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FAA opens $300m funding opportunity for SAF projects and aviation technology

The application window is open until November for $245m in SAF infrastructure projects and $47m in low-emission aviation technology projects.

The Federal Aviation Administration announced nearly $300 million in funding for projects to help achieve America’s goal of net-zero emissions from aviation by 2050 as part of President Biden’s Investing in America Agenda.

The application window is now open for $245m in sustainable aviation fuels (SAF) infrastructure projects and $47m in low-emission aviation technology projects. The funding comes from the Inflation Reduction Act.

“We have a need for speed in this race, and thanks to President Biden’s Investing in America agenda, we have more resources than ever before to accelerate this critical work,” said FAA Assistant Administrator for Policy, International Affairs and Environment Laurence Wildgoose. “We look forward to receiving applications that can help accelerate the use of high-integrity SAF and the development of powerful low-emission aviation technologies.”

The new Fueling Aviation’s Sustainable Transition (FAST)-SAF grants will focus on producing, transporting and blending sustainable aviation fuel. These projects will build up regional SAF supply chains and increase SAF use.

FAST-Tech funds will accelerate aviation technology projects that reduce greenhouse gas emissions, improve aircraft fuel efficiency and increase the usage of sustainable aviation fuel. Eligible entities for the program are broad. They include airports, air carriers, universities, aviation and aerospace companies, state and local governments and nonprofit organizations.

The competitive grant process opens on Sept. 25. The FAA’s target for the first round of grant awards is mid-2024. Read the Notice of Funding Opportunity here.

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Fuel cell startup raises seed capital

The capital will be used to expand on the team’s growth with engineers coming from Siemens Energy, Argonne National Lab, and The US Navy, among other places.

Celadyne, a decarbonization and hydrogen solution company, has raised $4.5m in seed investment funding. The round was co-led by Maniv and Dynamo Ventures, with major participation from EPS Ventures, according to a news release.

The company collaborates with fuel cell and utility firms, offering efficient hydrogen solutions to heavy-duty industries such as energy, manufacturing, and transportation. Celadyne’s advanced technologies effectively convert hydrogen to usable energy through compact, easy-to-use fuel cells that seamlessly integrate.

“At Celadyne, our mission is simple: unlocking the true potential of hydrogen,” says Gary Ong, Ceo & Founder at Celadyne Technologies. “This new funding will accelerate our product in the market as we aim to decarbonize industries like transportation and manufacturing, offering a cost-effective route for green hydrogen production. Our goal is to embrace these industries, helping them contribute positively to the planet.”

Specifically, Celadyne’s materials and technologies replace the proton exchange membrane to create fuel cells that are more durable, and electrolyzers that are more compact and efficient. This newfound durability allows fuel cells to be utilized as an environmentally-friendlier alternative to diesel engines, and makes electrolyzers that produce low cost green hydrogen as fuel.

This latest funding will expand upon capital from Shell Ventures, Sputnik ATX, the Third Derivative Accelerator, and Sandy Spring Climate Partners. Celadyne has been publicly and financially supported for their world-changing hydrogen applications through grants from the US Department of Energy, National Science Foundation, ARPA-E, and Department of Defense – AFWERX. These entities, along with Celadyne’s customers, who are Tier 1 automotive leaders shaping the future of mobility worldwide, believe that advanced materials hold the key to unlock the full potential of hydrogen.

This latest funding will expand upon previous capital from Shell Ventures, Sputnik ATX, and the Third Derivative Accelerator and Sandy Spring Climate Partners. The capital will be used to expand on the team’s growth with engineers coming from Siemens Energy, Argonne National Lab, The US Navy, Micron Technologies, Hyzon Motors, and Northwestern University. The team will support the ongoing development of Celadyne’s materials technology, to create even better fuel cells and expand its usage in electrolysis across its growing list of clients across the US. By year end, Celadyne expects to double its customer base and these developments will open up a whole new world for green energy applications in industries that are historically some of the harshest on the environment.

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Clean fuels developer in negotiations to finance West Texas projects

MMEX is in negotiations with international banks to raise capital for green and blue ammonia projects as well as a clean fuels refinery in West Texas.

MMEX, a developer of clean fuels projects, is talking with international banks to raise debt and equity for green and blue ammonia projects as well as a clean fuels refinery in West Texas.

Fort Stockton, Texas-based MMEX is seeking to advance both green and blue hydrogen projects on the same site in Pecos County, with the green hydrogen project expected to cost between $850m – $900m at “2x capacity,” according to a company presentation.

Meanwhile, estimated capex for the blue hydrogen project is $1.25bn, according to a separate presentation.

MMEX, which is led by oil industry veteran Jack Hanks, recently tendered to provide 209,300 tons of green ammonia, equivalent to 25,000 tons of delivered hydrogen, to an oil major and chemical company. The green hydrogen would be produced on site and transported via rail to Corpus Christi.

MMEX has partnered with TotalEnergies to provide solar power for both the green and blue projects. 

For the green hydrogen project, MMEX says it would install seven Siemens Sylizer electrolyzers rated at 17.5 MW each, producing 55.4 tons of green hydrogen, or 209 tons per day of ammonia.

The company estimates a 24-month construction to COD timeline from financial close for the green hydrogen project.

The blue hydrogen project, with an estimated 30-month construction timeline, would produce 450 tons per day via Topsoe auto thermal reformer. 

Additionally, MMEX is seeking to construct a clean fuels refinery which would take in crude oil and produce gasoline and ultra-low-sulfur diesel.

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IEA report outlines case for cost reductions in e-fuels

The International Energy Agency assesses needed cost reductions, resources and infrastructure investments for achieving a 10% share of e-fuels in aviation and shipping by 2030.

The International Energy Agency’s report on the role of e-fuels in decarbonizing transport finds that e-fuels’ cost gap with fossil fuels could substantially reduce by 2030, an important finding for the advancement of a family of emerging e-fuel technologies. 

In the report, which was published last month, the IEA aims to assess the implications of growth in e-fuels in terms of needed cost reductions, resources and infrastructure investments of an assumed goal of achieving a 10% share of e-fuels in aviation and shipping by 2030. 

For instance, the cost of low-emission e-kerosene might drop to $50/GJ ($2,150 per ton), making it competitive with biomass-based sustainable aviation fuels – but still 2 – 3x more expensive than fossil-based fuels. 

The costs for low-emission e-methanol and e-ammonia could also decrease, opening the door for their use as low-emission fuels in shipping. Interestingly, the production of e-fuels for aviation will also result in a significant amount of e-gasoline as a by-product, the report notes.

In terms of impact on transport prices, a 10% share of low-emission e-fuels would only modestly increase the cost of transport, according to the report. For example, e-kerosene would raise the ticket price of a flight using 10% of e-fuels by only 5%. 

However, the adoption of e-methanol and e-ammonia in shipping will necessitate significant investments in infrastructure and ships. The overall cost for a fully e-ammonia or e-methanol-fueled container ship would be 75% higher than a conventional fossil-fuel-powered ship, yet this represents just 1-2% of the typical value of goods transported in these containers.

The production of e-fuels generally suffers from low efficiency due to multiple conversion steps and losses, leading to high resource and infrastructure demand, according to the report. Producing significant amounts of low-emission e-fuels could increase the demand for renewable electricity by about 2,000 TWh/yr by 2030. This represents about one-fifth of the growth of low-emission electricity expected in this decade under certain policy scenarios. 

The production of e-fuels can exploit the potential of remote locations with high-quality renewable resources and vast land available for large-scale projects. However, achieving a 10% share of e-fuels in aviation and shipping would require a significant increase in electrolyser capacity, equivalent to the entire size of the global electrolyser project pipeline to 2030.

The accelerated deployment of low-emission e-fuels for shipping would require substantial investments in refueling infrastructure and vessels, especially for e-ammonia or e-methanol. Achieving a 10% share in shipping would demand approximately 70 Mt/yr of these fuels. The financial investment in shipping capacity and bunkering infrastructure would be substantial, yet represent less than 5% of the cumulative shipbuilding market size over the period 2023-2030.

Producing carbon-containing low-emission e-kerosene and e-methanol would necessitate a massive increase in CO₂ utilization, with significant potential synergy with biofuels production. Around 200 Mt CO₂ would be required for a 10% share of e-kerosene in aviation and 150 Mt CO₂ for the same share in shipping if using e-methanol. 

Access to CO₂ is a major constraint for carbon-containing low-emission e-fuels, and the best wind and solar resources are not always co-located with significant bioenergy resources. Direct air capture (DAC) of CO₂ could provide an unlimited source of CO₂ feedstock without geographic constraints, but it is expected to remain a high-cost option in 2030, the report projects.

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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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Low-carbon crude refinery developer lining up project cap stack

The developer of a low-carbon crude refinery is in talks with banks and strategics to line up project financing for a $5.5bn project in Oklahoma.

Texas-based Southern Rock Energy Partners is holding discussions with banks and potential strategic investors with the aim of shaping a $5.5bn capital stack to build a low-carbon crude refinery in Cushing, Oklahoma.

The project, a first-of-its-kind 250,000 barrel-per-day crude refinery, would make it the first crude facility of that size built in the United States in several decades.

The company is evaluating a project finance route with a debt and equity structure for the project, and has held talks with several major investment banks as well as “industry-leading” strategics in midstream, industrial gas, and electricity generation, Southern Rock Managing Partner Steven Ward said in an interview.

In support of the refinery, the city of Cushing and the Cushing Economic Development Foundation approved $75m in tax-exempt private activity bonds, Ward noted. He added that the company could also tap industrial revenue bonds as well as PACE equity financing.

Seed capital for project development has so far come from strategic partners, some of which are operational partners, Ward said. He declined to comment further on the capital raise, noting that engagement letters have yet to be signed.

Engineering firm KBR is conducting a feasibility study for the Cushing project, and the company is moving through land acquisition, air permit preparation, and EPC selection, Ward said.

While most crude refineries consume natural gas, off-gasses, and ambient air, Southern Rock’s proposed refinery would use oxygen along with blue hydrogen produced from the refining off-gasses and green hydrogen from electrolysis. The process would eliminate 95% of greenhouse gas emissions at the proposed refinery.

“Our furnaces and our process heating units are fed 100% hydrogen and oxygen,” Ward said, noting that this type of system does not currently exist in the market. The company is expanding on technology it licenses from Great Southern Flameless, he said.

The size of the refinery would make it the largest to be built in the US since Marathon Petroleum built a 200,000 barrels-per-day facility in 1976.

Certain other low-carbon crude projects have been in the market for several years. Meridian Energy has been seeking to build cleaner crude refineries in North Dakota. Raven Petroleum ran up against environmental concerns while seeking to build a clean refinery in Texas. And MMEX is aiming to build an “ultra clean” crude refinery in West Texas.

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Green hydrogen developer raising capital for projects

Fusion Fuel, a green hydrogen developer based in Portugal, has engaged an advisor and is in talks with investors to raise capital for projects in North America.

Fusion Fuel, a green hydrogen developer based in Portugal, has engaged an advisor and is in talks with investors to raise capital for projects in North America.

The company is working with RBC Capital Markets as financial advisor, Fusion Fuel Co-Head Zachary Steele said in an interview, and expects to produce infrastructure-type returns on its projects.

For its first project in the U.S., Fusion Fuel has agreed to a JV with Electus Energy to build a 75 MW solar-to-hydrogen facility in Bakersfield, California.

The project will produce up to 9,300 tons of green hydrogen per annum including nighttime operation and require an estimated $180m in capital investment, with a final investment decision expected in early 2024 and commissioning in the first half of 2025.

The combination of green hydrogen and solar production incentives along with California’s low carbon fuel standard make the economics of the project attractive, Steele said.

“Hydrogen is selling for up to $15-$18 per kilogram in California in the mobility market, and we can produce it at around the low $3 per kilogram area, so that leaves a lot of room for us to make a return and reduce costs for customers,” he said.

The company sells electrolyzer technology for projects but also serves as a turnkey developer. The technology consists of Hevo-Solar, which utilizes concentrated solar power to create hydrogen; and Hevo-Chain, a centralized PEM electrolyzer powered by external electricity.

Fusion Fuel’s proposition is that its smaller-scale technology – of 25 kW per unit –  is ready to use now, and can be dropped into places like a gas station in New York City, Steele said.

“This allows customers to scale into hydrogen and makes it available on site, compared with the massive projects going up in Eastern Canada or the Gulf Coast that require customers to commit significant capital to underwrite large scale projects,” he added.

Along with Electus, Fusion Fuel has already entered into a land-lease agreement for 320 acres in Kern County, California for the Bakersfield development. Black & Veatch will perform a concept study while Cornerstone Engineering and Headwaters Solutions are also engaged.

Iberian pipeline

The company targets to have EUR 40m of revenues in 2023, with a third of that coming from tech sales and the balance coming from Fusion Fuel-owned development projects.

Its revenue pipeline for next year is focused on the Iberian peninsula, and has been largely de-risked with the company having secured grants, with land and permitting underway.

In addition to the electrolyzer sales, the company, together with its partners, can provide turnkey projects that include engineering, procurement of the balance of plant equipment, construction of the facility, and operations, Steele said on an investor call this week.

“This allows us to not only make returns on the tech sale but also on the overall project and potentially recurring revenue from operations,” he said.

The company plans to use projects it is building in Portugal to expand into other core markets, beginning with a focus on mobility opportunities and targeted industrial decarbonization projects. Starting in 2024 the company plans to extend its reach further into North America and also Italy.

U.S. focus

Similar to other international hydrogen players, the passage of the Inflation Reduction Act caused a strategic shift of focus to the U.S. and accelerated Fusion Fuel’s plans to grow its business there, company executives said.

Notably, since Fusion Fuel will use its own technology in the projects it is seeking to develop, a required amount of that technology will need to be manufactured in the U.S. in order to qualify for the full benefits provided in the IRA.

As such, Fusion Fuel is scouting for a location to build one, or possibly two, manufacturing facilities in the U.S.

“The size of the Bakersfield project alone justifies building a new manufacturing facility,” Steele said on the investor call.

Steele was previously CEO of Cedar LNG, a floating LNG development in British Columbia, prior to exiting to Pembina. He works alongside Fusion Fuels Co-Head & CFO, Frederico Figueira de Chaves, who is based in Portugal.

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