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Dow to take FID on low-carbon plant this year

Dow Chemical plans to take a final investment decision on a massive low-carbon plant in Canada that will use clean hydrogen as a feedstock. The chemicals giant estimates that returns on the project will be among the best in its history.

Dow will take a final investment decision later this year on an ethylene plant using hydrogen as a feedstock, with plans to spend approximately $1bn per year during a multi-year construction phase.

The chemical giant is pursuing a brownfield expansion and retrofit of its manufacturing site in Fort Saskatchewan, Alberta, known as Path2Zero. The project would decarbonize roughly 20% of Dow’s global ethylene capacity and triple its capacity to produce ethylene and polyethylene at the site.

“Our Path2Zero project in Alberta remains on track,” CEO Jim Fitterling said today. “We expect the final investment decision by year-end, pending completion of our subsidies and incentives with the Canadian federal government.”

Linde will complete the design and engineering for a Linde-owned and operated world-scale air separation and autothermal reformer complex, integrated with Linde’s existing operations in Fort Saskatchewan.

The proposed production process at Fort Saskatchewan will convert cracker off-gas into hydrogen as a clean fuel to be used in the ethylene production process and carbon dioxide will be captured onsite to be transported and stored by adjacent third-party carbon storage infrastructure partners.

“Our view on the Alberta project is we’re working in an environment that’s supportive of decarbonization: There’s a price on carbon in Canada,” Fitterling said. “There’s existing carbon capture infrastructure. And there’s obviously some investment credits for the hydrogen portion of the project.”

Fitterling continued, “As we mentioned, though, we have to keep in mind that this is also going to be a very low-cost asset from an ethane supply capability standpoint. So that’s why we say, our expectation is the returns will be at or above our Texas-9 cracker, which is the best project that we’ve ever had in our history.”

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Apollo invests in hydrogen and CNG storage and transportation solutions provider

Apollo funds have acquired a majority interest in a manufacturer of cylinders that facilitate the use of natural gas and hydrogen.

Apollo-managed funds have acquired a majority interest in Composite Advanced Technologies, Inc, a provider of compressed natural gas (CNG), renewable natural gas (RNG) and hydrogen transportation and storage solutions in the United States, according to a news release.

CATEC’s products and services help its customers transition away from carbon-intensive fossil fuels towards cleaner alternatives. Founded in 2014 and based in Houston, CATEC manufactures large format Type IV cylinders that facilitate the use of natural gas and hydrogen across a wide variety of industry applications when mounted on mobile trailers or used in stationary applications.

TerraNova Capital served as financial advisor and Baker Botts L.L.P. acted as legal counsel to CATEC. Vinson & Elkins LLP acted as legal counsel to the Apollo Funds. Financial terms were not disclosed.

CATEC’s high capacity, lightweight trailers and storage solutions help end-customers decarbonize, while making lower carbon energy sources more accessible and affordable. Gaseous fuels are one important solution for reducing carbon emissions in certain ‘hard-to-abate’ sectors. As penetration of natural gas continues and the hydrogen economy grows, logistics are expected be a constraint and CATEC is an early mover in providing safe and efficient solutions for a wide range of end uses.

Apollo Funds intend to invest further capital behind the company, seeking to establish a leading gaseous equipment manufacturing and services platform with enhanced capabilities and customer offerings to support expansion in the high-growth hydrogen transport and storage market, the release states.

Apollo Partner Scott Browning said, “CATEC’s proprietary manufacturing capabilities are critical to supporting the growing market demand to reduce carbon emissions in ‘hard-to-decarbonize’ industries. The CATEC team has built an impressive business, which we believe can scale to become a one-stop-shop platform for serving the equipment needs of the compressed gas value chain through various expansion initiatives. We look forward to helping accelerate the Company’s growth trajectory in support of the broader energy transition.”

Alberto Chiesara, Co-Founder and President of CATEC, added, “We are pleased to join forces with Apollo Funds to help expand our capabilities and better support the growing adoption of low-carbon fuel solutions such as hydrogen, RNG and CNG. Apollo’s track record in energy transition investing, industry experience and significant resources make them an ideal partner for CATEC as we scale and embark on our next phase of growth.”

Co-Founder of CATEC Ryan Comerford said, “It has been a privilege to help lead the team, and I’m confident new management, with the backing of Apollo Funds, will position the Company for further growth and success.”

The transaction underscores Apollo’s commitment to driving a more sustainable future and long track record of investing in or lending to companies supporting the energy transition. Last year, Apollo launched its Sustainable Investing Platform, which targets to deploy $50 in clean energy and climate capital by 2027 and sees the opportunity to deploy more than $100bn by 2030. Over the last five years, Apollo Funds have deployed over $23bn into energy transition and sustainability-related investments, supporting companies and projects across clean energy and infrastructure, including offshore and onshore wind, solar, storage, renewable fuels, electric vehicles as well as a wide range of technologies to facilitate decarbonization.

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Renewable fuels developer attracts investment from Sumitomo, pivots to SAF

Louisiana developer Strategic Biofuels has attracted investment from Sumitomo Corporation of the Americas and pivoted its flagship project to produce sustainable aviation fuel.

Strategic Biofuels, the developer of a renewable fuel plant in Louisiana, and Sumitomo Corporation of Americas (SCOA), a subsidiary of Sumitomo Corporation, have entered into a Joint Development Agreement for the Louisiana Green Fuels (LGF) project at the Port of Columbia in Caldwell Parish, Louisiana.

SCOA will take an anchor position and lead the formation of a Japanese-based investment consortium aimed at funding the majority of development capital needed to carry the project to Financial Investment Decision (FID) and commencement of construction in early 2025, according to a news release.

As part of the agreement, SCOA will also acquire rights at FID to participate for a portion of the full project equity requirement. In a decisive strategic shift related to the investment, Strategic Biofuels also unveiled plans to change its primary renewable fuel product to sustainable aviation fuel (SAF). SCOA intends to provide a 20-year offtake for the approximately 640 million gallons of renewable fuels produced as well as all state and federal renewable fuel credits.

“Our goal has always been to bring online a fuels plant contributing to a sustainable future, and we are thrilled to have SCOA as our partner in our LGF endeavor. The shift to SAF is an exciting moment for us and our partners, for the energy landscape in Louisiana and for the greater global energy transition overall,” said Dr. Paul Schubert, CEO of Strategic Biofuels. “Although we have a lot of work ahead of us, our team is fully prepared to advance the project to FID and supply SCOA with SAF.”

When the LGF project was first announced, Strategic Biofuels garnered recognition for the extraordinarily low carbon footprint of the planned renewable diesel fuel product. The footprint of SAF that will now be produced is expected to be so low that just one gallon of it blended with three gallons of fossil-derived jet fuel will reduce the dependency on carbon in the future. To achieve this carbon reduction in 2029, the LGF plant will utilize:

  • Approximately 1 million tons per year of forestry waste as the feedstock for the biorefinery;
  • Green energy from an integrated biomass-fired power plant that will take nearly 1 million tons of sawmill waste annually to produce 86 megawatts of power; and
  • Geologic carbon sequestration of 1.36 million metric tons per year of CO2 produced from both of those operations to create this fuel which is equivalent to removing nearly 300,000 passenger cars from the road, making it a product much in demand by the aviation industry.

“Our partnership with Strategic Biofuels is just another example of our commitment to support the energy transition within the Americas,” said Sandro Hasegawa, General Manager, Energy Innovation Initiative Americas at SCOA. “Supporting the LGF project means bringing groundbreaking technology to the Port of Columbia that enables the local economy and sustains the natural environment. We look forward to leading the investment with our partners in Japan and demonstrating what can be accomplished when global players work together.”

This investment commitment from SCOA continues the path from 2023, which was a year of rapid project advancement for LGF. Most recently, Strategic Biofuels announced that the Louisiana Department of Environmental Quality had issued an Air Permit for the integrated LGF facility, an industry “first of its kind” in Louisiana and a major step forward for the project. This followed an agreement with SLB, a global technology company, to provide its industry-leading technical services for the company’s planned carbon sequestration complex. Earlier in the year, the EPA deemed the project’s Class VI permit application for carbon sequestration as “administratively complete,” which included extensive geologic data collected from LGF’s 2021 Class V stratigraphic test well.

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Canadian hydrogen-as-a-service developer signs trucking offtake MoUs

Hydra Energy has signed detailed MoUs with eight new commercial truck fleets operating in British Columbia, and continues to pursue equity and debt capital supporting a refueling station and hydrogen corridor.

Canadian hydrogen-as-a-Service developer Hydra Energy has achieved another significant milestone in its Prince George, British Columbia project rollout by signing detailed MOUs with eight new commercial truck fleets in the region.

This represents 82 Class 8 trucks to be retrofitted using Hydra’s proprietary hydrogen-diesel, co-combustion conversion technology, according to a news release.

Once converted by Hydra installation partner, First Truck Centre, these trucks will refuel at the world’s largest hydrogen refuelling station Hydra is currently building in Prince George to be operational in 2024 which leverages green hydrogen produced on site by two 5 MW electrolysers powered with hydroelectricity.

These new fleet commitments and supporting hydrogen infrastructure from Hydra will make this the largest commercial deployment of hydrogen-diesel co-combustion transportation vehicles in the world as Hydra continues to fast track emissions reductions in the hard-to-abate trucking sector.

Hydra continues to work on the closing of a CAD 14m equity capital raise with several parties interested, with proceeds supporting the development of the Prince George project, a Hydra spokesperson said in response to inquiries.

The equity portion of the financing is needed to unlock an additional CAD 150m debt facility to complete initial scale-up of the company’s planned hydrogen corridor along Highway 16 in Western Canada, Hydra Energy CEO Jessica Verhagen told ReSource last year.

“Upon signing our first commercial fleet customer in Prince George and breaking ground on our local refuelling station last year, we had an initial goal to secure 65 heavy-duty trucks to leverage the new station once operational next year. We’re pleased to surpass this target with the signing of these eight fleets highlighting the continued interest in hydrogen trucking and the benefits it delivers for fleets of all sizes, even with heavy payloads in challenging weather and road conditions like those found in Northern B.C.,” Verhagen said in today’s release. “Securing immediate offtakers for our station’s low-carbon hydrogen is another critical piece in our Prince George HaaS blueprint illustrating to potential investors and licensees how hydrogen supply and demand can profitably come together. We look forward to working with First Truck Centre to start converting these trucks about six months prior to our station’s opening and to continuing to work with the City of Prince George as the flagship stop in the Western Canadian Hydrogen Corridor we’re building between the B.C. Coast and Edmonton.”

The eight companies who have signed MOUs represent a range of fleet sizes and types of heavy-duty trucks highlighting the cost effectiveness of Hydra’s HaaS business model and the platform agnostic nature of the company’s dual-fuel conversion technology. For example, Arrow Transportation Systems is a leader in bulk commodity hauling, reload operations, and freight management serving North America and according to Jacob Adams, their Manager of Optimization and Sustainability, “is excited about the potential opportunity to collaborate with Hydra on hydrogen-converted trucks.”

Added Annie Horning, CEO of Excel Transportation, a Prince George-based transport and logistic service company for the forestry industry who also signed an MOU, “Once we heard about the progress Hydra has been making on their hydrogen refuelling station right in our own backyard, the fact their hydrogen wouldn’t cost us more than diesel, and that it would cost nothing to retrofit our trucks to run cleaner and more efficiently, we couldn’t pass on the opportunity. Hydra allows us to make a positive difference sooner than later while eliminating our range anxiety concerns that could impact our service reliability.”

Hydra’s Service Delivery Lead, Ilya Radetski, elaborated, “In addition to Arrow and Excel, we also signed MOUs with Edgewater Holdings, Wilson Bros. Enterprises, Burke Purdon Enterprises, Godsoe Contracting, Keis Trucking, and Peace Valley Industries who all service the Prince George and Northern B.C. region. We also continue to have ongoing discussions with additional local fleets who are keen to explore how hydrogen can benefit them. These contracted offtakers now complete the final piece of our initial HaaS regional model which, as mentioned, also includes an installation partner, hydrogen production, and then the hydrogen refuelling station. This forms an easily reproducible template for licensing companies along the hydrogen value chain who want to see their hydrogen supply or infrastructure come to market at scale in the most profitable way possible, in Canada and beyond.”

“Hydra is an example of a company that tailors their solution to this region instead of using a one-size-fits-all approach. Their technology can work in the cold and doesn’t affect payload or power. We continue to watch their exciting progress locally and support their efforts in helping Prince George diversify its economy and improve air quality,” added Prince George Mayor, Simon Yu.

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Exclusive: Emissions reduction technology firm in Series A capital raise

A technology start-up that uses plasma to reduce emissions from natural gas and methane flaring is seeking an additional $15m to top off its Series A capital raise. One of its principal products converts natural gas into hydrogen and usable graphene with no CO2 emissions.

Rimere, a climate solutions company with proprietary plasma technology, is seeking to raise an additional $15m as part of its ongoing Series A capital raise.

The start-up recently announced an anchor investment of $10m from Clean Energy Fuels Corp, a publicly listed renewable natural gas firm, and is pursuing further investments from strategics and financial players, with an eye on closing the round in 2Q24, CEO Mitchell Pratt said in an interview.

The company is not currently working with a financial advisor on the Series A capital raise, Pratt said. Its legal counsel is Morrison Foerster.

The anchor investment along with additional funds raised will allow Rimere to advance development and field testing of its two principal products, the Reformer and the Mitigator. 

The Mitigator is a plasma thermal oxidizer that reduces the greenhouse gas potency of small-scale fugitive methane emissions, while the Reformer transforms natural gas into clean hydrogen and usable graphene without creating any CO2 emissions.

The products are meant to work in tandem to decarbonize natural gas infrastructure and deliver cleaner gas to end users in transportation, power generation, and industry.

“We believe that, overall, what the technology does is revalue natural gas reserves and the long-term viability of natural gas for global future energy,” Pratt said.

Commercial strategy

Rimere will develop a commercial strategy throughout the course of this year for the Mitigator, and plans to deploy the product in the beginning of next year.

“We have quite a bit of interest for this as a solution because of the low cost of the product and the terrific results,” Pratt said, noting that the Mitigator removes CO2 for under $5 per metric ton.

In contrast, the Inflation Reduction Act passed in 2022 introduced the Methane Emissions Reduction Program, a charge on methane emitted by oil and gas companies that report emissions under the Clean Air Act. The charge starts at $900 per metric ton of methane for calendar year 2024, increasing to $1,500 for 2026 and beyond.

To be sure, the Mitigator, as a thermal oxidizer, transforms methane, which is a much more potent greenhouse gas, into hydrogen, water, and CO2 for a net reduction of the global warming impact of 200 metric tons a year of CO2.

The Reformer, a container-style unit, is being scaled up to produce 50 kg per day of hydrogen from natural gas along with 150 kg of graphene, a marketable nano carbon where the CO2 is captured. Graphene is used in batteries, composites, medical devices, and concrete to reduce greenhouse gas emissions, among other applications.

Rimere plans to increase the scale of the Reformer to between 400 – 600 kg per day and raise additional funds next year, Pratt said. The amount of funds needed for that is not yet known, he said.

Pratt envisions an application for hydrogen blending using the two products.

“We see it as a way to decentralize hydrogen production, taking advantage of a cleaner natural gas infrastructure, because we’ve applied the Mitigator to cleaning up those fugitive methane emissions that are occurring in the normal operations of equipment,” Pratt said.

For example, Rimere can tap into a natural gas pipeline, take a slipstream of gas, extract the valuable graphene, and then re-inject hydrogen and natural gas back into the pipeline.

Additionally, the blending application can be positioned at an end-use customer’s facility, allowing the Reformer to start blending hydrogen into the gas stream, going into boilers and burners and reducing the CO2 emissions more effectively and immediately, Pratt said.

$1 per kg

Taking the average cost of delivered natural gas and power to industrial users, the company can already produce hydrogen at $1 per kilogram, Pratt said.

For every four kilograms of end-use product – one being hydrogen, the other three graphene – the energy cost allows hydrogen to be produced at or below $1 per kg.

“The last 12 months of running is less than a dollar,” he said, emphasizing that the graphene production is not subsidizing the hydrogen.

“Although the value of graphene could make hydrogen a throwaway fuel.”

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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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California renewables developer taps advisor for capital raise

Utility-scale solar and storage developer RAI Energy has tapped an advisor for a capital raise. The company is evaluating co-development conversion for green ammonia production at projects in Arizona and California.

RAI Energy, the utility-scale solar and storage developer, has hired an advisor as it pursues a capital raise.

The company is working with Keybanc Capital Markets in a process to raise up to $25m, according to two sources familiar with the matter.

In an interview, RAI Energy CEO and owner Mohammed S. Alrai said the company “is excited about having [Keybanc] act as our financial advisors on this fundraising round.” He noted that RAI is first a solar-plus-storage developer and is approaching investors as such.

However, RAI is evaluating co-development conversion for green ammonia production at two of its project sites in Arizona and California, he said.

“Hydrogen is a natural next step,” Alrai said of his company, adding that the end-product would be green ammonia for use in fertilizer production and industrial sectors. Pure hydrogen could also be kept for use in transportation.

A variety of partnerships would be required to develop hydrogen at RAI’s solar sites, Alrai said. The company could need advisory services to structure those partnerships.

RAI is working with engineers on the hydrogen question now and is open to additional technology and finance advisory relationships, he said. The company is also evaluating several electrolyzer manufacturers.

“It’s an open book for us right now,” Alrai said of hydrogen production. “We’re always open to talking to people who can help us.”

For hydrogen project development, RAI would seek project level debt and equity similar to its solar developments, Alrai said. Early-stage project sites in Colorado and New Mexico could also be candidates for hydrogen co-development.

Keybanc delined to comment for this story.

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