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Clean fuels tech firm opens Ohio SAF reactor facility

The facility has the capacity to produce enough reactor cores each year to support the operation of a single commercial-scale SAF biorefinery.

Velocys, a sustainable fuels technology company, has opened its new 52,500 sq. ft technology facility in Plain City, Ohio that will house the reactor core assembly and catalysis operations which form a critical part of the production process for sustainable aviation fuel.

The company said in an investor update that the new site enables the consolidation of Velocys’ catalysis services, microchannel reactor core assembly and technology licensing under one roof. The building’s construction began in mid-2022 and was finished by the end of the year with fit out completed over the Winter.

Following the completion of an Enterprise Zone agreement signed with Union County and Jerome Township, Ohio for a package of investment incentives and a grant received from JobsOhio, Velocys has already hired a number of senior personnel.

The company is currently occupying the space with 20 employees and installing equipment which is expected to be fully commissioned for production from mid-2024. Eventually the facility will house approximately 35 employees when in full production.

The new site has the capacity to produce approximately 48 cores per year, enough to support 12 reactors which is the typical requirement for the operation of a single commercial scale SAF biorefinery, with a capacity to convert approximately 1TWh per year of energy.

It is expected that the facility will have sufficient production capacity to meet projected orders until 2028, including those from Velocys’ two biorefinery reference projects – Bayou Fuels, Mississippi and Altalto, Immingham, UK.

As part of a 15 year lease agreement, Velocys contributed $2m towards the construction with the remaining $8m being contributed by the developer, Warner Industrial Corporate Centers 2 LLC, a subsidiary of Ohio-based developer, The Pagura Company.

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BayoTech appoints CFO

BayoTech has appointed Brian Kellar as chief financial officer.

BayoTech, a provider of hydrogen production and transportation solutions, has appointed Brian Kellar as its new chief financial officer.

Before joining BayoTech, Brian Kellar served as CFO at Northwind Midstream Partners, where he played a crucial role in the company’s formation and strategic financial planning, according to a news release. His leadership at EVX Midstream saw the company’s growth from a startup to the dominant player in the South Texas saltwater disposal landscape.

In his role as CFO, Mr. Kellar will direct BayoTech’s financial strategy and operations, focusing on enhancing financial performance and aligning closely with the company’s strategic goals. His leadership is pivotal in fortifying BayoTech’s financial foundation and supporting its mission to establish a network of localized hydrogen production hubs throughout the United States.

Kellar steps into his new role following Jeff Wood. BayoTech expresses its gratitude to Mr. Wood for his contributions and wishes him the best in his future endeavors.

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Vertex Energy sells used motor oil refinery in pivot to energy transition

Vertex Energy sold an Ohio used motor oil refinery for $90m, and will invest further in renewable diesel and potential sustainable aviation fuel opportunities.

Vertex Energy, a specialty refiner and marketer of high-quality refined products, has sold its Heartland used motor oil collection and recycling business to a wholly owned subsidiary of GFL Environmental for total cash consideration of $90m.

Under the terms of the transaction, GFL acquired Vertex’s 20 million gallon per year Heartland used motor oil (UMO) refinery in Ohio and the associated Heartland UMO collections business, according to a news release.

After fees, total net cash proceeds from the transaction are approximately $85m. The company may use some of the transaction proceeds to reduce outstanding debt on its balance sheet.

Houlihan Lokey served as financial advisor to Vertex, and Stroock & Stroock & Lavan LLP served as legal counsel to Vertex for the transaction.

The transaction positions Vertex to redeploy capital into energy transition assets of scale. Vertex continues to examine potential investment opportunities across the sustainable fuels sector, including further development of its renewable diesel production business, as well as potential new opportunities in the rapidly growing Sustainable Aviation Fuel (SAF) market. Management believes the transition to the production of lower-carbon, sustainable fuels and products represents an attractive investment opportunity that positions the Company to achieve meaningful growth in Adjusted EBITDA and free cash flow long-term.

Vertex believes the resulting streamlined asset footprint will enable further operational focus and enhanced efficiencies throughout the company, according to the press release. The improved operational focus on the Mobile refining facility comes almost concurrently with anticipated mechanical completion and subsequent start-up of initial renewable diesel production which is currently expected to be completed in the second quarter 2023.

“We believe that the divestiture of our used motor oil business at Heartland, while a significant element of our company’s history and roots, will reflect another step forward in the greater transformation of our business into an energy transition story of scale. We expect that this transaction will serve us well by enabling the improvement of our balance sheet health, while adding strategic value through the streamlining of our operations. We remain highly focused on the execution of our conventional fuels refining strategy and the development of a large-scale, sustainable fuels production business longer-term. Make no mistake, we are committed to our remaining legacy business, coupled with our new investments in the Mobile refinery and the Gulf Coast, a key pathway to our greater energy transition strategy,” stated Benjamin P. Cowart, president and CEO of Vertex.

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Clean Seas investing $50m in Arizona plastic-to-hydrogen project

The subsidiary of the Clean Vision Corporation is working to secure “stages of necessary capital” for the project in Phoenix.

Clean-Seas, Inc. has signed an MOU with the Rob and Melani Walton Sustainability Solutions Service to establish a plastic waste to hydrogen facility in Phoenix, Arizona, according to a press release.

Clean-Seas Arizona, a subsidiary of the Clean Vision Corporation, intends to invest at least $50m in the project. The company will “work towards securing the various stages of necessary capital to finance the innovative facility in phases,’ the release states.

Clean-Seas Arizona will source waste plastic feedstock from the Phoenix metro area for a global network of clean hydrogen hubs and recycle it into AquaH, Clean-Seas’ brand of hydrogen.

RMWSSS, an institute at Arizona State University, will provide scholarly, technical, and sustainability advisory services.

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Exclusive: Australian fuels producer looking for US development partners

An Australian fuels producer and concentrated solar power developer partnered with German and US fossil interests is developing its first US clean fuels project in Texas, and is looking for development partners with eyes on the greater southwest.

Vast Energy, the Australia-based and NASDAQ-listed concentrated solar power (CSP) developer and fuels producer, is in the early stages of developing a project near El Paso, Texas – the company’s first in the US – and is seeking US development partners to generate a pipeline of projects throughout the country, CEO Craig Wood said in an interview.

Vast is in process with two projects in Port Augusta, South Australia: VS1, a 30 MW solar/8 MWh storage plant, and SM1, a demonstration solar-to-methanol plant co-located with VS1, producing up to 7,500 mtpa of green methanol from VS1 electricity and heat with extra power available on the grid.

VS1 is scheduled for FID in 3Q24 with FID on SM1 coming the following quarter, Wood said.

Vast recently announced funding agreements with German partner Mabanaft for up to AUD $40m for SM1, after the SM1 project was selected last year as a part of the German-Australian Hydrogen Innovation and Technology Incubator (HyGATE).

Methanol from the $80m SM1 will in part be exported to Germany. Vast is also working with EDF to provide additional financing, Wood said.

“Essentially it’s going to be debt free and on balance sheet,” Wood said.

German container shipping company Hapag-Lloyd recently signed an MOU with Mabanaft to explore options for the supply of ammonia as bunker fuel to Hapag-Lloyd in the Port of Houston.

US opportunity

In the US, where Vast listed to be primed for opportunistic growth, the company has a shortlist of locations around El Paso, has engaged with regional economic development leaders, and held early talks with EPC providers, Wood said.

The El Paso project is being developed in conjunction with Houston-based oil and gas drilling business Nabors Industries, Wood said. Nabors backed the SPAC that took Vast public at a valuation of up to $586m in early 2023. Its current market cap is $64m.

There are ongoing discussions on whether to produce eSAF or methanol in El Paso, Wood said.

To produce eSAF, Vast would use a solid-oxide electrolyzer coupled with the Fischer-Tropsch process, Wood said. Meanwhile, the methanol distillation process lends itself well to Vast’s ability to produce low-cost heat.

CSP has a lower level of embedded carbon than any renewables technology other than wind, Wood said.

“The work that we have done to date indicated that you would most likely power an eFuels project with a CSP plant that was configured to operate in the day and night,” Wood said.

As for project costs, envisioning a project producing some 200 million liters per annum, roughly $3bn would be needed for the power station, and then half that for the infrastructure to make the fuels.

Preliminary offtake for the El Paso project is going to be critical for attracting investment, Wood said. Offtake will depend on the type of fuel produced, though conversations are ongoing with shipping companies (methanol) and airlines (eSAF).

“We’re not expecting to have any problem placing the product,” Wood said. Offtake would likely be targeted for the Port of Los Angeles, LAX airport, the ports of the Gulf Coast, or Dallas Fort Worth International Airport.

Development of CSP makes sense anywhere climate is sunny and hot, Wood said. The company could logically expand into more of West Texas, New Mexico, Arizona and southern California.

The region around Farmington, New Mexico is particularly attractive for CSP development, Wood said. As a huge amount of coal-fired capacity in that area is retired, those interconnections, workforces and resources are ripe for repowering.

The turbines that one of those coal fired power stations would have is the same turbine at the core of Vast’s technology, Wood said. One difference is that Vast’s can be turned on and off quickly.

Development partnerships 

There is an opportunity for Vast to find a development partner, or partners, to stand up a pipeline of projects in two to three years’ time, Wood said.

“Almost everyone wants to wait until our project in Port Augusta reaches COD,” Wood said. “But we don’t want to wait that long to be developing projects in the US.”

Vast is capable of building CSP plants, which can be configured to operate in the day and night, co-located with existing larger-scale solar pv to provide additional generation and, critically, storage, Wood said. By directing sunlight to receivers and heating molten salt, CSP can store energy for 12-to-20 hours overnight to alleviate solar pv’s intermittency issues.

“Coming along and essentially retrofitting complementary CSP next to those [pv plants], we think is a very sensible way to go, both in terms of shared cost but also in terms of managing incremental transmission build,” Wood said. “We’re looking for people we can have conversations with.”

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Exclusive: Biomethane firm planning funding round

A biomethane solutions provider with projects in Europe and the US is planning a fifth round of funding to launch early next year, with a need to raise additional project debt.

Electrochaea, the US- and Europe-based biomethane developer, will go to market in 1Q24 for a new round of equity funding, with a near term need for project debt as well, two executives told ReSource.

The company, which was spun out from an incubator at The University of Chicago with offices in Denmark, has projects in Denmark, Colorado, New York and Switzerland. It is backed by Baker Hughes and, from early fundraising efforts, Munich Venture Partners, senior director Aafko Scheringa said. The former investor participated in its most recent (fourth) $40m funding round.

Electrochaea uses a patented biocatalyst that converts green hydrogen and carbon dioxide into BioCat Methane, a pipeline-grade renewable gas.

The average size of a project is roughly $25m, Scheringa said.

Funds from the next round will provide three years of working capital, CEO Mitch Hein added.

Electrochaea has not worked with a financial advisor to date, Hein said, adding that he may have need for one for new processes but has not engaged with anyone.

Scheringa said he is working to achieve commercialization on a pipeline of projects, with a 10 MWe bio-methanation plant in Denmark being farthest along with a mandatory start date before 2026.

Electrochaea has a bio-methanation reactor system in partnership with SoCalGas at the US Department of Energy’s National Renewable Energy Laboratory (NREL) Energy System Integration Facility in Golden, Colorado, though Hein said a project in New York is as advanced in its development.

Bio-methane can be burned in place of natural gas with no systems degradation issues, so gas offtakers are a natural fit for Electrochaea, Scheringa said. Cheap clean electricity paired with available CO2 is critical, so the company will look to places like Texas, Spain, Scandinavia, Quebec and the “corn states” of the US Midwest, for new projects.

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Exclusive: US-Ukraine battery storage firm in seed round

A US-based battery storage technology firm with operations in Ukraine and a utility-offtake pilot project in the southwestern US is in the early stages of finding institutional investors in the US and Europe.

SorbiForce, an Arizona-based battery storage technology firm, is raising $4.7m in seed funding with ambitions to find strategic investors for larger fundraising efforts in the next year, CEO Serhii Kaminskyi said in an interview.

The company, which was founded in western Ukraine and still has R&D operations there, aims to finish the seed round in five months, Kaminskyi said. Currently the US operations are housed at the University of Arizona Center for Innovation.

The batteries the company designs use little metal compared to other battery pack systems, instead using organic matter that can ultimately be biodegraded. The packs are filled with “ultra porous carbon materials” capable of storing up to 0.7 MWh.

SorbiForce is assisted by Orrick, Herrington & Sutcliff and Squire Patton Boggs as legal counsels, Kaminskyi said.

The seed round is for a 1 MW pilot project near Tucson, Arizona. That project has offtake contracted with Tucson Electric Power, Kaminskyi said. The B2B business model will be to sell batteries to customers in power generation, industrials, municipalities, and EV charging.

Kaminskyi, speaking from southern Italy, said the company is testing batteries in that country and has had discussions with offtakers in Germany, including automakers. The company has signed an agreement with a European energy company, he said, declining to name which.

The early-stage company is too-early for many financial investors, Kaminskyi said, and is looking for institutional investors with downstream need for battery storage.

“We’ve already received money from customers,” Kaminskyi said.

Russia’s invasion of Ukraine has put strain on the company, particularly concerning the families of the company’s founding employees, Kaminskyi said. The facilities in Ukraine are safe, but he is in process of moving those facilities to Arizona.

Kaminskyi owns 56% of the company, with additional equity held by the founding scientific team and US employees, he said.

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