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Conestoga and SAFFiRE agree SAF partnership

The cellulosic ethanol from a SAFFiRE pilot project and potential future commercial facilities is planned to be upgraded to ultra-low CI sustainable aviation fuel.

Conestoga Energy and SAFFiRE Renewables announced today their agreement for Conestoga to host SAFFiRE’s cellulosic ethanol pilot plant at Conestoga’s Arkalon Energy ethanol facility in Liberal, Kansas, according to a news release.

The SAFFiRE pilot project aims to validate and demonstrate the commercialization of SAFFiRE’s corn-stover-to-ethanol technology in a fully integrated pilot facility that processes 10 tons of corn stover per day. Both Conestoga and SAFFiRE are focused on producing ultra-low carbon intensity (CI) ethanol for use in renewable fuels, making this a synergistic relationship.

The cellulosic ethanol from the SAFFiRE pilot project and potential future commercial facilities is planned to be upgraded to ultra-low CI sustainable aviation fuel (SAF) in support of the aviation industry’s decarbonization efforts. SAF is fuel produced from non-fossil fuel sources that can result in lower greenhouse gas (GHG) emissions than conventional jet fuel on a lifecycle basis. SAF is a drop-in fuel when blended with conventional jet fuel and is crucial to decarbonizing aviation.

SAF’s lower carbon intensity makes it an important part of reducing aviation GHG emissions, which make up 9%–12% of U.S. transportation GHG emissions, according to the U.S. Environmental Protection Agency.

“Conestoga is excited to work with SAFFiRE Renewables on this transformative opportunity.  This agreement ties in well with Conestoga’s rich history of providing carbon reducing and net zero solutions in the bioethanol space,” said Tom Willis, CEO of Conestoga Energy. “In order to reach stated net zero carbon emission goals by 2050, the aviation industry will have to embrace SAF. SAFFiRE cellulosic ethanol technology is planned to produce ethanol that can be upgraded to SAF that can be cost-competitive with traditional fossil-based jet fuel. Conestoga is proud to be a part this next big step for both the Ethanol and Aviation industries.”

“A tremendous amount of engineering and site design work has been completed and we’re confident that this pilot plant will be the first step toward scaling and commercializing the conversion of corn stover to cellulosic ethanol, which SAFFiRE plans to convert to sustainable aviation fuel through the alcohol-to-jet pathway,” said Tom Nealon, CEO of SAFFiRE Renewables. “This is good for the corn growers, it’s good for ethanol producers, and it’s good for the host communities and the aviation industry. Our pilot plant site selection process was rigorous, and Conestoga exceeded all of our requirements and continues to demonstrate that they are an outstanding partner.”.

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Technology in focus: What is direct ocean capture and can it sail?

Bianca Giacobone explores the not-yet-seagoing technologies behind direct ocean capture, and the emerging players seeking to make it a reality.

The largest carbon capture system in the world is the ocean, sucking in about 31% of CO2 emissions from the atmosphere, which makes it “the world’s greatest ally against climate change.” As a matter of fact, it sucks in so much CO2 that it’s becoming too acidic, endangering its ecosystems along the way. 

In the ongoing frenzy to find as many pathways to reverse climate change as possible, scientists and developers are looking to take full advantage of the ocean’s natural carbon sink qualities, while hopefully restoring it to its original, less-acidic state. Direct ocean capture (DOC) removes CO2 from seawater directly, through electrochemical-based methods or calcium looping.

It still hasn’t been deployed on a large scale, but it’s catching the eye of investors, despite not having been blessed by federal subsidies like its sister technology, direct air capture (DAC).

Los Angeles-based Captura, for example, recently announced it has raised over $30m in a Series A funding round from backers like Maersk Growth and Eni Next, while Deep Sky, a Canadian carbon removal developer with partnerships with both Captura and its competitor Equatic, raised CAD 75m ($55.6m) late last year. 

Much like direct air capture, DOC holds a big advantage in that there’s plenty of CO2 and seawater to go around, making it, theoretically, endlessly scalable. 

But “in many ways, from an engineering standpoint, direct ocean capture seems a better approach to carbon removal, because the medium seawater contains more carbon molecules per unit than air,” David Babson, executive director of the MIT Climate Grand Challenge Initiative, said in an interview. Plus, it can be 100% powered by renewable electricity, whereas direct air capture still requires some heat. 

Not that pursuing one denies the other. 

“We got into this mess of climate change by taking carbon out from underground and putting it into the air and therefore into the ocean,” Phil De Luna, chief carbon scientist and head of engineering at Deep Sky, said in an interview. “In order to reverse that, we have to take CO2 out of both the air and the ocean and put it back underground.”

Deep Sky, according to De Luna, is “an oil and gas company in reverse,” and much like an oil company, it doesn’t develop its technologies, but rather invests in what’s already been brewing, offering partners money, solutions, and potentially a place to store the CO2 once they have it. 

Courtesy of Deep Sky.

Deep Sky looks for four things when selecting a technology to invest in: it has to be fully electrified and easily scalable, and it has to have low energy intensity and a robust and uncomplicated supply chain. DOC is on its way to tick all those boxes and it should be ready for commercial deployment within a decade, according to Babson and De Luna. 

Equatic, one of the companies Deep Sky has partnered with, has two pilot facilities active in Los Angeles and Singapore and is going to announce a larger plant, estimated to remove around 4,000 tons of CO2 per year, in the near future, according to Edward Sanders, Equatic’s chief operating officer. 

Its technology is based on modules the size of 20ft shipping containers, which, placed on the coast and powered by renewable energy, pump in large amounts of seawater, pass an electrical current through it, and then trap the extracted CO2 in solid minerals. 

The modules are replicable, “like solar cell modules,” according to Sanders, an attractive feature for investors, and the CO2 removal happens within their boundaries, which means you can measure and report how much of it you’ve captured. That’s important for figuring out how many carbon credits to sell – since, as it stands, selling carbon credits is the basis of most of these companies’ revenue models.

As a new technology, DOC is expensive and needs to become cheaper to be deployed at a relevant scale. But unlike direct air capture, it cannot, currently, claim tax credits for carbon sequestration both in the United States and Canada. 

The lack of DOC-related subsidies is not an issue for Equatic, which, in addition to removing CO2 from the ocean, also produces around 30 kilograms of green hydrogen per module per day, and is therefore eligible for hydrogen tax credits. Captura, on the other hand, is investing in modules to prove that DOC is, essentially, direct air capture, since “you’re using the surface of the water to capture CO2 from the air, and you’re using this process to remove the CO2 from the water,” according to Babson at MIT. 

Captura declined an interview and did not respond to a request for comment.  

“It’s certainly one of the flaws in the Inflation Reduction Act that it has constraining language around direct air capture specifically, saying that direct air capture gets the credit and nothing else,” Babson said. “That runs afoul of policy 101. It limits the possibilities.” 

The next step is convincing the authorities in charge to include DOC in the technologies eligible for subsidies, which is bound to take some time. 

“Unfortunately,” Babson said, “when it comes to climate change and carbon removal and scaling an enormous negative emissions industry, we just don’t have time.”

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Sumitomo and Hoegh Autoliners studying ammonia bunkering

The parties have signed an LOI to study the supply of clean ammonia as a bunker fuel at the ports of Singapore and Jacksonville, USA from 2027 onwards.

Sumitomo Corporation and Höegh Autoliners have signed a Letter of Intent to collaborate on the supply and delivery of clean ammonia as a next-generation sustainable maritime fuel for Höegh Autoliners’ upcoming Aurora Class PCTC vessels.

The twelve state-of-the-art vessels are set to become the largest and most eco-friendly car carriers ever built, with the capability to run on zero-carbon ammonia or carbon-neutral methanol, according to a news release.

Under the agreement, the parties will look into the supply of clean ammonia as a bunker fuel at the ports of Singapore and Jacksonville, USA from 2027 onwards.

Moving forward, the companies will embark on a comprehensive evaluation of the compatibility between the PCTC vessels and the ammonia bunkering facilities at the identified bunker ports. They endeavor to make necessary adjustments to specifications for both “shore-to-ship” and “ship-to-ship” bunkering operations and undertake safety assessments to establish standardized operational protocols and regulations in close coordination with pertinent government agencies.

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SK invests in World Energy GH2 green hydrogen project

South Korea’s SK ecoplant has agreed to make an initial investment of $50m to acquire a 20% stake in the first phase of World Energy GH2’s green hydrogen project in Atlantic Canada.

World Energy GH2 has signed an investment agreement with SK ecoplant, the environment and energy arm of SK Group, one of the world’s largest sustainable infrastructure companies. SK Group operates more than 200 companies across the energy, life sciences, advanced materials, mobility, and semiconductor industries.

The agreement signifies the first overseas investment in a Canadian green hydrogen project. SK ecoplant is initially investing $50m in Project Nujio’qonik, acquiring a 20 per cent stake in the first phase of the project. This investment is SK ecoplant’s first investment in a wind-to-green hydrogen project globally, and is a clear indicator that Newfoundland and Labrador is rapidly taking centre stage in the clean energy industry.

John Risley, chairman, World Energy GH2, commented that the investment is validation that World Energy GH2 has all of the requirements for a successful project.

“Just nine months after the signing of the Canada – Germany Hydrogen Alliance by Canadian Prime Minister Trudeau and German Chancellor Scholz in Stephenville, Newfoundland and Labrador, trade and export discussions continue to advance between Canada and Germany. This investment from SK ecoplant reflects confidence in the alliance, and also reflects the speed at which this new critical industry is moving.”

“Canada is creating a financial climate that is attracting investments of scale,” said Risley. “Our country’s robust response to the US Inflation Reduction Act, including the Canada Growth Fund, Investment Tax Credits and Contracts for Difference, are innovative ways Canada is implementing to stand up an industry that can compete globally.”

Sean Leet, Managing Director and CEO, World Energy GH2, commented further: “This is an international company that can do business anywhere in the world,” said Leet. “Not only did they choose Canada, they chose our home, Newfoundland and Labrador, and they chose Project Nujio’qonik. SK ecoplant recognizes the benefits, advancement, and sophistication of this project, and we look forward to a prosperous partnership.”

“We are incredibly proud of all of our stakeholders, including our First Nations and community partners, who have been instrumental in attracting SK ecoplant’s investment in our project,” said Leet. “We welcome our new investment partners to Project Nujio’qonik, and we look forward to developing a world-class green energy project together.”

SK ecoplant will continue to be an important partner in this project, thanks to its expertise in green hydrogen and engineering excellence. The company has already completed a green hydrogen value chain that includes renewable energy sources such as wind power and electrolysis. SK ecoplant has established itself as a leading company in wind power generation, evidenced by its ongoing development of a 2.6 GW offshore wind power project. Its subsidiary, SK oceanplant, is a globally recognized top-tier company specializing in substructures for offshore wind power installation. Last month, Kyung-il Park, CEO, SK ecoplant, assumed the role of Chairman of the Korea Wind Energy Industry Association.

Kyung-il Park, CEO, SK ecoplant, says the investment in Project Nujio’qonik is a step toward launching the international green hydrogen industry.

“Newfoundland and Labrador is positioned to launch this industry in Canada and to be amongst the very few first-mover commercial producers of scale world-wide,” said Kyung-il Park, CEO, SK ecoplant. “Project Nujio’qonik has world-class wind, abundant fresh water, a deep-sea port with close proximity to Europe, strong First Nations and community support, and support at all levels of government. Our investment in this project is a step toward producing first green hydrogen and ammonia in 2025 and taking a leadership position in the fight against climate change.”

“As the first Korean company to participate in an intercontinental green hydrogen commercialization project, we have a competitive advantage and see more future business opportunities,” said Kyung-il Park. “SK ecoplant’s rapid execution ability and extensive experience will help us become a prominent leader in the global green hydrogen and green ammonia market in the future.”

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Exclusive: Green hydrogen developer planning capital raises for distributed portfolio

A developer of US green hydrogen projects will need to access the project equity, debt and tax equity markets in the near term for a pipeline of distributed assets nationwide.

NovoHydrogen, the Colorado-based renewable hydrogen developer, will be in the market for project financing for a portfolio of distributed green hydrogen projects in 2024, CEO Matt McMonagle said.

The company, which recently agreed to a $20m capital raise with Modern Energy, is aiming to attract additional private equity and infrastructure investors for the projects it is developing, the executive said.

“The opportunity is really there for attractive risk-adjusted returns at the project level based on how we’re structuring these projects with long-term contracted revenue,” he said.

The company plans to bring its first projects online in late 2024 or 2025.

“We don’t have the project financing set at the point that we can announce, but that’s something myself and my team have done in our careers,” McMonagle said, adding that he’s focused on bankability since founding the company. “We wanted to be as easy for the lenders to underwrite as possible.”

No financial advisors have been attached to the project financings, McMonagle said. A recently announced Series A, first reported by ReSource in February, gave the company exposure to investors that want to participate in project financings, he said.

“We’ll really be ramping that process up, likely after the new year,” McMonagle added, declining to say how much the company would need to raise in 2024.

NovoHydrogen doesn’t have a timeline on a Series B, he said.

Distributed pipeline

The company looks to do onsite projects adjacent to consumption, McMonagle said. The first projects that will go online will be 10 MW and smaller.

“Typically the permitting is straightforward in that we’re adding equipment to an already impacted industrial site,” McMonagle said. He declined to elaborate on where these projects are located or what customers they will serve.

The company also has off-site, or near-site projects, where production is decoupled from consumption. But the company still calls those distributed because they are being developed with a targeted customer in mind.

“We want to be as close as possible to that customer,” he said. Those off-site projects typically are larger and will begin coming online in 2026 and 2027.  

In Texas NovoHydrogen has two large-scale green hydrogen developments in production, co-located with greenfield renewables projects, McMonagle said. Partners, including EPC, are in place for those efforts. The company also has projects in West Virginia, Pennsylvania, New Jersey and along the west coast.

“Where can we add the most value and have the biggest competitive advantage?” McMonagle said of the company’s geographic strategy. “We have very specific go-to-markets in each of those regions which we feel play to our strengths.”

NovoHydrogen is a member of the Pacific Northwest Hydrogen Hub and is involved with the Appalachian Regional Clean Hydrogen Hub (ARCH2), though not in line to receive DOE funding through that hub.

Post-IRA, green hydrogen projects will look much like renewables deals from the equity, tax equity and debt perspectives, he said.

“We’re structuring and setting up our projects to take advantage of that existing infrastructure and knowledge base of how to finance deals,” he said. New options on transferability will enable additional financing options as well.

No flipping

NovoHydrogen does not plan to flip projects before COD, McMonagle said.

“We are planning to deploy hundreds of millions if not billions of dollars in capex for these projects, and we’ll certainly need to partner with folks to deploy that capital,” McMonagle said. “But we will remain in deals with our customers because that relationship is really the fundamental value that we bring in our business.”

Hydrogen projects are different from renewables in that the customers need greater assurances of resiliency, security of supply and performance, than in a space like solar, he said.

Flipping projects before COD would be inconsistent with the trust required to attract offtakers.

“We don’t believe doing a flip reflects that level of importance and support and, frankly, incentive, behavioral incentive, that we have to show to our customers,” he said.

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EXCLUSIVE: 8 Rivers co-founder departs firm

A co-founder and executive has departed the North Carolina-based firm, which recently announced an ammonia project in Texas.

Bill Brown, a co-founder of the technology commercialization firm and clean fuels developer 8 Rivers Capital, has retired from the company, a spokesperson confirmed via email.
According to Brown’s LinkedIn profile, he is serving now as CEO of New Waters Capital. He co-founded 8 Rivers and also served as CEO and CTO in this nearly 16 years there.
Brown did not respond to a request for comment.
According to 8 Rivers’ website, Dharmesh Patel is serving as interim CEO. The company recently announced development of the Cormorant Clean Energy ammonia production facility in Port Arthur, Texas
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Exclusive: Hydrogen blank-check deal and capital raise on track

A de-SPAC deal and associated capital raise for a hydrogen technology and project development firm are still on track to close this year, despite this year’s busted SPAC deals and sagging hydrogen public market performance.

H2B2 Technologies is still on track to close a de-SPAC deal and related capital raise before the end of this year, CEO Pedro Pajares said in an interview.

Spain-based H2B2 announced the deal to be acquired by RMG Acquisition Corp. III and go public in a $750m SPAC deal in May. In tandem, Natixis Partners and BCW Securities are acting as co-private placement agents to H2B2 for a capital raise that the company must close as part of the acquisition.

The company said recently in filings that the deal as well as the capital raise would close before the end of 2023, a fact that Pajares reiterated in the interview. He declined to comment further.

Many publicly traded hydrogen companies have dropped significantly in value in recent months, and dropped further on Friday following news from Plug Power that it would need to raise additional capital in the next 12 months to avoid a liquidity crisis.

Meanwhile, there have been 55 busted SPAC deals this year, according to Bloomberg, with Ares Management’s deal for nuclear tech firm X-Energy the latest to not close.

Expansion

H2BE recently inaugurated SoHyCal, its first facility in Fresno, California, and wants to get the message out to offtakers in California’s Central Valley that it has hydrogen available to sell.

“What we want to show is that H2B2 is the solution for those who are seeking green hydrogen in the Central Valley,” Pajares said.

Phase 1 (one ton per day) of the plant was funded by a grant from the California Clean Energy Commission. Phase 2 (three tons per day) will involve transitioning to solar PV power, and the company could consider a project finance model to finance the expansion, though Pajares believes the market is not yet ready to finance hydrogen projects.

In addition to project development, the company is also an electrolyzer manufacturer. It is focusing its efforts in the California market on future projects that are larger than SoHyCal, as well as those related to individual offtakers, Pajares said. End users will be in mobility and fertilizer, with offtake occurring via long-term contracts as well as through spot market transactions.

The company is pursuing developments in other regions of the US as well, he added, declining to name specific areas.

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