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Don’t crack it

A report conducted by engineering consulting firm KBR found that importing ‘uncracked’ ammonia for potential use in Europe is among the cheapest ways to bring hydrogen to the continent from abroad.

The following is a summary of a new report from the Clean Air Task Force (CATF) that analyzes the costs of different methods for long-distance import of low-carbon ‘blue’ hydrogen to Europe, finding that the potential import of uncracked ammonia is among the cheapest ways to bring hydrogen to the continent.

The report, which is based on studies conducted by Houston-based engineering consultant KBR, considers pipeline transport of gaseous hydrogen from Algeria and Norway and maritime (ship) transport of either liquid hydrogen, ammonia, or a liquid organic hydrogen carrier (methylcyclohexane) from Norway, the Arabian Gulf region, and North and South America to Europe’s largest seaport, the Port of Rotterdam in the Netherlands.

Of the pathways for delivering hydrogen considered in the analysis, three options consistently ranked as most cost-effective across all supply chain volumes: gaseous hydrogen by pipeline from Norway and Algeria and ammonia via maritime shipping from the Arabian Gulf. Estimated cost per kilogram (or MWh) of delivered hydrogen is lower for these options than for all other geographies and transport options, including ship transport of liquid organic hydrogen carriers (such as methylcyclohexane) and liquid hydrogen.

For pipeline transport, Norway is the lowest-cost exporter at the smallest supply volume considered (250,000 tonnes hydrogen per year). At higher pipeline transport volumes, Algeria, because of its lower natural gas prices, is the lowest cost exporter.

Ammonia emerges

Among the maritime transport options considered, ammonia emerges as the lowest-cost carrier, regardless of export location, according to the study. The Arabian Gulf is the lowest-cost exporter, largely due to a combination of low natural gas prices, geographic proximity to Rotterdam, and competitive construction costs.

Ammonia is already one of the most widely used chemicals in the world—as a result, production methods are well-developed, storage and transport requirements are well understood, and extensive infrastructure for producing and distributing ammonia, including ships and terminals, already exists. Ammonia is also much less demanding than LH2 in terms of the temperature and pressure conditions required to keep it liquid — this means that it can be stored in common ‘Type C’ pressurized tanks and requires no specialized handling or equipment.

KBR assumed use of the Haber-Bosch process, which already accounts for most ammonia production in the world, to convert gaseous hydrogen and air to ammonia. This part of the value chain requires heat and electricity inputs, but the technologies and processes involved are mature.

By contrast the technologies needed to efficiently dehydrogenate (or ‘crack’) ammonia to liberate hydrogen once it reaches the import destination are still in relatively early stages of development. Present methods for cracking ammonia require significant energy inputs, the report notes.

“Import pathways that rely on the long-range transport of liquefied pure hydrogen or on a liquid organic hydrogen carrier that requires dehydrogenation to liberate pure hydrogen at the point of import should be avoided as they do not make sense from an energy, emissions, or economic standpoint,” the report says. “Capital requirements and levelized costs for these pathways are far higher (in some cases close to double) the costs for importing hydrogen in the form of uncracked ammonia.”

Further study

The CATF therefore recommends further study to identify what part of Europe’s expected hydrogen demand could be met by uncracked ammonia and additionally spur development of related technologies and infrastructure in applications where no more efficient or cost-effective decarbonization option exists.

Estimated costs for ammonia imports from locations in North and South America are on the order of 10%–15% higher than estimated costs for ammonia imports from the Arabian Gulf (the modeled cost differential ranges from $0.20 to $0.40 per kilogram of delivered hydrogen, or $6–$12 per MWh of delivered hydrogen, depending on overall import volume).

Across all supply chain volumes, importing hydrogen in the form of ammonia from the U.S. Gulf Coast consistently ranked as the fourth most cost-effective option in the study. The U.S. position could improve further as a result of widening natural gas price differentials between U.S. and European hubs and recently passed policy incentives in the United States, including a new federal tax credit for clean hydrogen production in the Inflation Reduction Act of 2022.

Importantly, the analysis was conducted before the passage of the Inflation Reduction Act, and therefore does not take into account the provisions for clean hydrogen production and carbon capture. The report does note, however, that the recently adopted U.S. tax policies, by reducing the cost of producing clean hydrogen in the United States, could also make the countty a more appealing supplier to future global markets for low-emissions hydrogen and ammonia.

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Oberon Fuels adds executives

The renewable fuels firm has added executives from Key Capture Energy and Chevron.

Oberon Fuels, a renewable fuels firm, has hired its first Chief Financial Officer Ann Anthony and new Chief Operating Officer Derek Winkel to drive the company’s growth.

Both Anthony and Winkel will play critical roles in growing the business as it scales up the commercializations of its renewable DME and methanol, the company said in a news release.

Along with additional senior leaders, Anthony and Winkel will help Oberon scale to decarbonize  the propane industry — which emits emissions equivalent to the commercial aviation market — while accelerating hydrogen infrastructure.

“Ann and Derek each bring invaluable experience to support Oberon Fuels on its journey to commercialization and deliver the full impact that renewable fuels can have on reducing carbon emissions,” said Oberon Fuels President & CEO Rebecca Boudreaux.

Anthony brings nearly 30 years of experience helping innovative energy companies scale and successfully introduced OPAL Fuels, a renewable natural gas company, to the public markets. Before OPAL Fuels, Anthony served as the chief financial officer and secretary for Key Capture Energy, a VC-backed start-up focused on stand-alone battery storage in key electricity markets, where she played an instrumental role in the company’s acquisition by SK E&S Co., Ltd. She was also responsible for leading the company’s finance and human resources function, including financial planning and analysis, corporate procurement and capitalization efforts.

Winkel has nearly two decades of experience leading and scaling operations for renewable energy innovators. He most recently served as the vice president of manufacturing development, commercial performance and services for Chevron following the company’s acquisition of Renewable Energy Group (REG) at a $3.15B valuation. Following the acquisition, Winkel played a pivotal role in the improvement and expansion of their renewable diesel production facility, which took total site production capacity from 90M gallons per year to 340M gallons per year.

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Featured

Chevron to study ammonia carriers with Greek shipper

The initial study will evaluate the ammonia transportation market, existing infrastructure, safety aspects, potential next generation vessel requirements and a preliminary system to transport ammonia between the U.S. Gulf Coast and Europe.

Chevron Corporation, through its subsidiary Chevron Shipping Company LLC, and the Angelicoussis Group, through its Energy Transition division, Green Ships, announced a Joint Study Agreement (JSA) to explore how tankers can be used to transport ammonia, a potential lower carbon marine fuel, according to a news release.

The initial study will evaluate the ammonia transportation market, existing infrastructure, the safety aspects of ammonia, potential next generation vessel requirements and a preliminary system to transport ammonia between the U.S. Gulf Coast and Europe. Future opportunities will focus on additional global markets.

Ammonia is a carrier of hydrogen and is believed to have potential to lower the carbon intensity of the marine industry. Through the JSA, the Angelicoussis Group and Chevron aim to advance ammonia’s technical and commercial feasibility at scale, particularly as an export for petrochemicals, power, and mobility markets.

“We are pleased to collaborate with the Angelicoussis Group on this study, help advance lower carbon energy at scale and progress marine transportation of ammonia,” said Mark Ross, president of Chevron Shipping Company. “I’m proud of the collaboration between Chevron Shipping, Chevron New Energies and the Angelicoussis Group and look forward to driving progress toward our energy transition goals.”

“Global value chain solutions are critical for growing the hydrogen market, and we believe shipping will play a crucial role. Chevron is leveraging its international functional marine expertise and collaborating with the Angelicoussis Group to pursue the delivery of lower carbon proof points to the market,” said Austin Knight, Vice President, Hydrogen, Chevron New Energies.

“Through collaborating with Chevron Shipping Company on this study, we aim to make a meaningful contribution to prepare our industries for the transition towards lower carbon operations,” said Maria Angelicoussis, CEO of the Angelicoussis Group. “Combining our many years of experience in seaborne transport of liquid and gaseous energy sources with Chevron’s vast experience in the energy business provides a solid basis for this endeavor.”

“Ammonia has potential as a hydrogen vector and is considered one of the alternative fuel options to decarbonize shipping. We believe this study will contribute towards identifying the technical, operational and commercial challenges of carrying ammonia at scale and using it as a fuel in a safe and sustainable way,” said Stelios Troulis, green Ships and energy transition director for the Angelicoussis Group.

Chevron and the Angelicoussis Group have a long-standing relationship dating back to 2000. Since then, the partnership has grown from conventional vessels to include multiple LNG carriers, as well as joint work on energy transition initiatives. The teaming of Chevron Shipping, Chevron New Energies and the Angelicoussis Group on this study supports and accelerates both organizations’ ambitions to become leading, global clean energy providers by focusing on all aspects of the hydrogen supply chain.

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Fitch lays out credit considerations for green hydrogen financing

Key operating metrics include the efficiency and rate of hydrogen production, plant availability, the ability to respond to intermittent power, and hydrogen purity levels.

Fitch Ratings has set out specific credit-risk considerations relevant to green hydrogen projects in a new report.

Fitch considers the credit risks of such projects to have the closest parallels to those of thermal power assets, and to generally be at least equal to – but potentially greater than – thermal power risks. Future technology and process developments will be evaluated and incorporated in ratings as the industry matures.

Whilst there are two key proven electrolyser technologies for producing hydrogen from renewable energy and water, the green hydrogen market is still nascent, meaning that precedents for project-financed transactions are very limited.

Green hydrogen projects have a greater range of balance of plant than solar, wind or thermal power projects. Complexity, and consequently integration risk, will therefore have a key influence on the completion risk assessment in any rating.

The availability of alternative replacement contractors to complete a project will be key for whether it can be rated above the incumbent contractor.The immaturity of the market will heighten the weight given to independent experts’ (IE) views in relation to such replaceability. We also generally expect high dependence on project parties, such as original equipment manufacturers, who will be key in O&M activities due to their expertise and equipment warranties.

The limited number of peer green hydrogen projects also means Fitch will be more reliant on the IE’s views of the reasonableness of a project’s budgeted or contracted operating costs. Any perceived lack of credibility, competence and experience of the project parties could be factored into the financial profile assessed in our ratings.

Key operating metrics include the efficiency, and rate, of hydrogen production, the plant availability, the ability to respond to intermittent power, and, where this is critical, the hydrogen purity levels.

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Exclusive: Modular green ammonia firm launches capital raise

A modular green ammonia firm has hired a boutique investment bank and has launched a roughly $150m capital raise.

Talus Renewables, a developer of modular green ammonia projects, has hired a boutique investment bank and has launched a capital raise.

The company has hired GLC Advisors as sellside advisor, according to sources familiar with the matter, and launched the capital raise this month, which seeks to raise $50m of equity and an additional $100m of financing.

CEO Hiro Iwanaga told ReSource last year that the company was gearing up for a Series B capital raise, including initiating talks with potential advisors.

Talus offers containerized systems that produce green ammonia from power, water, and air, in the form of the TalusOne (up to 1.4 tonnes of green ammonia daily) and talusTen (up to 20 tonnes per day).

The company delivered its first system to Kenya Nut Company, a multinational agricultural firm in east Africa, under a 15-year fixed-price ammonia offtake agreement, Iwanaga said in the interview. As of November, the company had a pipeline of approximately $1bn of indicated interest for ammonia from potential customers, which included large farms and mining companies in several global jurisdictions, including the US.

It recently completed a $22m Series A fundraising that would fund the delivery of the next three to four systems before the end of the year, Iwanaga said, stretching Talus’ footprint to Europe and the US, with one more system heading to South America.

The company is deploying to large farms and mining companies, where ammonia is used as a blasting agent. In the US, the company has partnered with agribusiness Wilbur-Ellis and farmer-owned cooperative Landus, Iwanaga said.

Iwanaga and GLC did not respond to requests for comment about the recently launched capital raise.

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Exclusive: Advanced Ionics raising $12.5m, seeking pilot project partners

Advanced Ionics, an electrolyzer developer based in the Midwest, is approaching a close on the second tranche of its Series A and is seeking sponsors for pilot projects in Texas and elsewhere.

The company’s Symbiotic electrolyzers use steam by tapping into excess heat from industrial settings, thereby lowering electricity needs for water splitting to 35 kWh per kg, with 30 kWh per kg possible. That compares to industry averages over 50 kWh per kg.

Advanced Ionics, the Milwaukee-based electrolyzer developer, is about six weeks out from closing a second tranche of its Series A and is seeking new partnerships for pilot projects in the US, Chief Commercial Officer Ignacio Bincaz told ReSource.

Bincaz, based in Houston, is working to close the second $12.5m tranche, which is roughly the same size as the first tranche. The company has technical teams in Wisconsin but could build out those as well as commercial capabilities in Houston.
The company’s Symbiotic electrolyzers use steam by tapping into excess heat from industrial settings, thereby lowering electricity needs for water splitting to 35 kWh per kg, with 30 kWh per kg possible. That compares to industry averages over 50 kWh per kg.

“We just put together our first stack, Generation One, which are 100 square centimeters,” Bincaz said. Generation Two stacks will come later this year, but to get to Generation Three — commercial size, producing between 7 and 16 tons per day — the company will have to conduct a Series B about one year from now.

“For that, we need to hit certain benchmarks on durability of a stack,” he said. “The money will go toward scaling up and getting the data expected by investors to get us to Series B.”

Aside from equity provisions, Advanced Ionics is looking for sponsors for pilots and related studies, Bincaz said. “There’s different ways that we’re looking for collaboration.”

Between 2027 and 2028 the company expects to have commercial-size Generation Three stacks in the market.

Pilot projects

Advanced Ionics has two pilot projects in development with Repsol Foundation and Arpa-E (US Department of Energy), respectively.

The Repsol project is a Generation One development producing 1 kilogram per day, Bincaz said. The government project will be the first Generation Two project.

Another pilot is in development with a large energy company that Bincaz declined to name. The company is also exploring pilot projects with bp, which is an investor in the company.

After four or so pilot projects of ascending scale, the company will look to do its first industrial-scale project using real process heat or steam, integrated into a hydrogen-use process like ammonia manufacturing or chemical refining.

“We’re talking to companies in Asia, companies in Europe, companies in the US,” he said, specifically naming Japan and Singapore. “I’m in early conversations.”

Advanced Ionics’ first tranche Series A was led by bp ventures, with participation from Clean Energy Ventures, Mitsubishi Heavy Industries, and GVP Climate.

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exclusive

Ammonia-to-power company planning up to $500m Series C

Ammonia-to-power start-up Amogy will launch a final equity raise once it establishes revenue milestones in 2023 and 2024

Amogy, an ammonia-to-power technology start-up, will likely launch a $400m to $500m Series C late next year, CEO Seonghoon Woo said in an interview.

The company should achieve its first revenues this year and grow those revenues in 2024 to reach a target valuation, Woo said. The company to date has not used a financial advisor.

Amogy is planning to use proceeds from a recent Series B-1 capital raise to expand into a Houston manufacturing facility as it seeks to bring its product to the market.

After demonstrating its technology on a drone, a tractor, and a semi truck, the company is currently working to install its ammonia-cracking technology on a tugboat, and plans to advance a commercialization strategy starting in 2024, Woo said.

The proceeds of the $139m capital raise announced last week will allow Amogy to expand into an already-built facility in Houston, Woo said. The company also plans to roughly double its workforce from 110 employees currently as it boosts capacity in R&D, manufacturing, and commercialization.

CEO Seonghoon Woo

Amogy was founded in 2020 by four MIT PhD alumni, including Woo, and is based in Brooklyn, New York.

Ammonia vs hydrogen

Woo believes using ammonia as a fuel and cracking it into hydrogen solves the transportation issues facing hydrogen, as ammonia is already a widely traded global commodity.

Similarly, at room temperature, ammonia can be stored as a liquid with only mild pressure (~8 bar), compared to the cryogenic requirements for liquid hydrogen.

And, according to a white paper commissioned by Amogy, the volumetric energy density of liquid ammonia is 12.7 megajoules per liter, which is higher than for liquid hydrogen at 8.5 MJ/L and compressed hydrogen at 4.7 MJ/L (at a pressure of 69 MPa in ambient temperature conditions), but lower than for diesel or gasoline.

“Over an equivalent distance, fueling a vehicle solely using ammonia would require approximately three times the internal tank volume needed for conventional diesel fuel but three times less than the volume required for compressed hydrogen,” the paper reads.

While Amogy’s technology is compatible with any color ammonia, Woo said regulations in Scandinavia and Europe give confidence that the global market for clean ammonia will become competitive with fossil-based fuels.

Scaling up

The recent capital raise gives Amogy roughly two years of runway before additional fundraising might be needed, at which point the company will have more visibility into revenue growth, Woo added.

The latest funding round was led by SK Innovation, joined by other global investors including Temasek, Korea Zinc, Aramco Ventures, AP Ventures, MOL PLUS, Yanmar Ventures, Zeon Ventures and DCVC.

The company previously raised roughly $70m in three separate funding rounds, with proceeds allowing it to demonstrate the drone, heavy-duty tractor, and semi truck. Woo said the tractor project drew interest from John Deere, which sent representatives to observe and offer some assistance on the retrofit.

In previous capital raises, Woo said Amogy has encountered investor reluctance to enter what is considered an early market with regulatory and economic risk, with some investors wanting to wait as much as another two years before gaining exposure to the market. The strongest interest has come from upstream producers.

Amogy plans to continue scaling up its technology in the maritime industry to cargo and container ships as well as offshore supply vessels, Woo said.

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