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Biden administration unveils national strategy for zero-emission freight

Earlier this week the Biden administration unveiled its strategy for the deployment of zero-emission medium- and heavy-duty vehicle (ZE-MHDV) charging and hydrogen fueling infrastructure from 2024 to 2040.

The Biden-Harris Administration has released the National Zero-Emission Freight Corridor Strategy. Developed by the Joint Office of Energy and Transportation and U.S. Department of Energy (DOE), in collaboration with the Department of Transportation (DOT) and the Environmental Protection Agency (EPA), the Strategy will guide the deployment of zero-emission medium- and heavy-duty vehicle (ZE-MHDV) charging and hydrogen fueling infrastructure from 2024 to 2040.

The strategy is designed to meet growing market demands by targeting public investment to amplify private sector momentum, focus utility and regulatory energy planning, align industry activity, and improve air quality in local communities heavily impacted by diesel emissions, according to a news release.

“For over a century, petroleum-fueled freight has transported vital food and resources to American families but at the same time, these vehicles have also contributed to lower public health, especially in densely populated communities,” said U.S. Secretary of Energy Jennifer M. Granholm. “The Biden-Harris Administration is addressing this issue head-on with innovative strategies to transform freight so it not only supports American families and businesses, but also protects the environment for future generations.”

“This is a big move to deliver environmental justice – 75% of heavy truck traffic travels on just 4% of our nation’s roads, jeopardizing the health of our most vulnerable communities,” said President Biden’s National Climate Advisor Ali Zaidi.

Providing ubiquitous and convenient access to electric vehicle (EV) charging and hydrogen refueling along our nation’s freight corridors and at intermodal freight facilities and high-usage ports is key to achieving U.S. goals to promote at least 30 percent ZE-MHDV sales by 2030 and 100 percent sales by 2040. The goal of the Strategy is to align public policy and investments by prioritizing, sequencing, and accelerating infrastructure along the National Highway Freight Network (NHFN) in four phases. A core objective of the Strategy is to meet freight truck and technology markets where they are today, determine where they are likely to develop next, and set an ambitious pathway that mobilizes actions to achieve decarbonization.

Map of National Zero-Emission Freight Corridor Strategy, Phase 1: Establish Hubs (2024-2027)

In alignment with the Joint Office’s National Zero-Emission Freight Corridor Strategy, the Federal Highway Administration is announcing the designation of National EV Freight Corridors along the National Highway Freight Network and other key roadways. The designations, which are required by the Bipartisan Infrastructure Law (BIL), are a critical part of the Biden-Harris Administration’s strategy for building out a convenient, reliable, and made-in-America national EV charging network that supports individual drivers and commercial needs.

Battery electric and hydrogen fuel cell vehicle technology along with other zero-emission forms of freight transport have considerable potential to save Americans money on consumer goods thanks to reduced fueling and maintenance costs associated with transport, all while delivering significant health benefits for historically disadvantaged populations that suffer the worst impacts of pollution from freight emissions and helping achieve national climate goals.

“The Federal Highway Administration is pleased to announce these new freight EV corridor designations along our national highways,” said Federal Highway Administrator Shailen Bhatt. “Medium- and heavy-duty trucks in our current freight network contribute approximately 23% of greenhouse gas emissions in the U.S. transportation sector. These new designations and Strategy will help to grow our national EV charging network, encourage clean commerce within the freight community, and support President Biden’s goals of achieving net-zero emissions for the nation by 2050.”

Map of the United States showing major highways that have been designated as Freight EV Corridors. Most of the highways are part of the National Highway Freight Network, which was the preliminary designation.

Under President Biden’s leadership, the number of publicly available EV chargers nationwide has increased by more than 80% to more than 173,000, and at least 40 U.S.-based facilities to produce EV chargers have been announced or opened. President Biden’s Investing in America agenda has attracted more than $25 billion of investment in the U.S. EV charging network. Today’s freight corridor designations are expected to crowd in even more investment for EV charging, with a particular focus on the needs of medium- and heavy-duty vehicles.

This is an all-of-government approach to aligning investments and accelerating sustainable and scalable deployment of reliable ZE-MHDV infrastructure. Focusing deployment on areas with substantial freight volume starts deployment in areas with the most opportunity to spark further investment. Deployment factors include corridor segment usage by freight volume, port usage by annual freight tonnage, projected ZE-MHDV volumes, disproportionate environmental and air quality burden from MHDV transportation and non-attainment for criteria air pollutants, states with ZEV deployment-enabling policies, and “on the ground” planning through DOE’s commercial ZEV corridor planning grants.

The National Zero-Emission Freight Corridor Strategy will prioritize, sequence, and accelerate infrastructure along key freight corridors and hubs in four phases. The phases include:

  • Establish priority hubs based on freight volumes (2024-2027)
  • Connect hubs along critical freight corridors (2027-2030)
  • Expand corridor connections initiating network development (2030-2035)
  • Achieve national network by linking regional corridors for ubiquitous access (2035-2040)

See the National Zero-Emission Freight Corridor Strategy for additional maps and detail.

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Sustainable fuels firm raises pre-Series A

The sustainable fuels-focused climate tech company raised the funding from a global syndicate of investors.

Aether Fuels, a climate technology company, has raised $8.5m in pre-Series A financing via convertible notes.

The global syndicate includes JetBlue Ventures, the corporate venture capital (CVC) division of JetBlue, as well as TechEnergy Ventures (the CVC division of the Techint Group), Doral Energy Tech Ventures (the CVC division of Doral Energy), Foothill Ventures, and existing investor, Xora Innovation, according to a news release.

Aether makes sustainable fuels to enable large industries like aviation and ocean shipping to achieve net zero emissions. The fuel is made from low-cost and abundant waste carbon streams, such as captured carbon dioxide, industrial waste gases, municipal solid waste, agricultural residues, and waste biomass. Aether’s novel process combines feedstock flexibility with maximum yield and slashes plant capital costs, enabling dramatically better unit economics while also meeting stringent sustainability criteria, according to the news release.

Aether will use the funds to accelerate the development and scale-up of its proprietary production technologies, expand its demo facility in Chicago, and grow the global team.

“We are grateful to our investors for their confidence in our technology approach and scalable global business strategy,” said Aether CEO Conor Madigan. “Their support caps a year of breakthroughs that validated our technology and crystallized our roadmap to commercialization. In addition, we appointed experienced sustainable fuel executives to key R&D, operations, and engineering leadership roles in the U.S. and Singapore, and started planning for manufacturing scale-up.”

Established in 2022 as a spin-out of Xora Innovation, a deep-tech early-stage investment platform of Temasek, the company maintains principal offices in the U.S. and Singapore.

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JERA joins German ammonia cracking pilot

The project partners want to examine whether the construction of a demonstration plant for the production of hydrogen from ammonia in the Rostock port area is feasible.

EnBW Energie Baden-Württemberg AG, VNG AG and the Japanese energy company JERA signed a memorandum of understanding with the goal of jointly conducting a feasibility study to evaluate the construction of an ammonia cracker demonstration plant, according to a news release.

The project partners want to examine whether the construction of a demonstration plant for the production of hydrogen from ammonia in the Rostock port area is feasible. The learnings from the operation of the demonstration plant include insights into process optimization, the organization of supply and demand, and the economic framework conditions along the entire value chain.

Ammonia is considered as a very promising H2 carrier for long-distance transport of hydrogen. Clean ammonia (NH3) can be produced by combining renewable hydrogen (H2) with nitrogen (N2) – the main constituent of air. The project would allow for the transport of large quantities of hydrogen as ammonia to Rostock from oversea regions, where it could be re-converted into hydrogen and then transported to German consumers and customers. An existing ammonia terminal in the Rostock port area could be used for im-porting the ammonia.

“At EnBW, we are working at full steam to transform our generation capacities from fossil fuels such as coal to non-fossil fuels such as hydrogen. The joint project between EnBW, VNG and JERA fits in very well with our efforts to become climate-neutral by 2035,” ex-plains Georg Stamatelopoulos, Member of the EnBW Board of Management / Chief Oper-ating Officer Sustainable Generation Infrastructure. “Ammonia is suitable for storing and transporting hydrogen. With an ammonia cracker, ammonia can be reconverted to hydrogen and be transported to German customers. The key is to create the right conditions now for the fastest possible decarbonization of the business and the market ramp-up for hydrogen – in particular through planning certainty for investors and international collaborations.”

In its “VNG 2030+” strategy, the Leipzig-based gas company VNG is focusing on the ramp-up of decarbonized and green gases, in particular biogas and hydrogen. “The construction of a demonstration plant of an ammonia cracker in Rostock together with JERA and EnBW is another important step towards supporting the ramp-up of hydrogen in Germany and thus making a contribution to decarbonization in eastern Germany. Hydrogen gained from ammonia will play an important role in energy supply in the future, so it is important to test and establish value chains at an early stage and thus set the course for a secure supply of hydrogen,” explains Hans-Joachim Polk, Chief Technology Officer of VNG AG.

JERA, an energy company with a global reach, which has its strength in its expertise and intelligence in the entire energy supply chain, will take on the challenge of achieving net zero CO2 emissions from its domestic and overseas businesses by 2050.

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OCOChem raises $5m seed round

The Washington-based startup has partnered with investor INPEX to evaluate collaboration opportunities on the transportation of CO2 and clean hydrogen.

Carbon conversion startup OCOchem has raised $5m in Seed funding from lead investor TO VC, according to a news release.

Japan’s INPEX Corp., the LCY Lee Family Office, and MIH Capital Management also participated in the round. They join Halliburton Labs, Halliburton Company’s energy and climate tech accelerator, which has been supporting OCOChem since 2021.

The Richland, Wash.-based company is commercializing a way to make highly versatile carbon-neutral platform molecules by electrochemically converting recycled CO2, water and clean electricity into formic acid and formate chemicals, for use in agricultural and industrial applications.

“Using renewable energy, OCOChem’s technology enables the conversion of water and carbon dioxide into formic acid, which is stable under ambient conditions.” The release states. “The formic acid can also be converted to useful carbon and hydrogen components with minimal energy input.”

In addition to investing in the company, INPEX, Japan’s largest oil and gas production company, has partnered with OCOchem to evaluate collaboration opportunities leveraging the company’s technology to transport CO2 and clean hydrogen.

OCOchem will use the new funds to scale its modular carbon conversion technology to industrial proportions and build a pilot plant for commercial demonstration operations.

“Using OCOchem technology and clean electricity, we can now do what plants and trees have been able to do for billions of years — convert CO2 and water into useful organic molecules using clean energy. But unlike photosynthesis, we can do it faster and more efficiently at a lower cost, using much less land,” said Todd Brix, co-founder and CEO of OCOchem, in the news release.

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Waste-to-energy specialist executes MoU with Nikola

The partnership will encourage the adoption of Nikola Class 8 zero-emission vehicles with Klean Industries’ partners and feedstock suppliers. Nikola will evaluate offtake opportunities from the company’s green hydrogen projects.

Klean Industries, a Vancouver-based waste-to-value technology provider, has executed an MOU with Nikola Corporation to encourage the adoption of Nikola Class 8 zero-emission vehicles with Klean’s partners and feedstock suppliers.

The two companies will also work on developing green hydrogen supply and dispensing infrastructure in the US and Canada, according to a statement seen by ReSource.

Nikola will evaluate offtake opportunities from green hydrogen projects being developed by Klean and its partners involving hydroelectric, wind and solar power in the Pacific Northwest and Canada. Using Klean’s green hydrogen, the companies will convert Klean’s logistics partners’ truck fleet to Nikola Class 8 zero-emission vehicles.

Both Klean and Nikola see a significant opportunity to collaborate on projects where Klean and its partners operate recycling, resource recovery, and waste-to-energy plants, the statement reads.

“We believe Nikola’s hydrogen-electric trucks are going to fundamentally change the ground transportation and logistics landscape. This exciting collaboration will create opportunities that will reinforce the importance of working together as we look to both deploy and develop a renewable hydrogen value chain,” said Jesse Klinkhamer, CEO of Klean Industries Inc., in a statement. “Developing clean energy projects with leading technology companies such as Nikola supports Klean’s strategic focus and enables our respective companies to create a symbiosis between waste, resources, and energy, while simultaneously helping in the creation of a circular low carbon economy. Green hydrogen has the potential to completely transform the energy landscape and drive a cleaner, more sustainable future.”

Klinkhamer said in an interview last year that Klean was in the process of hiring an advisor to raise between $250m – $500m in a strategic capital raise.

Carey Mendes, president, energy at Nikola said, “Klean’s vision of utilizing a green hydrogen fleet of trucks in their tire recycling ecosystem is a clear indication of the company’s commitment to creating a better, more sustainable future. Klean has already brought together like-minded partners to decarbonize their truck fleets which is a testament to their far-reaching commitment and deep knowledge of this sustainability space.”

Klean recently partnered with City Circle Group to build a fully integrated, continuous tire pyrolysis plant to recover carbon black and biofuel in Melbourne Australia. The company also signed a partnership agreement with H2 Core Systems to distribute and build green hydrogen projects around the globe.

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Renewable hydrogen developer to launch series A round next month

A Colorado-based renewable hydrogen developer has hired an advisor and will launch a series A funding round next month.

NovoHydrogen, the Colorado-based renewable hydrogen developer, will launch a series A capital raise in the middle of March to take on a new investor for project development and hiring, CEO Matt McMonagle said in an interview.

The company has hired GreenFront Energy Partners to run the process, McMonagle said.

NovoHydrogen builds its projects onsite with customers, as close to end use as possible, he said. The company serves transportation (heavy road transport, shipping and aviation), industrial (cement, glass, metal, steel, food, etc.) and power (peaking power and diesel generator replacement). Most of Novo’s customers are users of grey hydrogen looking to decarbonize. In the case of cement, they are looking to replace diesel for their trucks and coal and natural gas for their kilns.

“We first look to see if we can put our projects on our customer sites and make it there,” McMonagle said. “If we can’t do that, we’ll do offsite, but we still try to be as close to customers as possible to minimize that midstream component or distribution component.”

About 30 projects are in development in the US, ranging from a few megawatts to hundreds of megawatts, McMonagle said. NovoHydrogen’s 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, possibly early next year, McMonagle said. The first project could reach COD in 2024.

NovoHydrogen recently announced that it has closed its seed funding round and appointed four executives to its board of directors. Each of those executives represent an investor that participated in the seed round, McMonagle said.

The new board appointees are: Jeremy Avenier, an active investor at Ohmium International; Peyton Boswell, managing partner at Woodfield Renewable Partners; Bruno Franco, partner at Pacífico Energia and managing partner at PWR Capital; and Joseph Malchow, a managing partner at Hanover (a Silicon Valley VC), board member and investor in Enphase and board member and investor in Archaea.

More money

“We will certainly need more money as our projects mature,” McMonagle said. “I do not have the hundreds of millions of dollars on my balance sheet to build these projects.”

An ideal investor will bring accretive capabilities in hydrogen, in a field like value chain equipment or delivery, to the table, McMonagle said.

NovoHydrogen plans to be a long-term owner-operator of its projects, McMonagle said. That is an important point for customers: that the company is not going to sell the project and not care how the next owner operates.

“We want to earn future business from these customers,” McMonagle said, adding that most of them are transitioning piecemeal.

NovoHydrogen and TigerGenCo in November said they would advance development of green hydrogen capacity to reduce reliance on natural gas at the Bayonne Energy Center located in New Jersey. NovoHydrogen will develop and operate the hydrogen production facility to reduce Bayonne’s carbon emissions.

TigerGen owns the power plant and is the offtaker in that project. Ohmium International is providing the PEM electrolyzers in that project. McMonagle said the company may use other electrolyzer providers for future projects.

The company is also a partner in the Aliance for Clean Hydrogen Energy Systems (ARCHES) for the California DOE Hydrogen Hub submission.

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Advisor Profile: Cameron Lynch of Energy & Industrial Advisory Partners

The veteran engineer and financial advisor sees widespread opportunity for capital deployment into early-stage renewable fuel companies.

Cameron Lynch, co-founder and managing partner at Energy & Industrial Advisory Partners, sees prodigious opportunity to pick up mandates in the hydrogen sector as young companies and early movers attract well-capitalized investors looking for auspicious valuations.

The firm, a three-year-old boutique investment banking outfit with offices in New York and Houston, is broadly committed to the energy transition, but is recruiting for new personnel with hydrogen expertise, Lynch said, adding that he is preparing for a new level of dealmaking in the new year.

“I think we can all expect 2023 will be even more of a record year, just given the appetite for hydrogen,” Lynch said. “Hydrogen is one of our core focuses for next year.”

Cameron Lynch

Lynch started his career as a civil & structural engineer and moved into capital equipment manufacturing and leasing for oil & gas, and also industrial gasses –things like cryoge

nic handling equipment for liquid nitrogen. He started the London office of an Aberdeen, U.K.-based M&A firm, before repeating that effort in New York.

Founding EIAP, Lynch and his business partner Sean Shafer have turned toward the energy transition and away from conventional energy. The firm works on the whole of decarbonization but has found the most success in the hydrogen space.

Earlier lifecycle, better valuations

Hydrogen intersects with oil& gas, nuclear, chemicals, midstream companies, and major manufacturing.

Large private equity funds that want to get into the space are realizing that if they don’t want to pay “ridiculous valuations for hydrogen companies” they must take on earlier-stage risk, Lynch said.

Interest from big private equity is therefore comparatively high for early-stage capital raising in the hydrogen sector, Lynch said, particularly where funds have the option to deploy more capital in the future, Lynch said.

“They’re willing to take that step down to what would normally be below their investment threshold.”

Lynch, who expects to launch several transactions in the coming months with EIAP, has a strong background in oil & gas, and views hydrogen valuations as a compelling opportunity now.

“It’s very refreshing to be working on stuff that’s attracting these superb valuations,” Lynch said.

There’s a lot of non-dilutive money in the market and the Inflation Reduction Act has been a major boon to investors, Lynch said. For small companies, getting a slice of the pie is potentially life changing.

Sean Shafer

The hydrogen space is not immune to the macroeconomic challenges that renewables have faced in recent months and years, Lynch said. But as those same challenges have accelerated the move toward energy security, hydrogen stands to benefit.

Supply chain issues post-COVID pose a potential long-term concern in the industry, and equity and debt providers question the availability of compressors and lead times.

“I would say that’s one of the key issues out there,” Lynch said. There’s also the question of available infrastructure and the extent to which new infrastructure will be built out for hydrogen.

EIAP sees the most convincing uses for hydrogen near term in light-weight mobility and aerospace, Lynch said. The molecule also has a strong use case in back-up generation.

Hydrogen additionally presents companies in traditional fossil fuel verticals the opportunity to modernize, Lynch said, citing a secondary trade EIAP completed earlier this year

California’s Suburban Propane Partners acquired a roughly 25% equity stake in Ashburn, Virginia-based Independence Hydrogen, Inc. The deal involved the creation of a new subsidiary, Suburban Renewable Energy, as part of its long-term strategic goal of building out a renewable energy platform.

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