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Aemetis sells first LCFS credits

Aemetis, Inc.has recognized revenues from its first sale of California Low Carbon Fuel Standard (LCFS) credits generated by its subsidiary, Aemetis Biogas LLC.

The environmental credits were sold in a single transaction to a market maker and the sale price has been paid in full, according to a news release. Aemetis Biogas produces renewable natural gas (RNG) from dairy manure digesters located in California’s Central Valley.

The sale was completed for LCFS credits issued by the California Air Resources Board (CARB) using the negative 150 Carbon Intensity Temporary Pathway. For each dairy, Aemetis has completed testing and verification as well as submitted applications for Provisional Pathways to CARB at lower carbon intensity scores based on actual data from biogas production and dairy operations. The Provisional Pathway scores are expected to increase LCFS revenues by more than 80% for future LCFS credit sales after the Provisional Pathways are approved, compared to the number of LCFS credits issued under the Temporary Pathway. Producers utilize the Temporary Pathway while CARB is processing their pathway applications.

The LCFS program is a mechanism for companies that are obligated to comply with mandates to reduce carbon emissions in California by purchasing credits from biofuels producers. The program requires oil companies and other fuel blenders to provide LCFS credits for gallons of gasoline, diesel, and other petroleum products sold in California.

On March 21, 2024, CARB will hold a public hearing to review expanded LCFS credit mandates for a twenty-year period through year 2045. The staff recommendation setting forth the higher mandates stated an intention to provide stable policy and strong LCFS credit prices to attract long term funding to build production facilities for lower-emission, renewable fuels to replace petroleum fuels in California. Lower emission renewable fuels include renewable natural gas (RNG) from dairy methane that can replace diesel in trucks and buses, produce renewable electricity for electric vehicles, and produce hydrogen for forklifts, cars and trucks.

Aemetis Biogas has agreements with 37 dairies, operates digesters serving eight dairies, operates a central biogas-to-RNG production facility with utility gas pipeline interconnection, and has completed 36 miles of biogas pipeline with a total of 60 miles already permitted under CEQA.

“Aemetis Biogas is actively growing by constructing additional digesters with a goal of 18 operating dairy digesters by the end of this year,” stated Eric McAfee, Chairman and CEO of Aemetis. “The cash proceeds received by Aemetis Biogas from the sale of LCFS credits is a meaningful milestone that contributes to our further investments in capturing biomethane at dairies to improve local air quality, reduce the global warming effects of methane emissions, and replace fossil diesel fuel in trucks in California.”

In October 2022 and July 2023, Aemetis Biogas closed on a total of $50 million of construction and 20-year debt financing for dairy digester construction utilizing USDA Renewable Energy for America Program (REAP) loan guarantee commitments. An additional $100 million of 20-year, USDA-guaranteed, REAP loan financings are in process, with planned closings during 2024.

Aemetis is also building its own RNG fueling station at the company’s Keyes, California ethanol plant to fuel trucks with locally produced renewable natural gas that provides a 90% reduction in emissions compared to petroleum diesel fuel.

Approximately 25% of methane emissions in California are emitted from dairy waste lagoons. When fully built, Aemetis Biogas plans to capture methane from the waste produced by more than 150,000 cows at dairy farms in California and produce 1,600,000 MMBtu of renewable natural gas from captured dairy methane each year. The project is designed to reduce greenhouse gas emissions equivalent to an estimated 6.8 million metric tons of carbon dioxide over ten years, equal to removing the emissions from approximately 150,000 cars per year.

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Chemours nets approvals for fuel cell membrane manufacturing

A Chemours JV will supply fuel cell and humidifier membranes globally, enabling downstream customers to accelerate conversion to green, hydrogen-powered heavy-duty transportation.

The Chemours Company has obtained the required approvals from the European Commission and the People’s Republic of China State Administration for Market Regulations to launch operations at its joint venture with BWT FUMATECH Mobility GmbH, under the name of THE Mobility F.C. Membranes Company GmbH – A BWT Chemours Company.

FUMATECH BWT GmbH is an established player in multiple hydrogen markets focused on membrane manufacturing in the field of fuel cell technology.

The 50-50 joint venture focuses on integrating the unique capabilities, resources, and technological expertise of each company to elevate and accelerate the capacity to manufacture fuel cell and humidifier membranes for mobility applications for long-term customers. By leveraging the best of each partner’s complementary assets, THE Mobility F.C. Membranes Company GmbH – A BWT Chemours Company will expedite the supply of HDFC membranes to original equipment manufacturers (OEMs), helping to meet the demand for these membranes that are critical to fully scaling the global hydrogen economy.

“Our Nafion ion exchange membranes are playing a critical role in driving the hydrogen economy and helping to create a more sustainable future, ” said Gerardo Familiar, president of Advanced Performance Materials at Chemours. “The technologies and solutions powered by our chemistry enable modern life and support economies across the world. Our joint venture with FUMATECH BWT GmbH and the BWT Group will enable solutions to support the future of clean energy and the transition to

THE Mobility F.C. Membranes Company will supply fuel cell and humidifier membranes globally, enabling downstream customers to accelerate conversion to green, hydrogen-powered heavy-duty transportation, driving green goals and sustainable policy frameworks in the E.U., the U.S. and elsewhere. With regulatory approvals in place the joint venture can now officially begin operation producing fuel cells and humidifier membranes for the mobility market.

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Biomass-to-hydrogen developer to receive California grant

The first grant, of $500,000, will support Yosemite Clean Energy’s flagship project in Oroville, CA, and will help bring Yosemite to a final investment decision.

Yosemite Clean Energy was selected to receive two $500,000 Forest Biomass to Carbon-Negative Biofuels grants from the California Department of Conservation (DOC), according to a recent news release.

The first grant will support Yosemite’s flagship project in Oroville, CA, and will help bring Yosemite to a final investment decision; the plant will produce 24 tons of renewable hydrogen per day. The second grant will support preliminary engineering for Yosemite’s Tuolumne County hydrogen project.

The DOC grant program is a vote of confidence for forest biomass to biofuels projects in the state and will increase the pace and scale of biofuels development.

The projects funded under the program will support sustainable forest stewardship within California that will help reduce the risk of wildfires and provide zero emission, carbon-negative fuels for the transportation industry.

Yosemite’s applications were scored #1 and #2 out of the 8 projects selected to receive funding, the release says.

This grant is the first round in a two-phase grant program, with the second phase giving 2 to 4 awards of between $10m and $20m to construct projects. As stated on the Program website, the DOC received a $50m budget allocation in FY21-22 focused specifically on creating carbon-negative hydrogen and/or liquid fuel from forest biomass within the Sierra Nevada. The DOC has worked closely with both the California Air Resources Board (CARB) the California Energy Commission (CEC), and the Natural Resources Agency, CalFire, IBank, the Governor’s Office of Planning and Research, and the Sierra Nevada Conservancy to develop the grant program.

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European Union gives 213m to Faurecia for clean mobility

Faurecia will develop lightweight carbon fiber gaseous hydrogen tanks as well as a tank to store hydrogen in cryogenic form.

Faurecia, a subsidiary of the French FORVIA Group, will receive EUR 213m from to develop lightweight carbon fiber gaseous hydrogen tanks as well as a tank to store hydrogen in cryogenic form, according to a news release.

The money is dedicated to Faurecia’s Historhy Next project. Faurecia’s plant in Allenjoie will produce over 100.000 tanks per year, start of production will be in 2024.

In addition, fuel cell supplier Symbio, a joint venture between Faurecia and Michelin, is also among the 10 projects supported by the French government in IPCEI (Important Project of Common European Interest), which has dedicated EUR 2.1bn to support the hydrogen industry in France.

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Exclusive: American Clean Power to advocate for ‘grandfathering’ in 45V rules

The clean energy trade group plans to continue promoting the concept of “grandfathering” for early-mover green hydrogen projects in response to IRS guidance for 45V rules, according to industry sources familiar with the plans.

Clean energy industry trade group American Clean Power (ACP) plans to continue championing the concept of “grandfathering” in the green hydrogen sector, arguing that it is critical for the economic viability of early green hydrogen projects under the Inflation Reduction Act’s clean hydrogen tax credits, according to sources familiar with the group’s plans.

Grandfathering would allow these projects to adhere to less stringent annual time-matching requirements before transitioning to an hourly regime.

ACP, through its previously released Green Hydrogen Framework, has proposed to grandfather in the early-mover projects under annual time-matching as long as they start construction before January 1, 2029. That’s in contrast to guidance for the 45V clean hydrogen tax credit that would require renewable energy generation associated with green hydrogen projects to be matched hourly beginning in 2028.

The trade group, which consists of 800 clean energy companies, previously argued against too-soon hourly matching in a November white paper. Representatives of ACP did not immediately respond to requests for comment.

In response to the IRS guidance, ACP is seeking to underscore that, without grandfathering, early projects will have to be designed from the start to meet hourly matching requirements, significantly increasing costs and negating the benefits of annual time matching, sources said.

The notice of public rulemaking on 45V was issued on December 26, and is open for public comment for 60 days. The tax credit rules, which would require strict adherence to the so-called three pillars approach for incrementality, temporal matching, and deliverability, are viewed by some in the industry as overly burdensome.

ACP’s position is that the project finance market can handle some changes midstream in long-term agreements, but not fundamental shifts like transitioning from annual to hourly time matching. 

This switch could lead to a dramatic decrease in green hydrogen production and a concurrent exponential increase in production costs. Investors, anticipating these risks, might finance green hydrogen production agreements as if they were under an hourly regime from the beginning, thereby eliminating the initial benefits of annual time matching, according to the sources familiar.

A Wood Mackenzie study estimates that hourly time matching requirements could result in a price increase of 68% in Texas and 175% in Arizona, for example.

ACP, according to sources, stresses that the absence of grandfathering would create an economic cliff for agreements straddling both accounting systems. This would add to project costs, potentially discourage customer interest in green hydrogen, and hinder the industry’s maturation, the sources explained. In contrast, grandfathering first-mover projects under an annual time matching regime would ensure competitive production costs, driving demand for green hydrogen, the trade group believes.

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Exclusive: Ammonia plant sale paused until commercial operations

The sale process for a Texas ammonia plant has been paused until the facility reaches commercial operations.

Gulf Coast Ammonia, the developer of a world-scale ammonia plant in Texas City, Texas, has paused a sale process until the plant reaches commercial operations, according to two sources familiar with the matter.

The process to sell the plant, which will produce 1.3 million tons of ammonia per year, was underway earlier this year, led by Jefferies as sellside advisor. The plant was expected to reach COD in 2023, according to documentation.

The project was initiated by Agrifos Partners LLC and advanced to FID in collaboration with joint venture development partners Mabanaft and Macquarie Capital. Following the FID taken in late 2019, GCA is wholly owned by a joint venture of Mabanaft and Lotus Infrastructure (formerly known as Starwood Energy).

GCA is investing $600m towards the construction, operation, and ownership of the ammonia plant, which is situated on land owned by Eastman Chemical Company within Texas City’s industrial park. It includes a portion of Eastman’s port access. 

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Officials at Lotus, Mabanaft, and Jefferies did not reply to inquiries seeking comment.

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Exclusive: Biomethane firm planning funding round

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Electrochaea, the US- and Europe-based biomethane developer, will go to market in 1Q24 for a new round of equity funding, with a near term need for project debt as well, two executives told ReSource.

The company, which was spun out from an incubator at The University of Chicago with offices in Denmark, has projects in Denmark, Colorado, New York and Switzerland. It is backed by Baker Hughes and, from early fundraising efforts, Munich Venture Partners, senior director Aafko Scheringa said. The former investor participated in its most recent (fourth) $40m funding round.

Electrochaea uses a patented biocatalyst that converts green hydrogen and carbon dioxide into BioCat Methane, a pipeline-grade renewable gas.

The average size of a project is roughly $25m, Scheringa said.

Funds from the next round will provide three years of working capital, CEO Mitch Hein added.

Electrochaea has not worked with a financial advisor to date, Hein said, adding that he may have need for one for new processes but has not engaged with anyone.

Scheringa said he is working to achieve commercialization on a pipeline of projects, with a 10 MWe bio-methanation plant in Denmark being farthest along with a mandatory start date before 2026.

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