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Fluor and Carbfix collaborating on CCS solutions

The companies look to partner with clients looking for end-to-end CO2 reduction. An MOU enables the two companies to pursue CO2 removal projects like direct air capture and bioenergy CCS.

Fluor Corporation has signed an MOU with Carbfix, the CO2 mineral storage operator, to pursue CCS solutions, according to a news release.

Together the companies look to decarbonize hard-to-abate industries like steel, aluminum and cement.

“The companies will leverage their respective expertise to partner with clients looking for end-to-end CO2 reduction,” the release states. “The MOU also enables the two companies to pursue CO2 removal projects such as direct air capture and bioenergy carbon capture and storage.”

Fluor will provide its proprietary carbon capture technology and EPC. Carbfix’ technology dissolves CO2 in water and injects it into porous basaltic rock formations, where natural processes cause the CO2 to form stable carbonate minerals within two years.

Carbfix has applied its method of turning CO2 into stone underground for more than a decade in Iceland. The company currently captures and mineralizes one-third of the CO2 emissions from Iceland’s largest geothermal power plant, with the goal of increasing this rate to 95% by 2025.

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Technology in focus: Drilling down on geologic hydrogen

Some three decades after accumulations of geologic hydrogen were first discovered, investors and federal regulators are starting to pour resources into figuring out how to extract it – and make it profitable, Bianca Giacobone reports.

What if, instead of extracting oil and gas from the ground, we could extract hydrogen, and tap into what was likely the original energy source for life on Earth to solve the net-zero problem for the future?

Geologic hydrogen is naturally occurring hydrogen that exists in subsurface deposits and has all the net-zero properties of the green hydrogen the clean fuels industry is laboring to produce. Also known as white hydrogen or natural hydrogen, it was discovered with a flare of it caught fire in Mali, in 1987. But only recently, amid the hunt for as many renewable resources as possible, have money movers started paying attention.

In February, Koloma, a geologic hydrogen start-up, announced it had raised over $245m in Series B funding from investors such as Breakthrough Energy Ventures, United, and Amazon’s Climate Pledge Fund. And the U.S. Department of Energy awarded $20m to 16 projects exploring the topic through ARPA-E, the agency that supports the research and development of high-risk, high-reward energy technologies.

The same month, Pete Johnson, Koloma’s CEO, testified at a dedicated Senate Committee on Energy and Natural Resources hearing. “Geologic hydrogen is domestic primary energy,” he said. “All other forms of hydrogen require more energy to produce than the hydrogen itself holds. But geologic hydrogen is a source of energy.”

High risk, high reward

Given the amount of resources going into establishing myriad types of hydrogen production around the world, it could be more convenient to drill and extract hydrogen from the ground – a resource that is plentiful, if hard to estimate, according to scientists.

“If we look at the most probable value, it’s maybe 5 million megatons” said Geoffrey Ellis, who leads the U.S. Geological Survey’s research on geologic hydrogen resources, referring to the unit for one million metric tons. “Just a small fraction of that, one or two percent, could actually provide all of the hydrogen that we would need to get to net zero for hundreds of years.”

The related technology and research is in its early stages – something that was reiterated multiple times during the February Senate hearing – but it could be prime time for investors with an appetite for high risk-high reward investments.

The first exploratory well was drilled in Nebraska in 2019 by the start-up Natural Hydrogen Energy, and since then the number of companies active in the space has grown from two to around 50, according to data collected by Viacheslav Zgonnik, a geochemist and CEO of Natural Hydrogen Energy.

“Most of the areas where we estimate there is hydrogen are available,” said Zgonnik. “So right now it's a good moment to invest for cheap.”

By the end of the year, the U.S. Geological Survey plans to release an initial map with the best locations to start doing more detailed geologic hydrogen exploration in the United States, and ARPA-E plans to have a completed GREET model for GHG life cycle analysis, which is expected to confirm geologic hydrogen’s low GHG emissions and qualify it for 45V tax credits.

According to sources active in the space, the tax credits are essential to kickstart a new geologic hydrogen industry that, like most new industries, is bound to have some uneconomical moments in its early stages. Indeed, a group of geological hydrogen producers co-signed a comment letter to the US Treasury as part of the 45V rulemaking process, urging the adoption of geologic hydrogen within the 45VH2-GREET model and a “predictable and speedy” process for determining provisional emissions rates for hydrogen production technologies that are not represented in the model.

Dig deeper

Preliminary data by the U.S. Geological Survey suggests that hydrogen could be in some areas along the East coast of the United States, as well as on the mid-continental rift (Kansas, Nebraska, Iowa, Minnesota up into Canada and then down into Michigan) and much of the Pacific Northwest, according to Ellis.

That’s where iron rich rocks known as ultramafic can be found, which, when hit with water, produce hydrogen gas.

“Ultramafic rocks are currently known to produce significant hydrogen,” said Tucker Ely at 39 Alpha Research, one of the teams that received ARPA-E funding. “But the Earth's surface maintains a large diversity of other rocks with hydrogen-producing potential, and we will be exploring many of these in this project.”

Ultramafic rocks, however, are, for the most part, on ocean floors, which are hard and expensive to access. 39 Alpha Research specializes in mathematical techniques that determine how much hydrogen is contained in different compositions of rock and water, hoping to find the most economical system and provide guidance to companies on where to drill their wells.

The nonprofit’s interest in geologic hydrogen was spurred by projects for producing hydrogen funded by NASA.

“It's wild that NASA was funding research to understand the solar system and other worlds, and that the tools we made along the way are going to help us understand an alternative fuel source and really drive a clean energy transition,” said Cole Mathis at 39 Alpha Research.

Which rocks, which fluids, where, the presence of geologic hydrogen accumulations large enough to be commercial, and what the production rates will look like are some of the many unknowns that make geologic hydrogen a risky scenario for investors.

“The only way to answer those questions is to drill,” said Zgonnik. “And the only way to drill the wells is for investors to fund the drilling. We don't have much time and natural hydrogen can give us speed, because we can leverage existing infrastructure from oil and gas industries.”

In addition to Natural Energy Hydrogen’s exploratory well in Nebraska, companies like Koloma and HyTerra have also started drilling in the Midwest the past couple of years, the latter through its Project Nemaha, in Kansas, which could produce between 111,738 and 565,390 tonnes of hydrogen, according to a prospective resource assessment released in December 2023.

For the project, the assessment also estimated between 37 and 1,629 million metric cubic feet of recoverable helium, a gas that can be found with hydrogen, and is 25 times more expensive by unit of volume, a strong economic incentive for hydrogen exploration.

Even if it all ends up not working out in the end, scientists say its potential is enough to dig deeper.

“Last time we developed a new source of energy was 100 years ago with nuclear energy,” said Zgonnik. “This is something else, it’s something new, an additional source of primary energy, of which there are a very limited number.”

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Gevo awarded USDA grant for carbon tracking

A grant of up to $30m will support tracking the carbon intensity of corn destined for SAF production.

Gevo, Inc. announced today it has finalized and executed a Notice of Grant and Agreement Award with the U.S. Department of Agriculture (USDA) for a Partnerships for Climate-Smart Commodities grant of up to $30m for Gevo’s Climate-Smart Farm-to-Flight Program, according to a news release.

This program is aimed at tracking and quantifying the carbon-intensity (CI) impact of climate-smart practices while creating market incentives for low CI corn to help accelerate production of sustainable aviation fuel (SAF) and low-CI ethanol.

With the leadership and support of the USDA, we believe this grant will play a pivotal role in expediting the adoption of climate-smart farming practices and immediate market expansion of field-tracked, low-CI corn destined for SAF production in the area surrounding Gevo’s previously announced Net-Zero 1 (NZ1) SAF plant, currently under development in Lake Preston, South Dakota. The project will also accelerate the market adoption for climate-smart corn in close collaboration with Southwest Iowa Renewable Energy (SIRE), a dry-mill corn-based ethanol facility located near Council Bluffs, Iowa. An important part of the project is our aim to enroll majority female-owned farms in southeast Iowa and southeast Nebraska and Native American tribal organizations in South Dakota, including the Standing Rock Sioux Tribe.

“Our Farm-to-Flight Program, under this USDA grant, aims to count all the carbon at the field level and reward farmers on a performance basis for delivering low-CI corn, as well as to accelerate the production of SAF to reduce dependency on fossil-based fuel,” says Dr. Paul Bloom, Chief Carbon Officer and Chief Innovation Officer for Gevo, and Head of Verity. “The program will also focus on deploying our Verity Tracking platform with farmers to help them measure, report and verify their CI reductions.”

Gevo believes that the Argonne National Laboratory GREET model is the best available standard of scientific-based measurement for life cycle inventory or LCI. Verity, a Gevo program, uses the high-quality field and process level data, and the versatility of GREET to calculate the commodity’s carbon performance with a high degree of confidence that is traceable, immutable, and fully auditable. “The Verity carbon accounting platform will give us the ability to assign carbon-intensity scores to feedstocks on a field-by-field basis – creating financial grade climate smart commodities that carry their performance through the supply chain to the final biofuel products,” Bloom says. “This grant will help us apply the best science and reward growers for making a real difference to lower GHGs of biofuels.”

“When Net-Zero 1 and other production facilities come online, the feedstocks in the program will be a key to the equation,” says Dr. Patrick Gruber, CEO of Gevo. “This Partnerships for Climate-Smart Commodities grant will help ensure we count all the carbon through the entire business system and reward farmers for the good work they are doing.”

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OCI CEO: Blue ammonia as maritime fuel could hit $900 per ton

OCI executives today touted the prospects for their Texas blue ammonia plant, the only such project currently under construction in the US. They were discussing the company’s focus on decarbonizing growth opportunities following recently completed asset sales worth $6.2bn in net proceeds.

Prices for blue ammonia as a maritime fuel could come in at $900 per ton, a prospect that underscores OCI Global’s enthusiasm for its focus on decarbonizing energy transition projects.

OCI CEO Ahmed El-Hoshy made the remark today in discussing the company’s recently announced asset sales that will bring in roughly $6.2bn in net proceeds, which will be used to reduce debt, return value to shareholders – and make additional investments in energy transition projects.

The company launched a strategic review of its asset portfolio earlier this year under pressure from activist investor Inclusive Capital.

Announced Friday, OCI offloaded its 50% stake in fertilizer producer Fertiglobe to Abu Dhabi National Oil Company (ADNOC) in a deal worth $3.62bn. OCI and ADNOC separately announced they will explore opportunities for collaboration on joint venture investments in development projects in decarbonization and product distribution across North America and Europe. 

Today, OCI announced it has reached a deal to sell 100% of the equity interests in Iowa Fertilizer Company to Koch Ag & Energy Solutions for $3.6bn. OCI was advised by Morgan Stanley as financial advisor on the transaction and Cleary Gottlieb served as legal counsel.

Texas Blue

The company’s biggest investment globally is the 1.1 million ton Texas blue ammonia project, which is in development with partners Linde and ExxonMobil. OCI is in talks with Asian offtakers and other strategics about phase 1 offtake and a minority equity investment in that project. El-Hoshy also said previously the company is exploring adding a second line to expand production at the site. 

“Once the first line has some of that ammonia spoken for, that second line has the benefit of a lot of the utilities, the off-site being already in place, so that we’re talking about mainly inside the battery limit-type investments save for a few utility-type investments,” he said.

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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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Pennsylvania RNG firm outlines strategic outlook

A growing RNG developer, owner and operator based in Pennsylvania is anticipating a liquidity event on the part of its private equity owner — once it has locked down a “critical mass” of projects.

Vision RNG, a developer of US RNG projects, could see its next project reach commercial operations in Tennessee in a line of projects in southeastern and mid-western states, CEO Bill Johnson said in an interview.

Vision Ridge Partners, a private equity firm, is the majority owner of the company. Management owns the remaining minority stake.

The company is still in early stages and would likely need to get something like six projects to COD before a liquidity event.

“Locking down projects creates a lot of value,” Johnson said, noting that Vision Ridge will likely follow a typical private equity monetization pattern.

The company’s project at Meridian Waste’s Eagle Ridge Landfill in Bowling Green, Missouri is fully operational. It uses 1,500 scfm of landfill gas (LFG) and produces 375,000 MMBtu of RNG annually.

That mid-sized project is similar in scale to what is being developed in Tennessee, which will likely be the next project to reach COD, Johnson said, declining to provide details on exact location.

“We’re working on developing other opportunities with some of the largest publicly owned landfill companies in the country,” Johnson said.

Projects require between $20m and $60m in capex, ranging from small to large, Johnson said. Vision Ridge takes care of the company’s equity requirements.

Debt options are being considered on a project-by-project basis, he said. Debt tends to range from 50% to 70% of total spend.
“We’ll look to put reasonable project debt on these,” he said.

Vision has not to date retained the services of an investment bank, Johnson said.

Vision is pursuing opportunities in Kentucky, Alabama, South Carolina and Oklahoma, and will evaluate suppliers of services and equipment for each. The location-agnostic company is also open to new relationships with potential future financial and strategic acquirers.

“If you are a private equity group, you’re a potential buyer of the company at some point, so we would be happy to know them and keep their interest in us up,” Johnson said. An acquirer would not necessarily need to have expertise in RNG.

M&A potential

M&A of projects is an option on the table, Johnson said. But returns are better if Vision develops its own projects; and a more challenging macroeconomic environment makes acquisitions somewhat unlikely.

“With the market premiums being paid, I see us continuing to keep our head down and focusing on organic growth,” Johnson said.

Johnson said he expects to see continued consolidation in the greater market. Many large strategic and midstream companies have yet to make significant buys in RNG.

He pointed to bp’s acquisition of Archaea Energy as a significant milestone in the RNG market.

“There’s quite a number of potential acquirers,” Johnson said. “The market is kind of fundamentally and always will be under-supplied and over-demanded.”

Vision would potentially be open to a merger with a portfolio company of a strategic or PE investor, Johnson said.

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Denver green ammonia firm prepping series C capital raise

A green ammonia developer and technology provider is laying the groundwork for a series C capital raise later this year, and still deliberating on a site for its first project.

Starfire Energy, a Denver-based green ammonia producer, is wrapping up a series B capital raise and laying the groundwork for a series C later this year, CEO Joe Beach said in an interview.

The company completed a $6.5m series A in 2021 and finished a $24m series B last year. Investors include Samsung Ventures, AP Ventures, Çalık Enerji, Chevron Technology Ventures, Fund for Sustainability and Energy, IHI Corporation, Mitsubishi Heavy Industries, Osaka Gas USA, Pavilion Capital and the Rockies Venture Club.

Beach declined to state a target figure for the upcoming raise. The firm has not used a financial advisor to date.

Starfire is currently deliberating on locations for its first production facility to come online in 2026, Beach said. Colorado is a primary contender due to ammonia demand, while the Great Plains offer abundant wind energy.

The firm’s strategy is to use renewable energy and surplus nuclear power from utilities to create ammonia from hydrogen with no storage component, eliminating the problems associated with hydrogen storage and transportation.

Targeted offtake industries include agriculture, maritime shipping and peaking power fuel consumption.

“The demand is global,” Beach said, stating that he expects about 150 leads to convert to MOUs. “We get inbound interest every week.”

For future capital raising, Beach said the company could take on purely financial investors, as it already has a long list of strategic investors.

“The expectation is we will wind up with manufacturing plants around the world,” Beach said.

The “new petroleum”

Many hydrogen production projects have been announced worldwide in the last year.

Beach said he expects many of those to transition into ammonia production projects, as ammonia is much easier to export.

Now, Starfire is working on developing its ammonia cracking technology, which converts ammonia into an ammonia/hydrogen blend at the point of use for chemical processes. The final product form in that process is 70% ammonia, 22.5% hydrogen and 7.5% nitrogen – all free of emissions.

The company is using proceeds of its series B capital raise to develop its Rapid Ramp and Prometheus Fire systems. Rapid Ramp uses a modular system design for the production of green ammonia using air, water, and renewable energy as the sole inputs. Prometheus Fire is an advanced cracking system that converts ammonia into hydrogen, operating at lower temperatures than other crackers and creating cost-effective ammonia-hydrogen blends that can replace natural gas.

The advantage to using this technology is that it makes the export of a hydrogen product financially feasible, Beach said.

“You should see ammonia becoming the new petroleum,” he said of the global industry. Ammonia can be deployed internationally like oil and provide the dependability of coal.

Eventually Starfire will undergo a financial exit, Beach said. Likely that will mean an acquisition, but an IPO is also on the table.

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