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Exclusive: Methanol electrolyzer start-up gearing up for seed capital raise

An early-stage technology company seeking to commercialize an electrolyzer that produces methanol from CO2 at ambient temperature and pressure is preparing its first capital raise.

Oxylus Energy, a methanol technology and project development start-up, is preparing to kick off its first capital raise later this month.

The Yale-based firm is seeking to raise $4m in seed funding, with proceeds funding the advancement of a production-scale CO2-to-methanol electrolyzer cell and its first commercial agreements for offtake, CEO Perry Bakas said in an interview.

Oxylus aims to commercialize an electrolyzer that creates methanol from CO2 at room temperature and pressure, and also plans to develop and operate its own methanol production plants, he said.

The technology, which will scale to larger versions in coming years, recently hit a key milestone with the validation of a 5cm2 platform.

The seed capital raise would provide approximately 26 months of runway, according to Bakas. The company would then raise between $20 – $30m in a follow-on Series A in late 2026.

“What we’re gonna do with the Series A is put that first electrolyzer into the ground,” he said. “It’ll be our first revenue-producing methanol.”

Oxylus is currently owned by Bakas and his fellow co-founders. The company has been entirely grant funded to this point. DLA Piper is advising as the law firm on the seed capital raise.

“I think the most important thing about the technology is it’s the most energy-efficient pathway to making renewable methanol,” he said. “At the right energy prices, you’re below cost parity with fossil-derived methanol. When that happens, I think it’ll become a very interesting development scenario.”

Oxylus is focused on bringing the so-called green premium down to zero, Bakas said, noting that it requires achieving scale in electrolyzer production or partnering with established electrolyzer manufacturers.

Methanol for shipping

Oxylus will seek to introduce its technology into target markets that are already using methanol as a feedstock, like high-value petrochemicals. In the longer term, shipping and aviation are likely to become attractive markets. Taken together, the company believes methanol has the potential to decarbonize 11% of global emissions.

Methanol will compete with ammonia for primacy as a shipping fuel in the future, but Bakas believes methanol is the better option.

“These are massive markets – they need a lot of solutions, and quickly,” he said. “But ammonia is not energy dense, and it doesn’t integrate with existing infrastructure.”

The International Energy Agency recently projected that while ammonia will be cheaper to make, methanol is easier to handle, resulting in roughly similar cost profiles for e-methanol and green ammonia. The added cost for methanol production, the report found, is likely to come from a scarcity of biogenic CO2.

On that topic, Bakas acknowledged that the methanol pathway still requires combustion of carbon, but emphasized his technology’s ability to displace existing fossil fuel-based methanol production.

“The distinction we need to make is: are these virgin hydrocarbons or are they recycled hydrocarbons? If you’re just continuously pumping new CO2 out of the ground into the atmosphere, you’re gonna continue to cause climate change,” he said.

“The technologies that we are building in this suite of technologies that cover direct air capture, point source capture, carbon conversion, that whole CCUS world,” he added, “are really working to monitor and create a homeostasis in the atmospheric balance of CO2.”

Oxylus recently completed a lifecycle assessment of greenhouse gas emissions, Bakas said, finding that its fuels are expected to reduce CO2 emissions by 95% at optimal voltage compared to natural gas steam methane reforming.

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Braya issues green hydrogen provision RFP

The Canadian company has plans to use green hydrogen as a feedstock and to export green ammonia to domestic and international offtakers.

Braya Renewable Fuels has issued an RFP for the provision of green hydrogen as a feedstock for its refinery operations in Come By Chance, Newfoundland and Labrador, according to a press release.

Proposals are to be submitted by 19 December of this year.

Braya could also export green ammonia to local, regional, and international markets. The company is now repositioning the facility to produce renewable diesel and sustainable aviation fuel (SAF).

“Our production of renewable diesel requires substantial amounts of hydrogen feedstock every year,” the release states. “Braya has existing access to grey hydrogen; however, to produce the lowest carbon intensity rating possible, Braya is interested in acquiring green hydrogen to support its operations.”

At approximately 35,000 metric tons, the project would be the largest domestic green hydrogen project in Canada to date.

The operational footprint of the refinery, ample access to water, and existing infrastructure mean that production could be scale beyond Braya’s operational needs.

“Braya is open to capitalizing on potential opportunities with the successful proponent to scale green hydrogen and green ammonia production, storage, and handling to serve a larger market audience,” the release states. “… we have issued this RFP to solicit parties to support us with developing and exploring this opportunity.”

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Canadian firms advancing compressed natural gas trucking corridor

Tourmaline Oil Corp and Clean Energy Fuels have committed CAD 70m to build and operate a network of compressed natural gas stations across Western Canada.

Tourmaline Oil Corp. and Clean Energy Fuels Corp. announced today a CAD 70m Joint Development Agreement to build and operate a network of compressed natural gas (CNG) stations along key highway corridors across Western Canada.

Through this 50-50 shared investment, Tourmaline and Clean Energy expect to construct and commission up to 20 CNG stations over the next five years, which will allow heavy-duty trucks and other commercial transportation fleets that operate in the area to transition to the use of CNG, a lower carbon alternative to gasoline and diesel.

Clean Energy will operate the stations. One of North America’s largest logistics companies, Mullen Group Ltd. has indicated its support for the initiative as an early adopter and expects to use the network of stations to fuel its growing fleet of CNG-powered trucks.

“Tourmaline is Canada’s largest natural gas producer, and innovation is at the heart of everything we do. So this partnership with Clean Energy is a natural fit,” said Michael Rose, chairman, president and CEO, Tourmaline. “Across our operations, we have achieved significant emission reductions and cost savings by displacing higher-emitting fuels with natural gas. Thanks to this exciting initiative, we’re able to help the transportation industry do the same.”

This initiative will develop critical infrastructure needed to support the adoption of lower-carbon natural gas fuels that are commercially available today. The use of this domestic, abundantly produced and easily distributed resource is expected to result in significant carbon dioxide (CO2) emission reductions and cost savings for the transportation industry in Canada. Currently, fueling vehicles with CNG results in up to 50% cost savings when compared to retail diesel prices, on an energy equivalent basis. These CNG stations also pave the way for renewable natural gas (RNG) availability in the future, as the same fueling-station infrastructure that dispenses CNG can be used to dispense RNG.

“Clean Energy currently operates the most extensive network of natural gas fueling stations and is the largest distributor of RNG in North America. We continue to invest in upstream production of RNG and the fueling infrastructure needed to provide the trucking industry a cleaner alternative of operating,” said Andrew Littlefair, president and CEO, Clean Energy. “This new partnership with Tourmaline will provide Canada’s trucking industry with an economical, convenient, and sustainable pathway to net zero and will contribute to Canada’s overarching climate change goal.

“As one of North America’s largest logistics providers, the Mullen Group is committed to being a leader in sustainability. We are excited to support this initiative. We have already made a significant investment in CNG trucks and are extremely confident that this technology will play a huge role in the decarbonization of our industry,” said Murray Mullen, chair, SEO and president, Mullen Group.

Based on the anticipated commissioning of up to 20 stations over the next five years, approximately 3,000 natural gas-powered trucks could be fueled using CNG every day, resulting in a reduction of approximately 72,800 tonnes of CO2 equivalent usage per year. This is equivalent to removing 15,690 passenger vehicles from the road. As future demand increases, the capacity of these stations can be expanded, and new stations added, which would result in greater environmental performance improvement.

The first station expected to be jointly owned under the agreement, located north of Edmonton, is operational and well-positioned for heavy-haul transport routes with close proximity to key customers and stakeholders. The next stations which Tourmaline and Clean Energy expect to commission in the first half of 2024 are anticipated to be located within the municipalities of Calgary and Grande Prairie in Alberta and Kamloops, B.C.

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OMERS exec joins CCS project developer

Former managing partner and head of ventures at OMERS Ventures Damien Steel has joined a Montreal-based CCS developer as CEO.

Deep Sky, a Montreal-based venture commercializing carbon removal and storage solutions at scale, today announced that Damien Steel will take the helm as CEO.

Most recently, Steel served as managing partner and global head of ventures at Toronto-based OMERS Ventures (OV), part of one of Canada’s largest pension plans. There, he was responsible for investments, fund operations, and strategic global oversight of the group. During his tenure, he tripled the size of the platform to $2.5bn in assets while generating strong growth. Previously, he held roles with BridgeScale Partners and EdgeStone Capital Partners. Before joining OV, Damien was a healthcare entrepreneur, founding and selling a digital dental laboratory startup. He also serves on the board of tech disruptors, including Hopper, TouchBistro, Hootsuite and DuckDuckGo. Alongside his new CEO role at Deep Sky, Damien will remain a senior advisor to OMERS Ventures.

Steel brings significant finance, climate, infrastructure, and corporate governance experience in the highly regulated Canadian pension business to the position. In 2022, he led the early stage investment into a Toronto-based climate tech startup and gained first-hand insight into how businesses globally are prioritizing climate risk. Steel also led OV’s largest and most successful investment in travel app, Hopper, also started by Deep Sky founders Fred Lalonde and Joost Ouwerkerk. Through his work with Hopper in recent years, Damien has become increasingly committed to tackling the climate crisis.

“For nearly two decades I’ve had the privilege of supporting world class founders in their efforts to build world class companies,” said Steel. “At Deep Sky, I hope to apply all that I’ve learned from these great visionaries to what I believe is the greatest challenge facing humanity today – climate change inaction.”

“Building an ambitious company to reverse climate change requires an equally ambitious, big thinker at the helm,” said Deep Sky Co-Founder Fred Lalonde. “Damien is a proven visionary, leader, fundraiser, and operator who can catapult Deep Sky’s growth to meet the urgent threat that climate change presents. In working together since 2012, he’s demonstrated an uncanny knack for spotting the next moonshot that withstands the test of time. I’m pleased that he’s recognized Deep Sky as his next big bet.”

Deep Sky is working to build large-scale carbon removal and storage infrastructure in Canada. Acting as a project developer, the company is bringing together the most promising direct air and ocean capture technologies to deliver the largest supply of high quality carbon credits to the market. Powered by renewable energy, Deep Sky’s facilities are strategically located in Quebec, a region with an abundance of hydroelectric power, immense wind power potential and a vast territory with the rich geological makeup required for carbon capture.

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Exclusive: Ambient Fuels options land in Texas

Ambient Fuels recently entered into an option agreement to purchase land in Texas. Among only a handful of green hydrogen developers to attract equity capital last year — from Generate Capital — Ambient has not yet made public announcements about its projects or locations. 

Ambient Fuels, a green hydrogen developer backed by Generate Capital, recently signed a 24-month option to purchase a plot of land in Chambers County, Texas, according to filings made with the clerk there.

A memorandum outlines the option to purchase land in Mont Belvieu, to the east of Houston. The agreement is effective as of October 2, according to the filing.

Ambient declined to comment.

According to the ReSource project tracker, Ambient has been involved in three Gulf Coast hydrogen hub efforts: The Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES) hub; the Port of Corpus Christi Green Hydrogen Hub; and the Horizons Clean Hydrogen Hub (HCH2). ARCHES was selected for DOE funding.

ReSource reported in June that Ambient Fuels had begun to evaluate potential acquisitions of hydrogen projects that are under development.

In May, 2023, Generate Capital, a sustainable infrastructure investment and operating company, made an investment into Ambient, including a commitment to fund up to $250m of green hydrogen infrastructure.

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US clean fuels producer prepping equity and debt raises

A Texas-based clean fuels producer is close to mandating an advisor for a platform equity raise. It has already tapped Goldman Sachs to help arrange a cap stack in the billions for a project in Oregon.

NXTClean Fuels, a Houston-based developer of clean fuels projects, is preparing a $50m to $100m platform equity raise in the near term and has large debt and equity needs for a pair of projects in Oregon, CEO Chris Efird said in an interview.

The company is close to engaging a new financial advisor for the raise, which will launch late this year or early next, Efird said.

Port Westward

Meanwhile, Goldman Sachs’ post-carbon group is retained for the capital stack on NXTClean’s flagship project at Port Westward, at the Port of Columbia County, Efird said. The $3bn CapEx (including EPC) project is fully permitted by the State of Oregon and is awaiting one federal Clean Water Act permit. An Environmental Impact Statement is expected this fall.

The project is dedicated to producing a split of renewable diesel and SAF, amounting to roughly 50,000 barrels per day total permitted capacity when fully operational.

FID is expected for roughly August 2024, he said. About 30 months from FID the plant will reach COD.

“What we’re most focused on right now is the true senior debt,” Efird said. On the equity side the company is engaged with strategic partners that have indicated interest in post-FID equity.

NXTClean has conversations ongoing with the Department of Energy’s Loan Programs Office, along with commercial project finance lenders.

Red Rock

In April NXTClean acquired what was the Red Rock Biofuel facility in Lakeview, Oregon. That woody biomass-to-SAF facility foreclosed after $425m in investment, following technical and financial issues brought on by the COVID 19 pandemic. NXTClean purchased the facility for $75m in preferred stock at auction on the courthouse steps.

GLC advisors was retained by lead bondholder Foundation Credit to advise on that process, Efird said.

Red Rock is being repurposed to produce carbon-negative RNG for the adjacent Tallgrass Ruby Pipeline, Efird said. The fully-permitted project has a significant amount of equipment already installed or on skids.

A first phase will require a spend of $100m to $150m. Some $50m of equity will augment a balance of debt, raised in part through USDA programming, Efird said. Cash flow from the first phase will help with the second phase, which will bring the capital needs of the facility up to as much as $400m.

Looking forward

Geographically, NXTClean will expand in the Pacific Northwest and British Columbia, Efird said.

Each of NXTClean’s two projects are held by a separate subsidiary. The company has a third subsidiary called GoLo Biomass that focuses on feedstock aggregation, Efird said. It engages with fish processors in Vietnam and used cooking oil suppliers in South Korea to augment supply from large companies.

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Siemens Energy NA executive priming for scale in hydrogen

The North American wing of the global technology company is in the earliest stages of engaging EPC providers and economic development officials for its next US electrolyzer manufacturing site, Richard Voorberg, president of Siemens Energy North America, said in an interview.

To say the demand for electrolyzer capacity has grown exponentially in 2022 comes across as an understatement, as customers in industry and energy have increased their orders multiple times over.

Siemens Energy North America’s electrolyzer – which is 18 MW and among the largest in the market – was too large for many customers just a year ago, Richard Voorberg, president of Siemens Energy North America, said in an interview. But following passage of the IRA, the question became how many the customer could get – and how fast.

“How quickly can I get 100 of your electrolyzers?” Voorberg said he hears now, whereas before that same customer might have asked for half an electrolyzer.

The decision to make an electrolyzer as large as 18 MW was part of the company’s strategy to have bigger capacity as the market for hydrogen expanded, Voorberg said.

HIF Global recently said it has tapped Siemens Energy to engineer and design their proprietary “Silyzer 300” electrolyzers to produce approximately 300,000 tons per year of green hydrogen at an eFuels facility in Texas.

Siemens Energy NA is now in the earliest stages of developing a new electrolyzer manufacturing plant in the United States, as previously reported by ReSource.

The US plant will be similar to the plant Siemens Energy is building in Berlin, and won’t be built until after Berlin is completed, Voorberg said.

The company is actively engaging with state economic development committees to scout locations, incentives and labor supplies. It is also in the early stages of engaging engineers, EPC providers and other development partners, Voorberg said.

“We also need to decide in the next few months what we want to do in-house, with our own shops, versus what we want to outsource,” Voorberg said.

North Carolina, Houston, Alabama and upstate New York are all in Siemens Energy’s existing footprint and are as such strong contenders for the new facility, Voorberg said, though nothing is set in stone as far as location. The company would finance the facility within its normal capex expenses within a year.

In electrolyzer manufacturing there is some “test hydrogen” that is produced, so there will be a need to find some small offtaker for that, Voorberg said. The company could also use it to supply its own fork-trucks in the future.

Open to acquisitions

Diving into an acquisition of another electrolyzer manufacturer probably would not make sense for Siemens Energy, Voorberg said. But the company is open to M&A.

He cited the acquisition of Airfoil Components in Florida as the type of deal that the company could move on again. In that case, the target company had expertise in casting that was easier to acquire than build from scratch.

“Does that make more sense that we buy it, that we outsource it, or should we be doing something like that ourselves?” Voorberg said are questions he often asks.

“When it comes to less complicated things, like a commodity market, that’s not something we play well in or need to play well in,” Voorberg said. “When it comes to a specialty design-type product, that’s where we at Siemens Energy shine.”

Right now, the Siemens Energy parent company has a bid out to acquire the third of Siemens Gamesa, the Spanish-listed wind engineering company, that it does not own, Voorberg noted.

Start-up opportunity

Siemens Energy, through its in-house venture capital group and partnerships with US universities, is interested in helping technology startups scale, Voorberg said.

“We can play in between them and the customers and do the introductions and potentially even partner in with some of our technology,” he said.

The company keeps close relationships with incubators at Georgia Tech and the University of Central Florida, among others, Voorberg said.

Equity investments will be made through the VC group, Voorberg said, noting that effort as one that is strategic in growing the energy transition, rather than financial.

Additional non-equity partnerships, similar to the fellowship with the Bill Gates-founded Breakthrough Energy, are on the table as well.

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