firm in $100m capital raise

A New York-based CO2-to-SAF firm is raising about $100m in equity and debt.

Dimensional Energy, the CO2-to-SAF startup based in Ithaca, New York, is in the late stages of a roughly $100m equity and debt round led internally, according to a source familiar with the matter.

The company is down to a shortlist of potential investors with two or three weeks until targeted close, the source said.

Dimensional did not respond to a request for comment.

Proprietary reactor technology powered by renewables is the core of Dimension’s regenerative process. According to its website, the company can make 15 barrels of fuel from every 10 tons of carbon sources form the atmosphere and hydrogen derived form electrolysis.

In May, the company signed an offtake agreement for 5 million gallons per year with Boom Supersonic, which is seeking to build a supersonic airliner that will travel at speeds twice as fast as today’s commercial jets.

Dimensional started production at a pilot-scale COutilization plant in Tucson, Arizona last year.

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AIMCo-backed midstream infrastructure firm in refi

The company, whose asset footprint includes Gulf Coast hydrogen production, today priced a debt refinancing transaction with an 8.875% coupon.

Howard Energy Partners today priced $550m of senior unsecured notes to refinance amounts outstanding on its revolving credit facility.

The company, which is majority owned by the Alberta Investment Management Corporation (AIMCo), will pay 8.875% on the notes, inside of price talk of between 8.75% – 9%, according to sources familiar with the matter.

RBC Capital Markets and TD Securities are joint active bookrunners on the deal, the sources said.

Howard in 2021 closed on the acquisition of the Javelina Facility in Corpus Christi, Texas — a treating and fractionation plant that extracts olefins, hydrogen, and natural gas liquids from the gas streams produced by local refineries.

Starting in Jan of 2023, a strategic technology partner began producing a low-carbon diesel substitute using Javelina’s hydrogen and CO2 as feedstocks, making it one of the first merchant “clean” hydrogen facilities on the US Gulf Coast, according to the company. HEP is also pursuing carbon capture and sequestration opportunities with its Javelina assets through a joint venture with TALOS Energy and the Port of Corpus Christi.

AIMCo acquired an initial 28% stake in HEP in 2017, and brought its ownership stake to 87% last year following the purchase of Astatine Investment Partners’ stake in the company.

Howard operates in two key segments in the US and Mexico: natural gas and liquids. The natural gas segment includes 1,175 miles of pipelines and approximately 4.3 Bcf/d of throughput capacity and 600 MMCf/d of cryogenic processing capacity.

The liquids segment includes terminalling and logistics services for refined products as well as refinery-focused off-gas handling, treating, processing, fractionation and hydrogen supply services.

Spokespersons for the company, RBC, and TD did not respond to emails seeking comment.

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US gas compression firm raising $432m

A Houston-based CNG company is raising money to develop a virtual marine pipeline between the US Gulf Coast and the Caribbean.

Andalusian Energy, a natural gas compression, export and transportation company, is undergoing a $432m capital raise to develop and build a compression and filling station in Plaquemines Parish, Louisiana and export line to Honduras, according to two sources familiar with the matter.

Whitehall & Co. is advising on the transaction, the sources said. Capital allocation will also support the purchase of CNG containers and destination port improvements in Puerto Cortes, Honduras.

Targeted initial equity is $168m, or 40%, according to a teaser seen by The Hydrogen Source. Targeted COD of the project is 2H25.

Gross-cumulative investment could exceed $2bn. The phase I estimated project cost of approximately $421m is expected to be split 40% to permanent equity capital ($168m) and 60% to structured debt ($253m).

Andalusian uses lightweight composite cylinders to ship compressed natural gas (CNG) at ambient temperature to the Caribbean, Central America and eastern Mexico. Marketing materials state the process is lower cost than shipping liquefied natural gas (LNG).

The company has installed a demonstration facility in Choloma, Honduras to import natural gas from CNG.

The Louisiana compression facility will be constructed with two adjacent docks and a site with utility connections. Natural gas will be supplied using a combination of regional pipeline networks including Southern Natural Gas pipeline and High Point Gas Transmission Pipeline. An agreement has been reached to provide interconnection and construction of a 1.5 mile lateral.

Andalusian completed its development capital raise with a strategic investment by MAN Energy Solutions USA, a division of Volkswagen AG, and equity investments by HBG, Progressive Energy and Grupo IDC.

Additional marine engineering, consulting, and ship classification services are being provided by DNV GL and confirmed by the Norwegian Maritime Authority.

Additionally, to monetize spare ship capacity and based on a contract to deliver CNG to an IPP in Honduras, Andalusian has reached an agreement with a global shipping company to transport commercial container cargo between Louisiana and Honduras, the teaser states.

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