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Everfuel and Hy24 form EUR 200m JV for Nordic H2 infrastructure

Everfuel Hy24 A/S will be fully consolidated in Everfuel’s accounts; Everfuel will own 51% and Hy24 will own 49%.

Everfuel, the green hydrogen producer based in Denmark, and Hy24, the clean hydrogen infrastructure fund of French private equity firm Ardian, have formed a JV to finance electrolyzer capacity across the Nordics, according to a news release.

The JV will be named Everfuel Hy24 A/S and fully consolidated in Everfuel’s accounts. Everfuel will own 51% of the JV and the Hy24-managed Clean H2 Infra Fund will own 49%.

Plans call for a total equity investment of EUR 200 million in green hydrogen infrastructure in Denmark, Norway, Sweden and Finland. This will enable the JV to fund, build, own and operate up to 1 GW of green hydrogen projects.

The JV combines Everfuel’s position as a green hydrogen project developer in Europe and Hy24’s industrial experience and financial strength. It will further benefit from Everfuel’s pipeline of hydrogen projects as they are matured to final investment decision (FID) and transferred to the JV subject to predefined criteria.

The JV’s first investment is to acquire the HySynergy Phase 1 20 MW green hydrogen production plant in Fredericia, Denmark for a purchase price reflecting the costs incurred at signing, less grants received, subject to adjustment for additional costs incurred up until closing. HySynergy is expected to commence commercial operations in the second quarter of 2023 and will contribute to industrial processes at the adjacent Crossbridge Energy Refinery.

That project will also offer a competitive supply of green hydrogen as zero-emission fuel for clean mobility. In December 2022, HySynergy Phase 2, 300 MW, green hydrogen plant was granted IPCEI funding of EUR 33.1m to support the construction of the first of three 100 MW electrolyzers.

The purchase price paid by the JV to Everfuel for the acquisition of HySynergy Phase 1 is estimated at EUR 28m. With the transfer of HySynergy Phase 1 to the JV, Everfuel will repay the outstanding EUR 10m loan provided by the European Investment Bank. Hy24 will also provide a bridge loan of EUR 15m to JV that is expected to be replaced with a larger facility from external debt providers as HySynergy Phase 2 is matured. Everfuel holds an option to purchase Hy24’s shares in the JV at a pre-agreed return within a specified time period.

Under the agreement, the JV will deliver revenue and cash flow to Everfuel through fees during the project development, construction and operation phases. Everfuel will also be entitled to defined development fees from the JV for projects reaching FID based on the return profile of each specific project. Everfuel retains an exclusive right to market merchant hydrogen volumes from the electrolyzers owned and operated by the JV to support the growth of Everfuel’s downstream business activities.

Denmark is planning to develop 4 GW to 6 GW of electrolyzer production capacity by 2030, leveraging wind resources. Everfuel’s current project portfolio in Denmark includes more than 1.3 GW of electrolyzer capacity.

Following completion of the JV’s establishment, Everfuel is sufficiently funded to support its share of anticipated JV investments, including projects passed through FID, towards the end of 2023. As part of the JV incorporation, Hy24 has committed to participate in a potential future capital raise by Everfuel to support the company and the realization of green infrastructure projects, subject to certain conditions.

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Technology in focus: Avnos’ hybrid direct air capture uses water instead of heat

By using water captured from the atmosphere to regenerate its CO2-capturing sorbents, Avnos hopes to cut the operating costs of direct air capture plants and lower barriers to deployment.

One of the challenges of direct air capture (DAC), the new technology that promises to extract carbon dioxide (CO2) directly from the air all around us, is that it needs a lot of energy, and thus costs a lot of money. Currently, different types of DAC technologies require between 6 and 10 gigajoules per ton of carbon dioxide captured, according to the International Energy Agency.

The key to making a new DAC technology successful therefore is cutting energy needs and costs. Avnos, a Los Angeles-based carbon removal company, is trying to accomplish this by developing what it calls hybrid direct air capture (HDAC), backed by $36m in Series A funding closed in February, and over $80m in strategic and investment partnerships, announced in July

Avnos’ process is described as “hybrid” DAC because it captures both CO2 and water, as humidity, from the atmosphere at the same time. 

“In a generic DAC process, heat is critical to separating the captured CO2 from its ‘sponge,’ or sorbent, and regenerating that sorbent so that a plant may operate cyclically,” Avnos co-founder and CEO Will Kain said in an interview. “By contrast, Avnos uses a reaction enabled by the water it sources from the atmosphere to regenerate its sorbents. The impact of this use of water in the place of heat lowers the operating costs of an Avnos plant and lowers the barriers to deployment.” 

Less heat means less energy, which means companies using Avnos’ technology will have to compete less than regular DAC to access carbon-free energy sources and will have more flexibility in terms of where to put their facilities. 

“Unlike peer DAC companies who build and operate their hardware, our product is designed to be licensed and operated by any company committed to decarbonization and allows them to upgrade, modularly, as the tech advances over the long term,” Kain told ReSource

Avnos has an active pilot plant in Bakersfield, California, funded by the Department Of Energy and SoCal Gas. The plant began operating in November 2023, and it can capture 30 tons of CO2 and produce 150 tons of water annually. 

The company is also in the process of building a second pilot plant with the U.S. Office of Naval Research to pilot CO2 capture and e-fuels production – Avnos does not currently produce e-fuels, but sustainable aviation fuels producers could use its technology to source water and CO2, and it partners with sustainable aviation investors like JetBlue Ventures and Safran. 

Additionally, it is going to use money from its recently announced round of funding to open a research and development facility outside New York City, and it says it’s involved in four of the developing DAC hubs that were selected for funding awards by the DOE: the California Direct Air Capture Hub, the Western Regional DAC Hub, the Pelican-Gulf Coast Carbon Removal, and a fourth undisclosed one.

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HydrogenPro raises equity in private placement

Norway’s HydrogenPro has raised almost $8m in a private placement with international technology group ANDRITZ AG.

Norway-based HydrogenPro ASA has secured NOK 82.7m ($7.65m) in new equity through a private placement of new shares towards ANDRITZ AG, an international technology group listed on the Vienna stock exchange and one of the leading companies within green hydrogen plants and solutions.

HydrogenPro embarked on a new trajectory in August last year, expanding its presence in the United States and seeking strategic partnerships and alternative funding sources, according to a news release.

Jarle Dragvik, CEO of HydrogenPro, comments: “We are delighted to strengthen the ANDRITZ partnership as we continue to execute on our vision of delivering sustainable hydrogen solutions globally. They bring valuable industrial expertise as one of the leading actors within green hydrogen plants and solutions. Thanks to the partnership with Andritz and their EPC (Engineering, Procurement and Construction) capability, HydrogenPro will together with Andritz achieve full scope delivery, fulfilling requirements of many customers in the large-scale electrolysis sector.”

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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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Exclusive: Biomethane firm planning funding round

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

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

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

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

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

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

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

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

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

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

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EXCLUSIVE: 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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Aemetis capitalized for hydrogen and biofuel development plans

Aemetis CEO Eric McAfee said in an interview that the company has lined up financing to complete the $1.2bn in biogas and sustainable aviation fuel projects it has in development.

Aemetis is well capitalized to complete the $1.2bn in biogas and sustainable aviation fuel (SAF) projects it has in development, CEO Eric McAfee said in an interview.

Founded by McAfee in 2006 and listed on the NASDAQ in 2014, Aemetis plans to produce more than 60 million gallons per year of SAF and capture and sequester 125,000 mtpy of carbon in 2025. This is a diversification from existing ethanol, RNG and biodiesel operations in the US and India.

The company recently released an updated five-year plan including plans to generate $2bn of revenues, $496m of net income, and $682m of adjusted EBITDA by 2027.

McAfee, noting that Aemetis is well capitalized and has locked in financing for much of its plans, said, “The only thing we really need to do is just execute.”

For example, the company closed $25m of USDA loan guarantees in October at a 6.2% interest rate, McAfee said. The company has also signed a $125m USDA commitment letter for its Riverbank Biofuels Project in California, also called CarbonZero 1, which will produce SAF.

“We’ll be expanding that relationship with [the USDA],” McAfee said. “Everything else is financed.”

The Riverbank Biofuels Project has signed offtake agreements with major airlines, and the SAF segment is expected to be the biggest contributor to Aemetis’ revenues once the project is online in 2025, according to a presentation. Renewable diesel and SAF will add $348m of revenues in 2025 and $693.3m of revenues in 2026.

For its carbon sequestration projects, referring to upgrades at the existing Keyes ethanol plant in California and other operational assets, the company has an existing $100m line of credit provided by Third Eye Capital, $50m of which remains unused, McAfee said.

Projected revenues will allow the company to self-fund without new credit facilities, McAfee said. Revenues from Aemetis’ debt-free operations in India will also be available to fund new developments.

The Riverbank SAF plant will be fully engineered and permitted this year, McAfee said. Baker Hughes and ATSI are the company’s EPC partners on the new developments.

Aemetis has no plans to divest existing operational assets but could acquire California biogas assets, McAfee said. The company regularly talks to investment bankers.

McAfee is the largest single shareholder in Aemetis. JackBlock, the former US Secretary of Agriculture, sits on the company’s board. The largest institutional shareholder is BlackRock.

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