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Canadian firms advancing compressed natural gas trucking corridor

Tourmaline Oil Corp and Clean Energy Fuels have committed CAD 70m to build and operate a network of compressed natural gas stations across Western Canada.

Tourmaline Oil Corp. and Clean Energy Fuels Corp. announced today a CAD 70m Joint Development Agreement to build and operate a network of compressed natural gas (CNG) stations along key highway corridors across Western Canada.

Through this 50-50 shared investment, Tourmaline and Clean Energy expect to construct and commission up to 20 CNG stations over the next five years, which will allow heavy-duty trucks and other commercial transportation fleets that operate in the area to transition to the use of CNG, a lower carbon alternative to gasoline and diesel.

Clean Energy will operate the stations. One of North America’s largest logistics companies, Mullen Group Ltd. has indicated its support for the initiative as an early adopter and expects to use the network of stations to fuel its growing fleet of CNG-powered trucks.

“Tourmaline is Canada’s largest natural gas producer, and innovation is at the heart of everything we do. So this partnership with Clean Energy is a natural fit,” said Michael Rose, chairman, president and CEO, Tourmaline. “Across our operations, we have achieved significant emission reductions and cost savings by displacing higher-emitting fuels with natural gas. Thanks to this exciting initiative, we’re able to help the transportation industry do the same.”

This initiative will develop critical infrastructure needed to support the adoption of lower-carbon natural gas fuels that are commercially available today. The use of this domestic, abundantly produced and easily distributed resource is expected to result in significant carbon dioxide (CO2) emission reductions and cost savings for the transportation industry in Canada. Currently, fueling vehicles with CNG results in up to 50% cost savings when compared to retail diesel prices, on an energy equivalent basis. These CNG stations also pave the way for renewable natural gas (RNG) availability in the future, as the same fueling-station infrastructure that dispenses CNG can be used to dispense RNG.

“Clean Energy currently operates the most extensive network of natural gas fueling stations and is the largest distributor of RNG in North America. We continue to invest in upstream production of RNG and the fueling infrastructure needed to provide the trucking industry a cleaner alternative of operating,” said Andrew Littlefair, president and CEO, Clean Energy. “This new partnership with Tourmaline will provide Canada’s trucking industry with an economical, convenient, and sustainable pathway to net zero and will contribute to Canada’s overarching climate change goal.

“As one of North America’s largest logistics providers, the Mullen Group is committed to being a leader in sustainability. We are excited to support this initiative. We have already made a significant investment in CNG trucks and are extremely confident that this technology will play a huge role in the decarbonization of our industry,” said Murray Mullen, chair, SEO and president, Mullen Group.

Based on the anticipated commissioning of up to 20 stations over the next five years, approximately 3,000 natural gas-powered trucks could be fueled using CNG every day, resulting in a reduction of approximately 72,800 tonnes of CO2 equivalent usage per year. This is equivalent to removing 15,690 passenger vehicles from the road. As future demand increases, the capacity of these stations can be expanded, and new stations added, which would result in greater environmental performance improvement.

The first station expected to be jointly owned under the agreement, located north of Edmonton, is operational and well-positioned for heavy-haul transport routes with close proximity to key customers and stakeholders. The next stations which Tourmaline and Clean Energy expect to commission in the first half of 2024 are anticipated to be located within the municipalities of Calgary and Grande Prairie in Alberta and Kamloops, B.C.

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Plug Power and Olin launch hydrogen production and marketing JV

Plug Power and Olin Corporation have launched Hidrogenii, a joint venture to provide green hydrogen throughout North America.

Plug Power and Olin Corporation have launched Hidrogenii, a joint venture to provide green hydrogen throughout North America, according to a press release.

Hidrogenii’’s first project will be a a 15 ton per day hydrogen plant in St. Gabriel, Louisiana.

Plug will be the exclusive marketer of the joint venture’s hydrogen and provide logistical support for delivery, while Olin, North America’s largest producer of electrolytic hydrogen headquartered in Missouri, will provide reliable hydrogen supply and operational expertise.

The Louisiana plant will benefit from state and local tax subsidies. It joins Plug’s growing national network of hydrogen plants in various planning and construction phases in New York, Tennessee, Georgia, Texas and California.

By 2025, Plug expects to produce 500 tons per day of liquid green hydrogen.

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Blue Biofuels receives DOE grant

The DOE grant will enable Blue Biofuels to advance its efforts to scale and optimize its patented cellulose-to-sugar process.

Blue Biofuels, Inc. has received a Department of Energy (DOE) Small Business Innovation Research (SBIR) Phase 1 grant.

The grant, valued at $206,500, will further propel Blue Biofuels’ mission to revolutionize the biofuels sector and create sustainable transportation and aviation fuel.

The DOE SBIR Phase 1 grant will enable Blue Biofuels to advance its efforts to scale and optimize its patented cellulose-to-sugar (CTS) process. This funding will support the company’s team of scientists and engineers as they continue to refine cutting-edge fuel technology aimed at reducing carbon emissions and mitigating climate change.

“We are honored to be awarded the DOE SBIR grant, which recognizes our commitment to developing clean and sustainable fuels,” CEO Benjamin Slager said in the release. “This grant not only validates our ongoing efforts but also provides us with the resources needed to accelerate our research and move closer to commercialization.”

With this grant, Blue Biofuels aims to successfully complete its Phase 1 scaling objectives, paving the way for future opportunities to secure larger-scale grants. The Company is poised to leverage the findings and data generated from this project to pursue subsequent DOE SBIR Phase 2 & 3 grants, potentially worth millions of dollars. Blue Biofuels remains steadfast in its commitment to advancing the biofuels industry and ushering in a cleaner and greener energy landscape.

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Heliogen expecting equity partners for California H2 facility

The company anticipates bringing on additional equity partners to support the project’s construction costs.

Heliogen has signed an MOU with the City of Lancaster, California to develop and provide equity for a green hydrogen generation facility there, according to a press release.

“Heliogen expects to bring on additional equity partners to support the project’s construction costs,” the release states.

The City of Lancaster will assist with site identification, review by City Council and the community as required, support for permitting process, and evaluation of economic development potential.

This relationship is expected to accelerate the use of concentrating solar thermal energy for a commercial hydrogen generation facility and builds upon the existing relationship between the City of Lancaster and Heliogen, which sited its demonstration test facility in the city in 2019.

The facility is expected to leverage Heliogen’s patented technology to use AI and advanced computer vision software to concentrate sunlight and could generate up to 1500 metric tons per year of carbon-free hydrogen.

The Heliogen facility could help support other projects within the city and region, including sustainable aviation fuel for hydrogen-powered aircraft, fueling stations for hydrogen-powered vehicles, and sales and distribution of hydrogen fuel for industrial processes such as vertical agriculture, cement, and mining.

This news follows a recent announcement that Heliogen intends to develop a green hydrogen facility on leased land in the Brenda Solar Energy Zone in Arizona. The company also entered into a letter of intent with sustainable fuels-focused Dimensional Energy to produce sustainable aviation fuel.

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Green ammonia provider looking to US for growth

A European green ammonia solutions provider is considering a number of strategies to grow in the US, including capital raising, strategic partnerships and a spinoff.

Proton Ventures, a provider of small-scale green ammonia solutions based in Holland, is considering several possibilities for growing its presence in the US, founder Hans Vrijenhoef said on the sidelines of the World Hydrogen Summit in Rotterdam.

Vrijenhoef, who also serves as president of the Ammonia Energy Association, founded Proton Ventures in 2000 after speaking to John Holbrook, an early proponent of ammonia as a fuel and a founder of the AEA.

Today Vrijenhoef is a minority shareholder owning one-third of the company, he said. The majority shareholder is Kees Koolen, the former CEO of Booking.com and a founding partner of EQT Ventures.

In the US the firm’s concept is to deploy its technology – small scale ammonia production – at wind farms in Midwestern states like Iowa, Kansas and the Dakotas to make fertilizer for regional farms and replace grey hydrogen in US agribusiness.

The company’s technology has also been deployed to convert flare gas at shale oil production sites in Saskatchewan into ammonia, Vrijenhoef said, adding that any energy source is applicable.

“We are in a position to deploy multiple hundreds of units in the US,” he said. “We need liquidity to do projects. We need a shareholder to come in.”

The company may have a need for a US-based M&A advisor, Vrijenhoef said. Multiple capital strategies, including a spinoff of the North American subsidiaries, are possible.

The technology is proven through a pilot project in Morocco, which has reached FID, he said. Modular ammonia units can produce between 1,000 and 20,000 tonnes, with the option to put multiple units at one site.

The company partly contracts its manufacturing in The Netherlands but could find new partnerships in the US, Vrijenhoef said. He highlighted an existing relationship with Northwest Mechanical in Davenport,Iowa.

The US subsidiary of Proton Ventures is an LLC based in Cheyenne, Wyoming, Vrijenhoef said. A Calgary-based subsidiary is called NFuelTechnologies.

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Analysis: Premium for clean hydrogen unlikely

A group of hydrogen offtakers say they have every intention of decarbonizing their fuel intake, but barring the implementation of a carbon-pricing mechanism, paying a premium for it is unrealistic.

Passage of the Inflation Reduction Act ignited investor interest in the global market for clean hydrogen and derivatives like ammonia and methanol, but offtake demand would be better characterized as a flicker.

And while many questions about the nascent market for green hydrogen remain unanswered, one thing is clear: offtakers seem uninterested in paying a “green premium” for clean fuels.

That doesn’t mean offtakers aren’t interested in using clean fuels – quite the opposite. As many large industrial players worldwide consider decarbonization strategies, hydrogen and its derivatives must play a significant role.

Carbon pricing tools such as the Carbon Border Adjustment Mechanism in Europe could introduce a structural pricing premium for clean products. And industry participants have called for carbon levies to boost clean fuels, most recently Trafigura, which released a white paper today advocating for a carbon tax on fossil-based shipping fuels.

But the business case for clean fuels by itself presents an element of sales risk for potential offtakers, who would have to try to pass on higher costs to customers. Even so, there is an opportunity for offtakers to make additional sales and gain market share using decarbonization as a competitive advantage while seeking to share costs and risks along the value chain.

“It’s a very difficult sell internally to say we’re going to stop using natural gas and pay more for a different fuel,” said Jared Elvin, renewable energy lead at consumer goods company Kimberly-Clark. “That is a pickle.”

Needing clean fuels to reach net zero

Heavy-duty and long-haul transportation is viewed as a clear use case for clean fuels, but customers for those fuels are highly sensitive to price.

“We’re very demand focused, very customer focused,” said Ashish Bhakta, zero emission business development manager at Trillium, a company that owns the Love’s Travel Shop brand gas stations. “That leads us to be fuel-agnostic.”

Trillium is essentially an EPC for fueling stations with an O&M staff for maintenance, Bhakta said.

As many customers consider their own transitions to zero-emissions, they are thinking through EV as well as hydrogen, he said. Hydrogen is considered better for range, fueling speed and net-payload for mobility, all of which bodes well for the clean fuels industry.

One sticking point is price, he said. Shippers are highly sensitive to changes in fuel cost – and asking them to pay a premium doesn’t go far.

Alessandra Klockner, manager of decarbonization and energy solutions manager at Brazilian mining giant Vale, said her employer is seeking partnerships with manufacturers, particularly in steel, to decarbonize its component chain.

In May Vale and French direct reduced iron (DRI) producer GravitHy signed an MoU to jointly evaluate the construction of a DRI production plant using hydrogen as a feedstock in Fos-sur-Mer, France. The company also has steel decarbonization agreements in Saudi Arabia, the UAE and Oman.

In the near term, 60% of Vale’s carbon reductions will come from prioritizing natural gas, Klockner said. But to reach net zero, the company will need clean hydrogen.

“There’s not many options for this route, to reach net zero,” she said. “Clean hydrogen is pretty much the only solution that we see.”

Elvin, of Kimberly-Clark, noted that his company is developing its own three green hydrogen projects in the UK, meant to supply for local use at the source.

“We’re currently design-building our third hydrogen fueling facility for public transit,” he said. “We’re basically growing and learning and getting ready for this transition.”

The difficulty of a “green premium

The question of affordability persists in the clean fuels space.

“There are still significant cost barriers,” said Cihang Yuan, a senior program officer for the World Wildlife Fund, an NGO that has taken an active role in promoting clean fuels. “We need more demand-side support to really overcome that barrier and help users to switch to green hydrogen.”

Certain markets will have to act as incubators for the sector, and cross-collaboration from production to offtake can help bring prices down, according to Elvin. Upstream developers should try to collaborate early on with downstream users to “get the best bang for your buck” upstream, as has been happening thus far, he added.

Risk is prevalently implied in the space and must be shared equitably between developers, producers and offtakers, he said.

“We’ve all got to hold hands and move forward in this, because if one party is not willing to budge on any risk and not able to look at the mitigation options then they will fail,” he said. “We all have to share some sort of risk in these negotiations.”

The mining and steel industries have been discussing the concept of a green premium, Klockner said. Green premiums have actually been applied in some instances, but in very niche markets and small volumes.

“Who is going to absorb these extra costs?” she said. “Because we know that to decarbonize, we are going to have an extra cost.”

The final clients are not going to accept a green premium, she said. To overcome this, Vale plans to work alongside developers to move past the traditional buyer-and-seller model and into a co-investment strategy.

“We know those developers have a lot of challenges,” she said. “I think we need to exchange those challenges and build the business case together. That’s the only way that I see for us to overcome this cost issue.”

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Exclusive: Renewable fuels firm hires advisor for topco raise

A renewable fuels firm with operations in California has hired a bulge bracket bank to raise project and platform capital for new developments in the Gulf Coast.

Oberon Fuels, a California-based renewable fuels developer, has hired Morgan Stanley for a topco and project capital raise to launch soon, CEO Rebecca Bordreaux said in an interview.

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.

Oberon produces rDME at its Maverick Innovation Center in Brawley, California and recently established a partnership with DCC Fuels focused on Europe.

The location of the Gulf Coast facility is not public, Bordreaux said, though the company aims to reach FID on it this year. When operational it would produce 45,000 mtpy of methanol, or a comparative amount of rDME. Capex on the facility is in the range of $200m.

The company is shifting toward production of methanol as a shipping fuel, she said. New opportunities also include using DME as a renewable hydrogen carrier, as the fuel is easily transportable and compatible with many existing logistical networks.

Oberon is also preparing to issue $100m of municipal bonds from the state of Texas, Bordreaux said.

More than $50m has been raised by the company to date, with Suburban Propane being the largest investor and customer in California, Bordreaux said. The company has a third project in the pre-FEED phase.

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