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EU operators apply to build hydrogen pipeline ‘backbone’

German and Belgian infrastructure operators Fluxys and GASCADE plan to build a 400 km pipeline in the North Sea.

GASCADE and Fluxys have applied to the European Commission for Project of Common Interest (PCI) status for the AquaDuctus project, marking a major step forward in their plans for an offshore pipeline for green hydrogen in the North Sea, according to a news release.

The move by the two infrastructure operators highlights the project’s importance for the hydrogen ramp-up.

“The offshore pipeline, which will be over 400 km long when completed, will become a linchpin of Germany’s and Europe’s future offshore hydrogen infrastructure,” said GASCADE Managing Director Christoph von dem Bussche, emphasizing the project’s European, interconnecting character.

That is because the pipeline is designed as a “backbone,” able to collect hydrogen from multiple production sites while also offering the potential to link up with other international hydrogen flows through the North Sea. Hydrogen will be taken to the German coast via the offshore pipeline and fed into the onshore hydrogen network there. In this way, AquaDuctus will provide large-scale offshore hydrogen infrastructure in the German North Sea for hydrogen to be imported into Germany.

GASCADE and Fluxys have ambitious plans for this project. The first step will see the SEN-1 hydrogen wind farm connected to AquaDuctus, with flows to start in 2030. In subsequent years, wind farms further offshore in Germany’s exclusive economic zone may be linked up as well as hydrogen infrastructure operated by other North Sea countries. By 2035, the offshore pipeline is to develop into a main hydrogen corridor carrying up to one million tonnes of hydrogen a year into Germany. Based on the gas and hydrogen package currently being negotiated at European level, the two long-standing transmission system operators plan the AquaDuctus offshore pipeline as a regulated open access infrastructure available to all future operators of hydrogen wind farms, thereby strengthening security of supply in the future.

“We firmly believe that the AquaDuctus offshore pipeline will be a key element of Europe’s future energy supply picture and a major advance in the drive towards climate neutrality,” says Fluxys Managing Director and CEO Pascal De Buck. The offshore pipeline will make a substantial contribution to security of supply by diversifying Europe’s hydrogen supply sources. “Our specific plans for AquaDuctus will allow Germany’s federal government to put in place concrete actions following up the efforts it has made on hydrogen with European partners such as for example Norway or within the framework of the Esbjerg Declaration,” said von dem Bussche, underscoring the feasibility of the project.

Studies identify up to 100 GW of hydrogen production potential in the German and European North Sea and view an integrated European offshore pipeline network as the ideal transport solution. “With our AquaDuctus offshore pipeline, we want to jointly enable this potential to be leveraged,” explain the two managing directors.

A comprehensive feasibility study for the project has been successfully completed. The study examined and confirmed the technical and planning feasibility of all phases of the project. Commercial aspects, marketing potential, pricing and regulatory design options were also analyzed.

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Blue Biofuels signs MOU for sugar-to-biofuels offtake

A definitive agreement to purchase the ethanol and SAF produced by Blue Biofuels from plant materials is expected to be reached before the company completes its semi-commercial facility.

Blue Biofuels, a Florida-based company converting organic waste into sugar and subsequently into fuels, has signed an MOU with World Energy Sustainable Products for the purchase of the products like ethanol and SAF, according to a news release.

Blue Biofuels will register the various products with the relevant regulatory agencies do that they will qualify for use and any available credits. A final definitive agreement is expected to be reached before Blue Biofuels completes the buildout of its semi-commercial facility.

“[World Energy has] the sales volume to absorb our products and bring them to the market, and they are very interested to further develop the markets for sustainable fuels,” Blue Biofuels CEO Ben Slager said in the release. “As we go along and our volumes and timelines get more final we will start filling in specific products and volumes to be brought to the market.”

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Decarbonizing the planet’s 1,000 most CO2-intensive assets

A report from German management consulting firm Roland Berger outlines a pathway for decarbonizing the 1,000 assets that emit the most carbon globally.

A new report from German management consulting firm Roland Berger proposes a strategic approach to combat climate change by targeting the decarbonization of the world’s 1,000 most carbon-intensive assets. 

The plan, called the Global Carbon Restructuring Plan, identifies the 1,000 coal-fired power plants, iron, and steel plants that are major contributors to CO2 emissions, noting that over half of these assets are located in China, with significant numbers also in India and the United States.

The ownership of these assets is notably consolidated, with just 40 companies holding assets responsible for half of the noted emissions, suggesting that targeted initiatives could lead to significant environmental benefits, according to the report. Meanwhile, only 160 asset owners together account for around 80% of these emissions.

With a concerted effort to transition these assets towards more sustainable energy sources, including renewable energy, gas, nuclear power, and carbon capture and storage(CCS), the plan outlines a pathway to achieve a substantial reduction in global carbon emissions.

The report calls for widespread deployment of renewable energy in all regions, but notes that each region should “play to its strengths” by complementing renewables with the next best local solution:

  • For China and India, this means employing CCS for their high proportion of young coal- and gas-fired power plants. 
  • In the US, switching from coal- to gas-fired power plants with CCS makes sense due to the low natural gas prices. 
  • Europe should strive for the deployment of CCS and (re-) consider nuclear as a zero-emission technology that can replace baseload energy supply. 
  • Like China and India, countries in the RoW cluster should focus on widespread incorporation of CCS for carbon-intensive assets. 

According to the study, decarbonizing these key assets could result in a reduction of 8.2 gigatons of CO2 emissions, representing a third of the required reduction to maintain hopes of limiting global warming to 1.5°C. Financially, the decarbonization efforts are estimated to cost between USD 7.5 trillion for renewable energy initiatives and up to USD 10.5 trillion for nuclear and CCS solutions over a 26-year period from 2025 to 2050.

 

The report points to stark differences in the costs of decarbonization among emitter countries. “Taken as one-off expenses, decarbonizing the top 1,000 assets will cost China 23-32% of its GDP and will cost 18-31% of GDP in India,” according to the report. “For the RoW cluster, it comes to 9-10%, but for Europe and the United States, it works out at just 2-5% of their respective GDPs.”

‘Headroom’

The Global Carbon Restructuring Plan delves into the financial viability of decarbonization technologies, highlighting a concept known as ‘headroom’. Headroom represents the financial capacity of asset owners to invest in decarbonization without reaching unsustainable levels of debt. The plan’s analysis indicates that the 406 asset owners identified possess a collective headroom of approximately USD 2.2 trillion, underscoring the financial potential to support decarbonization efforts significantly​​.

This financial headroom is unevenly distributed across regions and sectors. Remarkably, almost half of this capacity is held by companies outside of the traditional economic powerhouses, in the rest of the world (RoW), particularly within the oil and gas sector. Chinese companies account for 21% of the total headroom, with US firms close behind at 20%. European companies contribute 9%, while Indian firms represent a mere 3% of the global capacity​​.

The plan raises a pivotal question: Is this USD 2.2 trillion in headroom sufficient to finance the transition to low-carbon technologies? The answer varies by the type of decarbonization solution. For carbon capture and storage (CCS) and gas, the required capital expenditures (CapEx) of USD 1.2 trillion and USD 1.3 trillion, respectively, fall within the available headroom, suggesting these technologies could be pursued immediately with existing financial resources. However, renewable energy sources (RES) and nuclear power present a more complex financial challenge, each requiring an estimated USD 4 trillion in CapEx—nearly double the available headroom. This indicates that an additional USD 2 trillion in financing, from either public or private sources, would be necessary to fully implement these solutions​​.

Moreover, the plan underscores that financeability is not solely a function of the technology chosen but also varies significantly by region. While companies in RoW could feasibly finance all four decarbonization solutions, China and India face substantial financial hurdles across the board. In contrast, for Europe and the US, only the shift to 100% nuclear power would encounter significant financial barriers​​.

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WEC Energy Group, EPRI complete hydrogen blending test

During two weeks of testing in mid-October, hydrogen and natural gas were tested in blends up to 25%/75% by volume to power a reciprocating internal combustion engine.

Upper Midwest utility WEC Energy Group and the Electric Power Research Institute (EPRI) successfully demonstrated the blending of hydrogen in a natural gas generator.

The project is the first hydrogen power test of a utility-scale, grid-connected reciprocating engine generator in the world, according to a press release earlier this month.

During two weeks of testing in mid-October, hydrogen and natural gas were tested in blends up to 25/75 percent by volume to power one of the reciprocating engine generating units that serves customers of Upper Michigan Energy Resources, a WEC Energy Group subsidiary.

The testing was performed on an 18 MW unit that uses a technology known as RICE — reciprocating internal combustion engines. The RICE unit was continually monitored during the test to measure performance, output and emissions data.

“We’re very pleased to take a leading role exploring the potential of this technology as we focus on providing customers with affordable, reliable and clean energy,” said Gale Klappa, executive chairman — WEC Energy Group. “As we bring more renewable energy online, we must ensure that we can keep the lights on when the sun is not shining and the wind is not blowing. The results of this project are a strong indicator that these dispatchable units can run on very low- and no-carbon fuels.”

“Demonstration projects like this one are critical to advancing clean energy technologies needed to meet net-zero goals,” said EPRI President and CEO Arshad Mansoor. “This project will provide key insights on how this could be replicated around the world, providing energy companies with a suite of solutions to reduce carbon emissions. We look forward to working with WEC Energy Group and other energy stakeholders throughout the clean energy transition.”

WEC Energy Group has set some of the most aggressive environmental goals in the energy industry, including net-zero carbon emissions from electric generation by 2050 and net-zero methane emissions from natural gas distribution by the end of 2030.

WEC Energy Group and EPRI worked with numerous industry groups on the project, including Wärtsilä, Burns and McDonnell, and Certarus. The project would not have been possible without the cooperation and support of Cleveland-Cliffs, the primary user of the power generated by the test unit.

EPRI will share a complete analysis of the project in early 2023 to further inform the energy industry on ways to successfully use hydrogen for RICE power generation to support reducing carbon emissions.

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Illinois ethanol company seeking offtaker for SAF project

Seeking to diversify into new markets, Marquis, a family-owned ethanol producer based in Illinois, is looking for an offtaker for its first sustainable aviation fuel plant.

Marquis, a family-owned ethanol producer based in Illinois, is seeking an offtaker for its first sustainable aviation fuel plant.

The company, which is developing the plant in partnership with LanzaJet, an SAF firm, recently completed a feasibility study for the project, and is looking for airlines or users of renewable diesel as offtakers, Dr. Jennifer Aurandt Pilgrim, the company’s director of innovation, said in an interview.

Marquis owns and operates a 400 million gallon per year ethanol plant – the largest dry-grind ethanol plant in the world – which produces sustainable ethanol for fuel and chemicals as well as a feed for the aquaculture and poultry industries.

The company will divert roughly 200 million of those gallons to make 120 million gallons per year of SAF and renewable diesel, Aurandt said, noting that Marquis is looking to branch into new markets where ethanol is a feedstock.

“As more electric vehicles come on, there will be about a 3 billion gallon demand destruction for ethanol, and SAF is one of the great markets that we can diversify into,” she said.

Aurandt said financing for the SAF facility will ultimately depend on who the offtaker is.

Use cases

United Airlines, Tallgrass, and Green Plains Inc. recently formed a joint venture – Blue Blade Energy – to develop and then commercialize SAF technology that uses ethanol as its feedstock.

SAF using corn as a feedstock does not currently qualify for incentives in the Inflation Reduction Act, which uses standards laid out by the International Civil Aviation Organization that effectively exclude corn-based SAF from qualifying.

Marquis and other ethanol producers are pushing for the adoption of a lifecycle greenhouse gas model, known as GREET, developed by the Argonne National Laboratory, that would allow corn-based feedstock to qualify, said Dustin Marquis, the company’s director of government relations.

The company is also looking to attract partners to set up operations in the Marquis Industrial Complex, which is touted as a 3,300-acre industrial site with natural gas lines, access to multiple forms of transportation, and carbon sequestration on-site.

“We’re looking for other businesses where there would be either vertical integration or business synergies between the two organizations,” Marquis said.

Marquis said in a news release it would develop two 600 ton per day blue hydrogen and blue ammonia facilities along with manufacturing for carbon neutral bio-based chemicals and plastics.

CO2 utilization

In its production process, Marquis makes 1.2 million tons of biogenic CO2 per year, and has applied for an EPA Class IV permit for sequestration.

“We like to say it’s direct air capture with the corn plant,” Aurandt said, adding that the CO2 is purified via fermentation to 99.9% pure, and will be injected into a formation that sits beneath the Marquis Industrial Complex.

The company is additionally developing a CO2 utilization project with LanzaTech, which would augment ethanol production using CO2 as a feedstock. The project was recently awarded an $8.54m grant from the US Department of Energy, the largest award in the category of corn ethanol emission reduction.

“We can increase the amount of ethanol that we produce here by 50%,” Aurandt said. “So we could make 200 million gallons of ethanol per year” from CO2, she added, noting that the pilot demonstration will be the largest CO2 utilization project in North America. It is expected to be operational in late 2024.

The SAF plant and the CO2 utilization project will use hydrogen for refining and as an energy source, respectively, Aurandt said.

Gas Liquid Engineering is the EPC for the CO2 unit, and Marquis will use compressors from Swedish multinational Atlas Copco.

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It’s an electrolyzer – but for CO2

A New Jersey-based start-up is seeking to commercialize an electrocatalytic technology that transforms CO2 into a monomer for the plastics industry.

RenewCO2 is developing and seeking to commercialize a modular technology that converts waste CO2 into a usable product.

The New Jersey-based company is advancing a pilot project at an Ace Ethanol plant in Wisconsin that will take CO2 and convert it to monoethylene glycol, which can be used by the plastics industry.

The project was recently selected by the US DOE to receive a $500,000 grant. It seeks to demonstrate the technology’s ability to reduce the ethanol plant’s carbon footprint and produce a carbon-negative chemical.

In an interview, RenewCO2 co-founders Anders Laursen and Karin Calvinho said their technology, which was developed at Rutgers University, is geared toward carbon emitters who can not easily pipe away their CO2 and who may have use for the resulting product.


“It’s a matter of economics,” said Calvinho, who serves as the company’s CTO. Using the RenewCO2 technology, the ethanol plant or other user is able to keep 45Q tax incentives for capturing CO2 while also creating a product that generates an additional revenue stream.

Additionally, the modular design of the technology prevents emitters from having to build expensive pipeline infrastructure for CO2, she added. “We want to help to facilitate the use of the CO2 on site,” she said.

One of the goals of the project is to measure the carbon intensity of these technologies in combination, which ultimately depends on the electricity source for the electrochemical process, similar to an electrolyzer, Laursen, who is the CEO, said.

“The main constraint from a location point of view is the availability of reliable and affordable green power,” Laursen added.

Creating a market

The principal target market for RenewCO2’s technology is existing producers of monoethylene glycol (MEG), which is used to make recycled plastics, as well as ethanol producers and other emitters with purified CO2 streams.

Producers of polyethylene terephthalate (PET) – one of the most recycled plastics globally – are also potential customers since they use MEG in their production process and have CO2 sources on site.

“Right now, MEG produced in the US is, for the most part, not polymerized into PET – it’s shipped overseas for making PET plastics used in textiles, and then made into fibers or shipped further,” Laursen said. “So if you can shorten that transport chain, you can reduce the CO2 emissions associated with the final product.”

RenewCO2 is looking for partners to help build the modular units, and is evaluating the purchase of existing PEM electrolyzer units that can be reconfigured, or having the units custom manufactured.

“We’re talking to potential manufacturing partners and evaluating whether we should do the manufacturing ourselves,” Calvinho said. And if they choose the latter route, she added, “we will have to build our own facilities, but it’s early to say.”

The company has raised a total of $10m in venture investment and grant funding, including a pre-seed round of over $2m from Energy Transition Ventures, a Houston-based venture capital fund.

While not currently fundraising, Laursen said they are always taking calls to get to know the investors that are interested in the space. He added that the company may need to raise additional capital in 12 to 18 months.

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DG Fuels charting path to be SAF powerhouse

The company has retained advisors and is mapping out a plan to build as many as 50 production facilities in North America for a “gigantic” sustainable aviation fuel market.

DG Fuels is charting a plan to build a proprietary network of 30 to 50 sustainable aviation fuel (SAF) production facilities in North America, CEO Michael Darcy said in an interview.

The Washington, D.C.-based company will pursue a combination of debt and equity on a case-by-case basis to fund the projects, Darcy explained, with financings underway now for the firm’s initial project in Louisiana and a second facility in Maine. The Louisiana facility recently inked a USD 4bn offtake agreement with an undisclosed investment grade industrial buyer.

The company is working with Guggenheim and Stephens as financial advisors, Darcy said. About 60 people hold equity in the company; Darcy and the founding team hold a majority stake.

In the coming months DG Fuels will likely make announcements about more SAF plants in the US and British Columbia, Darcy said. Site negotiations are underway and each project is its own subsidiary of the parent company.

“There’s clearly a good return of what we refer to as the ‘project level,’ and then we have the parent company,” Darcy said. “We have strategic investment at the parent and now we’re looking at strategic investment at the project level.”

Huge demand, low supply

DG Fuels produces SAF from cellulosic biomass feedstock, a technology that does not need sequestration of CO2 because natural gas is not used.

“We like to say it’s the corn cob, not the corn,” Darcy said. The company can also use timber waste, waxes, and renewable power as an important source of energy.

The company gets about 4.5 barrels of SAF for every ton of biomass feedstock, which is roughly three to four times the industry average, Darcy said.

“Practical scale” for a facility is 12,000 to 15,000 barrels a day, Darcy said. That’s big enough to be commercialized without stressing the electrical grid with power demand.

Despite the company’s advantages, there is “plenty of room” for other producers to come into the SAF space, Darcy said.

“Right now, the market for SAF is gigantic and the supply is minimal,” Darcy said. “Companies like us are able to pick and choose high-quality offtakers.”

DG Fuels includes Delta Airlines, Air France and General Electric as committed offtakers.

Multi-tasking

DG Fuels is “always engaged in some level of capital raise for construction of facilities and detailed engineering,” Darcy said. “There’s always more engineering to be done.”

Some of the financing has already been completed, but Darcy declined to go into additional detail. After Louisiana, the company will quickly follow up with Maine.

HydrogenPro AS recently announced that it would join Black & Veatch and Energy Vault in financing the remaining capital requirements of DG Fuels’ project in Louisiana, which is expected to be completed in mid-2022.

Most of the engineering work in Louisiana is transferable to the company’s project in Maine. Darcy likened the facilities’ build-out to a class of ships: once the first is completed, the second and third can be built almost concurrently.

“There will be a point where we won’t be building one at a time,” Darcy said.

The opportunity for funders to participate is broad in the SAF space, Darcy said. There is a crossover of good economics and ESG, so strategics, industrials, private equity and other pure financial players can all be involved.

The broad base of capital eager to participate in companies that are innovative — but not too innovative as to scare investors — is indicative of the industry’s ability to secure offtakers and feedstock.

Storing power

It’s one thing to acknowledge the need for reduction of carbon, but hard work is required ahead, Darcy said.

“The low-hanging fruit has been done,” he said of the renewables industry. “Now it’s not really about the power, it’s about the storage of power.”

DG Fuels is an offtaker of non-peak renewable power to displace fossil fuel energy. But baseload renewable power is becoming available almost anywhere.

The Maine project will use stranded hydroelectric power, Louisiana will use solar, and projects in the Midwest will use wind, Darcy said. Additionally, geothermal power is “starting to become a very real opportunity,” he added.

Deploying broadly with renewable power gets past the issues of variability of renewable power at a reasonable cost, he said.

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