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Biofuels startup raises seed capital

Terragia Biofuel will use the capital to commercialize its biology-based approach to converting cellulosic biomass into ethanol and other products.

Terragia Biofuel, a technology startup aiming to drive the next generation of biofuels, has raised a $6m seed round led by Engine Ventures and Energy Impact Partners (EIP).

The company will use the capital to commercialize its novel biology-based approach to converting cellulosic biomass into ethanol and other products, expand its employee headcount and initiate partnerships with major biofuel producers, according to a news release.

Terragia uses engineered thermophilic bacteria to break down cellulosic biomass and convert it into ethanol and other chemical products. The company’s technology avoids key features responsible for the high cost of conventional cellulosic biofuel production by one-step “consolidated” bioprocessing without added enzymes, and leveraging mechanical disruption during fermentation (i.e., “cotreatment”) in lieu of thermochemical pretreatment.

Director of the National Renewable Energy Laboratory Martin Keller comments, “Cellulosic biofuels are a route to low-carbon fuels for aviation and other difficult-to-electrify transport modes as well as CO2 removal from the atmosphere, both of which are critical for climate stabilization. One-step biological conversion of cellulosic biomass without added enzymes or thermochemical pretreatment has clear cost reduction potential relative to other process concepts.” Adds Terragia CTO and Co-Founder Lee Lynd, a Distinguished Professor at Dartmouth’s Thayer School of Engineering and Director of the Advanced Second Generation Biofuel Lab at the University of Campinas, Brazil, “Conversion of ethanol to fuels for planes, ships, and trucks is a leading option for approximately half of future global transportation energy demand, for which electrification is likely impractical, corresponding to a trillion dollar market. With full penetration of this market, Terragia’s technology is projected to displace 3 gigatons of CO2 emissions annually and enable capture of a yet larger amount of CO2.”

In partnership with Dartmouth College and the University of Campinas, the ongoing development of Terragia’s technology is supported by funding from the U.S. Department of Energy Center for Bioenergy Innovation and the São Paulo Research Foundation, by grants from the U.S. Department of Agriculture and National Science Foundation, as well as private capital.

“Terragia has an exciting opportunity to succeed where others in the cellulosic biofuel industry have not. The company’s technology provides a radically different approach that uses biology to reduce the high costs and scale of conventional cellulosic biofuel production,” said Katie Rae, CEO and Managing Partner of Engine Ventures. “With an experienced management team, deep industry experience and a joint development agreement with a major U.S. biofuel producer already underway, Terragia’s go-to-market approach has the potential not only to meet future global transport demand but to create low carbon biofuel products at a price point competitive with fossil fuels.”

“We are proud to support Terragia on their path to revolutionizing cellulosic ethanol and sustainable aviation fuel (SAF) production,” said Ashwin Shashindranath, Partner at Energy Impact Partners. “Low-carbon fuels are a cornerstone of the energy transition, and we think Terragia has the right team and technology to become a leader in the field.”

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The South Dakota-based utility purchased the RNG production facility at the Dubuque Metropolitan Area Solid Waste Agency site.

Black Hills Corp., through its nonregulated subsidiary, Black Hills Energy Renewable Resources, completed the purchase of a renewable natural gas production facility in Dubuque, Iowa, according to a news release.

The acquisition of the production facility at the Dubuque Metropolitan Area Solid Waste Agency site includes onsite infrastructure and the rights to RNG production at the landfill under a long-term contract. The facility currently injects RNG into the natural gas distribution system serving Dubuque, which is owned and operated by Black Hills Corp.’s regulated natural gas utility in Iowa.

“This investment advances our goal to responsibly integrate renewable resources as a component of our overall emissions reduction strategy,” said Todd Jacobs, senior vice president of growth and strategy. “This acquisition represents our entry into the production of RNG as a nonregulated business while leveraging our expertise in owning and operating regulated natural gas pipeline systems, including RNG interconnections.”

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“Investing in the production facility will allow BHERR to focus on growing its RNG business with an efficient and sustainable lower-carbon fuel,” said Jacobs.

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Hydrogen investors like patents, IEA says

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Start-ups with patents represented less than a third of companies in the report’s data set, according to a news release summarizing the findings.

The study found that holding a patent is also a good indicator of whether a start-up will keep attracting finance, noting that “more than 80% of late-stage investment in hydrogen start-ups in 2011-2020 went to companies that had already filed a patent application in areas such as electrolysis, fuel cells, or low-emissions methods for producing hydrogen from gas.”

The percentage increases to 95% when funding acquired in the IPO/post-IPO stage is taken into consideration.

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Advisors selling up to 50% of the company’s US onshore renewables platform are pitching the value-enhancing potential of green hydrogen development in the process.

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The Portland, Oregon-based clean energy firm, which is owned by Spain-based Iberdrola, is running a process to sell up to a 50% stake in roughly 9.6 GW of operational projects and an 18 GW development pipeline, the sources said. The process launched in March with Lazard and Rothschild on the sellside.

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The company is also involved in seven “hydrogen hub” regions in the US: regions participating in the Department of Energy’s grant process for funding under the Bipartisan Infrastructure Act.

Avangrid last year signed an MoU with Sempra Infrastructure to develop large-scale green hydrogen and ammonia projects powered by renewable sources. The teaser notes that the company is advancing a flagship joint development project and initiating conversations with offtakers.

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Avangrid declined to comment. Rothschild and Lazard did not respond to requests for comment.

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E-fuels developer Infinium is raising $300m in a Series C capital raise that launched last year, according to a source familiar with the matter.

BofA Securities has been engaged to advise on the process, as previously reported by ReSource. The amount of the capital raise was not previously reported.

Infinium and BofA did not respond to requests for comment. 

Infinium recently announced the existence of Project Roadrunner, located in West Texas, which will convert an existing brownfield gas-to-liquids project into an e-fuels facility delivering products to both US and international markets. Breakthrough Energy Catalyst has contributed $75m in project equity.

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The company, backed by Suburban Propane, plans to reach COD on its next facility in the Gulf Coast in 2026, Boudreaux said. Late last year the company hired its first CFO Ann Anthony and COO Derek Winkel.

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