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Carbon capture outfit evaluating Louisiana acreage for CCS projects

Milestone Carbon plans to use the land to permanently sequester hundreds of millions of tons of industrial carbon dioxide.

Milestone Carbon, a leading carbon sequestration company, today announced its intent to evaluate approximately 46,000 acres for carbon capture and sequestration (CCS) in Louisiana’s Terrebonne Parish, according to a news release.

Milestone Carbon plans to use the land to permanently dispose of industrial CO2 emissions in underground geologic formations, with the potential to sequester hundreds of millions of tons of carbon dioxide. The company will evaluate the land’s potential for multiple Class VI injection wells to support the decarbonization efforts of existing and planned industrial facilities in southeastern Louisiana. Today, there are more than 35 million tonnes of CO2 emissions annually in the region.

“Louisiana has many of the critical elements for successful carbon capture projects, including great geology, strong policy support, and significant industrial emissions,” said Milestone Carbon Senior Vice President Chris Davis. “We are pleased to work with the landowners leveraging Milestone’s experience in sequestration site development, to accelerate CCS growth in Louisiana.”

Following recent news about Department of Energy funding being awarded to the University of Utah’s CarbonSAFE II: Storage Complex Feasibility project, co-sponsored by Milestone Carbon, this announcement is another exciting step in building Milestone Carbon’s portfolio of CCS sites, which includes projects in the Permian Basin, the Rockies, and other Gulf Coast states.

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Aviation manufacturers issue statement in support of SAF industry

The statement outlines a series of measures the manufacturers are promoting to advance decarbonization of the aviation industry.

Statement by the Chief Technology Officers of seven of the world’s major aviation manufacturers reads as follows:

Over a decade ago the aviation industry was the first global sector to set ambitious emission reduction goals. Today, we come together again to support the industry’s commitment to achieving net zero carbon emissions for civil aviation by 2050 and to highlight the importance of the production, distribution, and availability of qualified Sustainable Aviation Fuel (SAF) needed to achieve this goal. The development of fuel-efficient aircraft technologies has been a priority for the aviation industry for over 50 years and remains a priority. Greater uptake of SAF would mitigate the projected growth in aviation COemissions as the customer demand for global air travel increases.

Our companies are steadfast in delivering the technical solutions required to reduce the carbon emissions of the air transportation sector through our work in three key areas:

  • Developing advanced aircraft and propulsion technologies that enable net-zero carbon emissions while maintaining the safety and quality standards of our industry
  • Implementing improvements in aircraft operations and infrastructure
  • Supporting policies and measures that accelerate the availability and adoption of qualified SAF.

Increasing the production and utilization of SAF is a critical step for achieving the air transportation sector’s net zero CO2 emissions goal by 2050. However, the production of SAF is currently estimated at less than 0.1% of the global demand for jet fuel today. Moreover, SAF prices are typically two to five times higher than the price of conventional jet fuel. The supply is further constrained by competition for renewable fuels from other sectors that have alternative decarbonization options, such as with surface transportation and heating.

We support government policies and initiatives that stimulate investment in production capacity, reduce costs, and encourage greater industry uptake. This includes the US Inflation Reduction Act of 2022 (IRA), which provides a blender’s tax credit. The IRA also authorizes funding to support advanced technologies and infrastructure that enable expanded SAF production and distribution capacity in the US, as well as projects to develop fuel efficient aircraft or otherwise reduce emissions from flying. Public-Private Partnerships, such as the FAA FAST Tech Program, would enhance OEM adoption, testing, and technical clearance of new emerging SAF pathways to ensure seamless insertion into the commercial fleet.

Similarly, the CTOs welcome the political agreement found on ReFuelEU Aviation which will provide a strong signal for the deployment of SAF in air transport, and look forward to the legislation being adopted as soon as possible. The EU needs to implement the right industrial support policies, within the Net Zero Industry Act, to accelerate the availability of SAF and synthetic kerosene at commercial scale, building on the work of the Industrial Alliance for Renewable and Low Carbon Fuels (RLCF). In addition, qualification efforts that support the development of co-processing technologies that can harness the existing capital infrastructure will accelerate the availability of  SAF at commercial scale.

Public-Private Partnerships can play a key role in increasing the development and use of SAF through policy definition and alignment, along with financial incentives.  Policymakers have the chance to accelerate these processes by providing sustained and predictable support to the multi-year development of novel technologies, and by stimulating the ramp-up of capacity. Recognizing the technical challenges associated with decarbonizing aviation, greater public policy and financial support to accelerate SAF production and distribution over fuels used for surface transportation is essential.  Additionally, close collaboration with the aviation industry and fuel suppliers is required in the development of infrastructure and investment in SAF production capacity to accelerate availability in support of demand. Lastly, establishing standards for qualification of 100% SAF pathways that ensure full compatibility with engines and aircraft for civil and appropriate defence applications as they become available is essential.

We, as CTOs, are committed to supporting policies that increase the supply of SAF while ensuring a consistent and predictable demand through harmonised global measures. The aviation industry plays a pivotal role in modern life connecting people, economies, and nations. We are unified in the proposition that our industry has a prosperous and more sustainable future, and that we can make it happen through the near-term implementation of lasting industry-wide and globalized harmonized policies.

[SIGNATORIES LISTED ALPHABETICALLY BY COMPANY]

Sabine Klauke
Chief Technology Officer
Airbus

 

Todd Citron
Chief Technology Officer
Boeing

 

Bruno Stoufflet
Chief Technology Officer
Dassault Aviation

 

Christopher Lorence
Chief Engineer
GE Aerospace

 

Geoff Hunt
Senior Vice President, Engineering
Pratt & Whitney

 

Grazia Vittadini
Chief Technology Officer
Rolls-Royce

 

Eric Dalbiès
Strategy & Chief Technology Officer
Safran

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American Airlines invests in Universal Hydrogen

American joins Airbus Ventures, GE Aviation and Toyota Ventures, as well as several major hydrogen producers and aircraft lessors, as strategic investors.

American Airlines has made a strategic equity investment in Universal Hydrogen Co., a company building a green hydrogen distribution and logistics network for aviation.

The investment supports American’s science-based targets to reduce greenhouse gas (GHG) emissions by 2035, and ultimately its commitment to achieve net zero GHG emissions by 2050, and makes American the first U.S. airline to make two direct investments focused on the development of both hydrogen-electric propulsion technology and the future of hydrogen distribution logistics, according to a news release.

American joins Airbus Ventures, GE Aviation and Toyota Ventures, as well as several major hydrogen producers and aircraft lessors, as strategic investors in Universal Hydrogen.

Universal Hydrogen’s fuel distribution network uses modular hydrogen capsules that are handled like cargo, eliminating the need for new fueling infrastructure at airports and speeding up fuel loading operations. Universal Hydrogen anticipates starting hydrogen deliveries for regional aircraft in 2025, with plans to expand its services to larger, single aisle aircraft — first for auxiliary power in the late-2020s and then as a primary fuel by the mid-2030s. Because these segments represent two-thirds of aviation emissions — and with green hydrogen being a true zero-carbon fuel — these advances put aviation on a path to meet Paris Agreement emissions targets.

“This technology has the potential to be a game-changer on the industry’s path to zero-emission flight,” said American’s Chief Financial Officer Derek Kerr. “As the world’s largest airline, American has a responsibility to exercise leadership in making aviation sustainable. Our investment in Universal Hydrogen represents a vote of confidence for green hydrogen as a key element of a sustainable future for our industry.”

“Together with our investors, we are putting together the end-to-end value chain to make hydrogen aviation a near-term commercial reality,” said Paul Eremenko, co-founder and CEO of Universal Hydrogen. “This move by American is a strong signal that customers want a true zero-emissions solution for passenger aviation and are willing to back tangible, pragmatic steps to get there quickly.”

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Steelmaker Cleveland-Cliffs completes blast furnace hydrogen trial

Hydrogen was used as a partial substitute for the coke necessary for iron reduction, ultimately replacing the release of CO2 with the release of water vapor with no impact to product quality or operating efficiency.

Cleveland-Cliffs Inc. has successfully completed a hydrogen (H2) injection trial at its Middletown Works blast furnace.

This groundbreaking introduction of hydrogen gas as an iron reducing agent in the blast furnace is the first-ever use of this carbon friendly technology in the Americas region, the company said in a news release. The successful use of hydrogen gas represents a significant step toward the future decarbonization of blast furnaces, which are necessary for the continued service of the most quality-intensive steel applications, particularly for the automotive industry.

During the trial completed on May 8, 2023, hydrogen gas was injected into all 20 tuyeres at the Middletown #3 blast furnace, facilitating the production of clean pig iron – the foundation of high-end steelmaking. Hydrogen was used as a partial substitute for the coke necessary for iron reduction, ultimately replacing the release of CO2 with the release of H2O (water vapor) with no impact to product quality or operating efficiency. The hydrogen was delivered to the Middletown facility via the existing pipeline and transportation infrastructure in place for the facility’s other hydrogen uses, including for its annealing furnaces.

Lourenco Goncalves, Cliffs’ chairman, president and chief executive officer, said: “We are proud to be the first company in the Americas to inject hydrogen into a blast furnace – a demonstration of our commitment to develop and implement breakthrough technological advancements toward decarbonization. Cleveland-Cliffs thrives on innovation, so it was fitting that this major step was completed just a short distance from our Cliffs Research and Innovation Center in Middletown, Ohio. This achievement proves our ability to use green hydrogen throughout our footprint when it becomes readily and economically available, including in our seven blast furnaces and our state-of-the-art direct reduction facility. We are already the world leaders in natural gas injection, and this success confirms there is a bright, sustainable and environmentally friendly future for the much needed BF-BOF steelmaking technology.”

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Storage solutions firm in the market for strategic capital

An early-stage provider of hydrogen storage technology has hired a UK-based financial advisor to raise capital for a pilot plant.

Hydrogen carrier technology firm H2Fuel is seeking to raise approximately $25m to build a pilot project, according to sources familiar with the company’s plans.

The Dutch-based company has mandated a UK-based financial advisor to engage potential investors, with capital needs in the $12.5m range of a $25m project cost, the sources added.

In an interview, H2Fuel CEO Peter Huisman said the firm is “location agnostic” in looking for a site for a pilot project, but would prefer the US. Europe and India are also possibilities.

“We are early stage, in our view,” Huisman said. “[An investor will] need to have a long-term view of the market.”

Huisman declined to say which bank his company has hired but referred to it as a “top five” institution.

H2Fuel’s process combines hydrogen to salt, forming an energy-dense solid compound that can be transported and stored in dry conditions without complex requirements. A patented energy release process requires no extra energy, Huisman said.

The company has talked with some large strategics but has been told they are too early, Huisman said. The company views the near-term capital opportunities as one for pension funds or a venture capital.

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Former Denbury executive targeting growth through CCS at industrial emitters

Tracy Evans, a former COO of Denbury Resources, has launched a business unit aimed at offering carbon capture and sequestration services for existing industrial emitters.

CapturePoint, a Texas-based carbon capture and enhanced oil recovery specialist, is seeking to grow by offering carbon capture services to existing industrial emitters.

The company, started with an initial focus on enhanced oil recovery operations using CO2, has launched a subsidiary called CapturePoint Solutions to capitalize on growing demand for carbon capture services at industrial plants, CEO Tracy Evans said in an interview.

Evans, a former chief operating officer of Denbury Resources, has years of experience operating CO2 capture units, pipelines, and oil wells. “The only difference between EOR utilization and sequestration is going to the saline aquifers,” he said of the pivot.

The company’s primary focus is on existing emissions, Evans said, emphasizing the immediate opportunity over proposed plants that might take many years to build. He added that the company would target “pure” sources of CO2 versus diluted sources.

Evans brought in a JV equity partner for the CCS business, but declined to name them. He said the company is sufficiently capitalized for now but might need to raise additional equity as it signs up new projects in the next 12 to 16 months.

Tax equity and CCS

CapturePoint recently completed a tax equity deal for a CCS facility that has been operational since 2013, thanks to changes to provisions governing the use of 45Q for carbon capture that allowed existing plants to qualify if they capture over 500,000 tons of CO2.

The deal, at CVR Partners’ Coffeyville fertilizer plant, opened up an initial payment of $18m and includes installment payments, payable quarterly until March 31, 2030, totaling up to approximately $22m.

An ethanol facility where CapturePoint operates will also qualify for 45Q benefits because 80% or more of the carbon capture unit is being rebuilt, Evans said. The company was able to finance the new construction at the ethanol facility from cash flow out of its oil & gas operations.

Going forward, new projects installed at existing emitters will follow a project finance model, with equity, debt, and 45Q investors, Evans said. The company will use a financial advisor when the time is right, the executive noted, but said there’s more work to be done on sizing and costs before an advisor is lined up.

“The capture costs are similar for each site,” he said. “The pipeline distances to a sequestration site is what drives significant variation in total capital costs.”

Evans believes that tax credit increases in the Inflation Reduction Act – from $35 per ton to $60 per ton for CO2 used in EOR, and $50 per ton to $85 for CO2 sequestration – should help the CCS market evolve and lead to additional deals.

“There wasn’t much in it for the emitter at $35 and $50, to be honest,” he said, “whereas at $60 and $85 there’s something in it for the emitter.”

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Pennsylvania blue hydrogen DevCo planning project equity raise

A natural gas company has tapped an advisor and is planning to launch a process to raise project equity in the fall for a blue hydrogen production facility with contracted offtake in Pennsylvania.

KeyState Energy, a Pennsylvania-based development company, has engaged a financial advisor to launch a $60m equity process in September, according to two sources familiar with the matter.

Young America Capital is advising on the forthcoming process, the sources said.

The capital raise is for the company’s marquee Natural Gas Synthesis blue hydrogen project in Clinton County, one of the sources said. CapEx for the project is estimated at $1.5bn. OCGI is a pre-FEED investor in the project and the coming equity raise is meant to attract a FEED investor.

The 200 mtpd project has contracted offtake with Nikola Corporation, one of the sources said. In October it was reported that Nikola and KeyState were working towards a definitive agreement to expand the hydrogen supply for Nikola’s zero-emissions heavy-duty fuel cell electric vehicles.

The 7,000-acre natural gas and geologic storage site was formerly known for coal, iron and rail, according to the company’s website.

KeyState Energy did not respond to a request for comment. YAC declined to comment.

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