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CF Industries and Lotte Chemical collaborating on US ammonia production

An MOU establishes a framework for the companies to assess joint development and investment in a greenfield clean ammonia production facility in the US, with long term offtake in South Korea.

CF Industries, the global producer of ammonia, has entered a MOU with South Korea’s Lotte Chemical to jointly explore clean ammonia production in the US with long-term offtake into South Korea, according to a news release.

The MOU establishes a framework for the companies to assess joint development and investment in a greenfield clean ammonia production facility in the US, including at CF Industries’ Blue Point Complex in Louisiana.

The prospective ammonia facility would leverage carbon capture and sequestration technologies to reduce CO2 emissions from the ammonia production process to a level that meets or exceeds South Korea’s clean ammonia requirements.

Additionally, the companies will quantify expected clean ammonia demand in South Korea for power generation, bunkering and other sectors, considering regulatory and policy requirements, as well as safety and environmental considerations.

CF Industries recently signed a MOU with Japan’s JERA to supply up to 500,000 mtpy of ammonia beginning in 2027.

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Renewable fuels company Raven SR awarded EU commission grant

The Wyoming-based company received the grant for the development of a waste-to-hydrogen plant in Spain.

Raven SR Inc., a renewable fuels company, has been awarded a €1.7m (USD$1.75m) grant from the European Commission for the development of a waste-to-hydrogen production facility in the Aragón region of Spain, according to a news release.

The funding is part of a broader €14m European Commission grant to Hy2Market, a multi-regional project led by the New Energy Coalition to research and produce hydrogen on an accelerated timeframe.

The company has been working on a $100m capital raise expected to close last month, as reported by ReSource.

Raven SR earlier this year established Raven Iberia, a wholly owned subsidiary in Zaragoza, the capital of Aragón, in conjunction with planning the $35m waste-to-hydrogen production facility in the region. The modular project’s commercial operations are targeted to begin in 2024 and the fuel supply will serve hydrogen-powered vehicles.

The Raven SR project in Aragón will produce 1,600 metric tons per year of renewable hydrogen from approximately 75 tons of organic solid waste per day. Raven SR’s patented, non-combustion technology reduces waste and emissions while creating clean, renewable fuel. Its design provides higher energy output per ton of waste than any other waste-to-hydrogen technology worldwide.

“We are honored to receive such broad support for our first waste-to-hydrogen production facility in Europe,” said Raven SR CEO Matt Murdock. “This initial project in Spain provides a foothold in a regional market that is highly supportive of shifting away from carbon-intensive fuels to achieve a net-zero energy economy. We also look forward to collaborating within the wider Hy2Market consortium to potentially expand to additional sites in the European Union.”

Raven SR’s project in Spain was chosen late last year by the S3 European Hydrogen Valleys Partnership as the best new industrial European initiative linked to hydrogen due to its advanced technological development stage and potential for scaling up in the European Union. Raven SR is also part of the Pilot Action Hy2Market and European Consortium related to the Interregional Innovation Investment Funding Instrument I3, which aims to support the commercialization and scaling up of interregional European innovation projects and investments through the development of European hydrogen value chains.

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Calumet receiving interest from strategics for SAF business

The specialty products maker is working with a banker as it fields interest from strategics for its sustainable aviation fuel business.

Specialty products maker Calumet is working with Lazard as it evaluates investment inquiries from strategics that are interested in the company’s sustainable aviation fuel (SAF) business.

Calumet has already contracted for 2,000 barrels per day of SAF with a blue-chip offtaker through its subsidiary Montana Renewables, based in Great Falls, Montana. That amount would make Calumet the largest SAF producer in North America once engineering modifications are complete in early 2023, said Louis Borgmann, CFO and EVP at Calumet.

Meanwhile, preliminary engineering work has been done to expand SAF production to as much as 15,000 barrels per day, a “world-class position [that] has generated considerable interest from strategic investors,” Borgmann added on the company’s 3Q22 earnings call.

Calumet had engaged Lazard to conduct a process that culminated in a $250m investment in Montana Renewables from Warburg Pincus in August, 2022. The investment, in the form of a participating preferred equity security, valued Montana Renewables at a pre-commissioning enterprise value of $2.25bn.

“Lazard remains retained. They’re out there. They’re very opportunistic,” Borgmann said. “And inbound honestly picked up with SAF. So, we don’t feel a rush, but there could be an opportunistic deal here that we could consider.”

Borgmann added that Montana Renewables’ SAF capacity was quickly contracted at a premium to renewable diesel prices.

The company is positioned to be a first mover in the high-growth West Coast and Canadian markets for SAF, Borgmann said, noting Montana Renewables’ proximity to western airports.

“Montana Renewables’ proximity to end product markets is exceptional,” he said. “We serve renewable markets on the West Coast with direct BNSF Rail access. And we’re perfectly positioned to support the continuously growing low-carbon markets in Canada.”

The company and other renewable diesel producers “that have invested in the ability to produce SAF could expect a lasting advantage” compared to new, more expensive technologies for producing SAF, he said. “And Montana Renewables is expected to have an additional transportation cost advantage relative to its Gulf Coast competition.”

Montana Renewables reached a supply and offtake agreement with Macquarie, announced last week.

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E.P.A. makes selections for $20bn greenhouse gas reduction fund

The EPA announced its selections for $20bn in grant awards under two competitions within the $27 billion Greenhouse Gas Reduction Fund, established by the Inflation Reduction Act.

The U.S. Environmental Protection Agency has announced its selections for $20bn in grant awards under two competitions within the $27 billion Greenhouse Gas Reduction Fund (GGRF), which was created under the Inflation Reduction Act as part of President Biden’s Investing in America agenda, according to a news release.

The three selections under the $14bn National Clean Investment Fund and five selections under the $6bn Clean Communities Investment Accelerator will create a national clean financing network for clean energy and climate solutions across sectors, ensuring communities have access to the capital they need to participate in and benefit from a cleaner, more sustainable economy.

By financing tens of thousands of projects, this national clean financing network will mobilize private capital to reduce climate and air pollution while also reducing energy costs, improving public health, and creating good-paying clean energy jobs in communities across the country, especially in low-income and disadvantaged communities.

National Clean Investment Fund (NCIF) Selectees

Under the $14 billion National Clean Investment Fund, the three selected applicants will establish national clean financing institutions that deliver accessible, affordable financing for clean technology projects nationwide, partnering with private-sector investors, developers, community organizations, and others to deploy projects, mobilize private capital at scale, and enable millions of Americans to benefit from the program through energy bill savings, cleaner air, job creation, and more. Additional details on each of the three selected applicants, including the narrative proposals that were submitted to EPA as part of the application process, can be found on EPA’s Greenhouse Gas Reduction Fund NCIF website.

All three selected applicants surpassed the program requirement of dedicating a minimum of 40% of capital to low-income and disadvantaged communities. The three selected applicants are:

  • Climate United Fund ($6.97 billion award), a nonprofit formed by Calvert Impact to partner with two U.S. Treasury-certified Community Development Financial Institutions (CDFIs), Self-Help Ventures Fund and Community Preservation Corporation. Together, these three nonprofit financial institutions bring a decades-long track record of successfully raising and deploying $30 billion in capital with a focus on low-income and disadvantaged communities. Climate United Fund’s program will focus on investing in harder-to-reach market segments like consumers, small businesses, small farms, community facilities, and schools—with at least 60% of its investments in low-income and disadvantaged communities, 20% in rural communities, and 10% in Tribal communities.
  • Coalition for Green Capital ($5 billion award), a nonprofit with almost 15 years of experience helping establish and work with dozens of state, local, and nonprofit green banks that have already catalyzed $20 billion into qualified projects—and that have a pipeline of $30 billion of demand for green bank capital that could be coupled with more than twice that in private investment. The Coalition for Green Capital’s program will have particular emphasis on public-private investing and will leverage the existing and growing national network of green banks as a key distribution channel for investment—with at least 50% of investments in low-income and disadvantaged communities.
  • Power Forward Communities ($2 billion award), a nonprofit coalition formed by five of the country’s most trusted housing, climate, and community investment groups that is dedicated to decarbonizing and transforming American housing to save homeowners and renters money, reinvest in communities, and tackle the climate crisis. The coalition members—Enterprise Community Partners, LISC (Local Initiatives Support Corporation), Rewiring America, Habitat for Humanity, and United Way—will draw on their decades of experience, which includes deploying over $100 billion in community-based initiatives and investments, to build and lead a national financing program providing customized and affordable solutions for single-family and multi-family housing owners and developers—with at least 75% of investments in low-income and disadvantaged communities.

Clean Communities Investment Accelerator (CCIA) Selectees

Under the $6 billion Clean Communities Investment Accelerator, the five selected applicants will establish hubs that provide funding and technical assistance to community lenders working in low-income and disadvantaged communities, providing an immediate pathway to deploy projects in those communities while also building capacity of hundreds of community lenders to finance projects for years. Each of the selectees will provide capitalization funding (typically up to $10 million per community lender), technical assistance subawards (typically up to $1 million per community lender), and technical assistance services so that community lenders can provide financial assistance to deploy distributed energy, net-zero buildings, and zero-emissions transportation projects where they are needed most. 100% of capital under the CCIA is dedicated to low-income and disadvantaged communities. Additional details on each of the five selected applicants, including the narrative proposals that were submitted to EPA as part of the application process, can be found on EPA’s Greenhouse Gas Reduction Fund CCIA website.

The five selected applicants are:

  • Opportunity Finance Network ($2.29 billion award), a ~40-year-old nonprofit CDFI Intermediary that provides capital and capacity building for a national network of 400+ community lenders—predominantly U.S. Treasury-certified CDFI Loan Funds—which collectively hold $42 billion in assets and serve all 50 states, the District of Columbia, and several U.S. territories.
  • Inclusiv ($1.87 billion award), a ~50-year-old nonprofit CDFI Intermediary that provides capital and capacity building for a national network of 900+ mission-driven, regulated credit unions—which include CDFIs and financial cooperativas in Puerto Rico—that collectively manage $330 billion in assets and serve 23 million individuals across the country.
  • Justice Climate Fund ($940 million award), a purpose-built nonprofit supported by an existing ecosystem of coalition members, a national network of more than 1,200 community lenders, and ImpactAssets—an experienced nonprofit with $3 billion under management—to provide responsible, clean energy-focused capital and capacity building to community lenders across the country.
  • Appalachian Community Capital ($500 million award), a nonprofit CDFI with a decade of experience working with community lenders in Appalachian communities, which is launching the Green Bank for Rural America to deliver clean capital and capacity building assistance to hundreds of community lenders working in coal, energy, underserved rural, and Tribal communities across the United States.
  • Native CDFI Network ($400 million award), a nonprofit that serves as national voice and advocate for the 60+ U.S. Treasury-certified Native CDFIs, which have a presence in 27 states across rural reservation communities as well as urban communities and have a mission to address capital access challenges in Native communities.
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Carbon-negative materials firm in $40m equity raise

A Texas-based manufacturer of renewable plastics is developing its first plant in the Midwest, with a commercialization date set for 2026.

Citroniq Chemicals, a maker of renewable and carbon-negative plastics, is undergoing a $40m equity raise, according to two sources familiar with the matter.

The process has launched and is being led by Young America Capital, the sources said. The company’s projects account for about $1bn in CapEx.

Based in Houston, Citroniq uses bio-based feedstocks to produce plastics at scale. The company recently signed a Letter of Intent with Lummus Technology for the development of Citroniq’s green polypropylene projects in North America.

“With a projected investment of over $5bn and a combined polypropylene annual capacity of over 3.5 billion pounds, Citroniq is prepared to execute a rapid expansion plan of its E2O process, to meet the market’s growing need for sustainable, carbon negative polypropylene at a competitive price,” Mel Badheka, Principal and Co-Founder of Citroniq Chemicals, said in a press release announcing the LOI. “Located in the Midwest, Citroniq’s first plant is scheduled to start production in 2026 and provide identical, drop-in products that can be directly certified as biogenic through physical testing.”

In January Citroniq announced a separate LOI with Mitsui Plastics for a large-scale supply agreement for sustainable polypropylene.

Citronia and Young America Capital did not respond to requests for comment.

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Carbon credit project developer planning equity raise

A Texas-based carbon credit firm is preparing to sell credits from its first project in the US southeast and planning its first equity raise in 2024.

Sky Harvest Carbon, the Dallas-based carbon credit project developer, is preparing to sell credits from its first project, roughly 30,000 acres of forest in the southeastern US, while looking toward its first equity raise in 2024, CEO and founder Will Clayton said in an interview.

In late 2024 the company will seek to raise between $5m and $10m in topco equity, depending on the outcome of grant applications, Clayton said. The company is represented by Scott Douglass & McConnico in Austin, Texas and does not have a relationship with a financial advisor.

Sky Harvest considers itself a project developer, using existing liquidity to pay landowners on the backend for timber rights, then selling credits based on the volume and age of the trees for $20 to $50 per credit (standardized as 1 mtpy of carbon).

The company will sell some 45,000 credits from its pilot project — comprised of acreage across Virginia, North Carolina, Louisiana and Mississippi – in 2024, Clayton said. The project involves 20 landowners.

Clayton, formerly chief of staff at North Carolina-based renewables and P2X developer Strata Clean Energy, owns a controlling stake in Sky Harvest Carbon. He said he’s self-funded operations to date, in part with private debt. The company is also applying for a multi-million-dollar grant based on working with small and underrepresented landowners.

“There’s a wall of demand… that’s coming against a supply constraint,” Clayton said of companies wanting to buy credits to meet carbon reduction goals.

Sky Harvest would be interested in working with companies wanting to secure supply or credits before price spikes, or investors wanting to acquire the credits as an asset prior to price spikes, Clayton said.

“Anybody who wants to go long on carbon, either as an investment thesis or for the climate benefits to offset operational footprint, it’s a great way to do it by locking supply at a low cost,” he said.

A novel approach to credit definition

Carbon credits on the open market vary widely in verifications standards and price; they can cost anywhere from $1 to $2,000.

“There’s a long process for all the measurements and verifications,” Clayton said.

There are many forestry carbon developers paying landowners for environmental benefits and selling those credits. Where Sky Harvest is unique is its attempt to redefine the carbon credit, Clayton said.

The typical definition of 1 mtpy of CO2 is problematic, as it does not gauge for duration of storage, he said. Carbon emitted into the atmosphere can stay there indefinitely.

“If you’re storing carbon for 10, 20, 30 years, the scales don’t balance,” Clayton said. “That equation breaks and it’s not truly an offset.”

Sky Harvest is quantifying the value of carbon over time by equating volume with duration, Clayton said.

“If you have one ton of carbon dioxide going into the atmosphere forever on one side of the scale, you need multiple tons of carbon dioxide stored on the other side of the scale if it’s for any time period other than forever,” he said, noting that credit providers often cannot guarantee that the protected trees will never be harvested. Sky Harvest inputs more than 1 ton per credit, measured in periods of five years guaranteed storage at a time. “We compensate for the fact that it’s not going to be stored there forever.”

Monitoring protected land is expensive and often difficult to sustain. Carbon markets work much like conservation easements, but those easements often lose effect over time as oversight diminishes (typically because of staffing or funding shortages at the often nonprofit groups charged with monitoring).

“That doesn’t work in any other industry with real physical commodities,” Clayton said. “The way every other industry works is you pay a fund delivery. That’s our measure-as-you-go approach.”

A similar methodology has been put forward by the United Nations and has been adopted in Quebec, Clayton said.

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Exclusive: Liquid hydrogen at room temp: Tech firm raising money to scale

A provider of liquid organic hydrogen carrier technology is finishing a second seed round with designs on a Series A next year. The technology allows hydrogen to be transported as a liquid at room temperature.

Ayrton Energy, the Calgary-based provider of liquid organic hydrogen carrier storage technology, is preparing to launching a second seed round and plans a $30m Series A next year, CEO Natasha Kostenuk told ReSource.

Ayrton, with 10 employees, allows hydrogen to be transported as a liquid at room temperature, Kostenuk said. The liquid can also be transported in existing infrastructure while mitigating pipeline corrosion.

The company’s target customers are hydrogen producers, utilities and hub-and-spoke logistical servicers.

To date Ayrton has raised $5m from venture capital and a similar amount will come from the next seed round, Kostenuk said. A 30 kg per day pilot project with a gas utility in Canada is underway and Ayrton will look to 10x that next year, she said, with eyes on 3 metric tonnes per day commercialization.

“It scales like electrolyzers,” she said of the technology. “We can get very large, very easily.”

Ayrton is now engaging investors and potential advisors, Kostenuk said. “It would be good to engage with us now.”

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