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Gevo and ClearFlame collaborating for ethanol in transportation

Gevo, subsidiary Verity Holdings, and ClearFlame Engine Technologies plan to collaborate on the deployment of ethanol in US freight transportation.

Gevo, along with its wholly owned subsidiary Verity Holdings, and ClearFlame Engine Technologies will collaborate to drive decarbonization traceability from field-to-fleet for the road freight transportation market in the United States, according to a news release.

Road freight transportation consumes an estimated 29 billion gallons of fuel in the US every year.

“Under this collaboration, the parties intend to use Verity’s proprietary carbon accounting software to authenticate the carbon intensity (CI) of biofuels derived from crops grown on US farms to their consumption in ClearFlame-equipped trucks,” the release states. “The Verity platform would track environmental attributes from field-to-fleet.”

At the field level, data regarding the greenhouse gas emissions required to grow a crop are tracked to calculate a CI score for the crop, e.g., corn. That corn is then processed by an ethanol plant where the energy usage, potential carbon capture and other carbon abatement efforts would be quantified to deliver low-carbon ethanol for use by ClearFlame and their customers.

“By replacing diesel fuel with engines that run on 100% ethanol, ClearFlame has shown greenhouse gas emissions reductions of 42%, helping companies to meet their ESG goals while supporting rural communities,” the release states. “In addition, a ClearFlame retrofit changes fewer than 5% of parts on an existing vehicle.”

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Airbus and LanzaJet to collaborate on SAF production

The MOU establishes a relationship between LanzaJet and Airbus to advance the building of SAF facilities that will use the LanzaJet Process.

LanzaJet, a sustainable fuels technology company and Airbus, a global leader in the aerospace, commercial aircraft, helicopter, defense, and space sectors, today announced they have entered into a memorandum of understanding (MOU) to address the needs of aviation through the production of sustainable aviation fuel (SAF), according to a news release.

The agreement was signed by Jimmy Samartzis, CEO of LanzaJet and Julie Kitcher, EVP, corporate affairs and sustainability at Airbus and announced during the Paris Air Show.

The MOU establishes a relationship between LanzaJet and Airbus to advance the building of SAF facilities which will use the LanzaJet Process™, a leading, proven, and proprietary Alcohol-to-Jet (ATJ) technology. This agreement also aims to accelerate the certification and adoption of 100% drop-in SAF which would eliminate the use of fossil fuels without necessitating any changes to existing aircraft or infrastructure. The aviation industry is responsible for approximately 2-3% of global carbon dioxide emissions, and SAF has been identified by airlines, governments, and energy leaders as one of the most immediate solutions to decarbonize aviation, together with the renewal of the fleets by latest generation aircraft and better operations.

“SAF is the best near-term solution to reducing aviation emissions and this collaboration between LanzaJet and Airbus is an important step forward in the fight against climate change and enabling the global energy transition,” said Jimmy Samartzis, CEO of LanzaJet. “We look forward to continuing our work with Airbus and further grow our joint impact across the globe.”

LanzaJet’s proprietary ATJ technology uses low-carbon ethanol to create SAF that reduces greenhouse gas emissions by more than 70% percent compared to fossil fuels and can further decrease emissions with a suite of carbon reduction technologies. SAF produced through LanzaJet’s ATJ technology is an approved drop-in fuel compatible with existing aircraft and infrastructure.

“We are delighted to grow our partnership with LanzaJet, a leading company in the SAF production ecosystem. At Airbus we are committed to supporting SAF as a major lever in the reduction of CO2 emissions on the decarbonization roadmap,” says Julie Kitcher, EVP, corporate affairs and sustainability at Airbus. “With LanzaJet as a trusted partner, we can support the acceleration of the Alcohol-to-Jet SAF production pathway and at scale. This collaboration will also explore technological developments to enable Airbus aircraft to be capable of flying up to 100% SAF before the end of the decade.”

Besides working on the technical aspects and concrete SAF projects, LanzaJet and Airbus will investigate business opportunities across the world with airlines and other stakeholders.

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PowerCell serving H2 fuel stacks to ZeroAvia

The agreementcomprises 5,000 hydrogen fuel cell stacks with deliveries planned to start in 2024.

PowerCell has signed the world’s first contract covering the serial delivery of hydrogen fuel stacks to the aviation industry, according to a press release.

The agreement, potentially valued up to SEK 1.51bn, is conditioned on client ZeroAvia obtaining necessary certifications. It comprises 5,000 hydrogen fuel cell stacks with deliveries planned to start in 2024.

Approximately SEK 25m of the order value is expected to impact revenues in 2022.

ZeroAvia focuses on hydrogen-electric aviation solutions and aims to launch a 19-seat aircraft with 300-mile range by 2025. The American and British company acquired California-based fuel cell stack innovator HyPoint this month.

The total order value of SEK 1.51 billion is conditional on ZeroAvia obtaining necessary certifications of the powertrain.

PowerCell will, upon completed aviation certifications, deliver a total of 0.5 GW fuel cells comprising of 300 kW superstack modules based on the industrialized 100 kW fuel cell stack. The fuel stacks will be used by ZeroAvia to manufacture a 600 kW, low-temperature, hydrogen-electric powertrain for the certified 19-seat, fuel cell-powered commercial aircraft.

As part of the agreement, PowerCell will establish a unit in the UK for final assembly and the adaptation of the stacks to ZeroAvia’s fuel cell system and application.

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Macquarie Commodities supporting Mexico low-carbon methanol project

The project is expected to produce approximately 300,000 MT of green methanol from captured carbon and green hydrogen and 1.8 million MT of blue methanol per year from natural gas with carbon capture.

Transition Industries LLC has entered into a Master Services and Marketing Agreement with Macquarie Commodities Trading, an affiliate of Macquarie Group’s Commodities and Global Markets business, for its Pacifico Mexinol project, a 6,145 metric tons (MT) per day methanol production facility near Topolobampo, Sinaloa, Mexico, according to a news release.

When it commences operations, Pacifico Mexinol is expected to be one of the largest single low carbon chemicals facilities in the world – producing approximately 300,000 MT of green methanol from captured carbon and green hydrogen and 1.8 million MT of blue methanol per year from natural gas with carbon capture.

Under the terms of the MSMA, Macquarie is responsible for marketing all the production from Pacifico Mexinol to customers on a global basis in accordance with methanol offtake agreements, the provisioning of financial hedging services as required by the Project, and supporting the Project in commodity planning and contracting for all required feedstock. The MSMA has a term of 15 years from the Commercial Operations Date of the Project.

The International Finance Corporation, a member of the World Bank Group, is participating in the co-development of this global-scale low carbon methanol plant. IFC would act as project co-developer with Transition Industries LLC, and as the co-lead mandated arranger alongside Kreditanstalt fur Wiederaufbau IPEX. The MSMA and financing for Pacifico Mexinol were announced at a formal signing ceremony for the Joint Project Development Agreement in Dubai, UAE, alongside the COP28 conference.

Pacifico Mexinol is expected to reach Final Investment Decision in 2024 and Commercial Operations Date in late 2027.

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California biomass-to-hydrogen firm in Series A

A woody biomass-to-hydrogen firm in California is conducting an in-house Series A for engineering and design on its first project, one that will need more than $800m of debt and equity in the future.

Mote Inc. is aiming to finish a Series A round, raising between $12m and $15m, by the end of the year, CEO Joshuah Stolaroff said in an interview.

The company does not have a relationship with a financial advisor and has been conducting the raise in-house, he said. Moving forward the company will need a financial advisor.

The Series A will provide some 18 months of technology development runway, plus engineering and design on the first project in Bakersfield, Kern County. That will require some $800m in debt and project equity to start in the next year.

A second project in Sacramento is in the pre-Feed stage. That development is the subject of a recently secured grant from the Sacramento Municipal Utility District.

“We need big partners to do it on any meaningful scale,” Stolaroff said of biomass-to-hydrogen. Investors tend to be technology VCs with little or no knowledge of project finance, and infra funds looking for no-risk projects. “We fall somewhere in between.”

Part of the Arches H2 hub in California, Mote has ambitions to expand to other areas of the US with good biomass supply and CO2 storage, like the southeast and Gulf Coast, Stolaroff said. The company would also like to expand internationally.

“We are a great deal right now,” he said of the Series A,” adding that a Series B or project equity round will follow shortly.

Majority equity is held by the company’s six employees, Stolaroff said. There are also seed investors that hold equity.

Abundant feedstock and a growing offtake market

Mote’s three primary feedstocks are agricultural and forestry reside and urban green waste. California produces some 45m tons of it per year and the number nationwide is about half-a-billion, Stolaroff said.

Mote is confident for demand from hydrogen customers, Stoaroff said. Transportation is expected to be a strong demand source by the time Mote is operational. The Arches hub also has connections with municipal users, filling stations and the ports of LA and Long Beach.

“We are all planning for growth,” he 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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Exclusive: American Clean Power to advocate for ‘grandfathering’ in 45V rules

The clean energy trade group plans to continue promoting the concept of “grandfathering” for early-mover green hydrogen projects in response to IRS guidance for 45V rules, according to industry sources familiar with the plans.

Clean energy industry trade group American Clean Power (ACP) plans to continue championing the concept of “grandfathering” in the green hydrogen sector, arguing that it is critical for the economic viability of early green hydrogen projects under the Inflation Reduction Act’s clean hydrogen tax credits, according to sources familiar with the group’s plans.

Grandfathering would allow these projects to adhere to less stringent annual time-matching requirements before transitioning to an hourly regime.

ACP, through its previously released Green Hydrogen Framework, has proposed to grandfather in the early-mover projects under annual time-matching as long as they start construction before January 1, 2029. That’s in contrast to guidance for the 45V clean hydrogen tax credit that would require renewable energy generation associated with green hydrogen projects to be matched hourly beginning in 2028.

The trade group, which consists of 800 clean energy companies, previously argued against too-soon hourly matching in a November white paper. Representatives of ACP did not immediately respond to requests for comment.

In response to the IRS guidance, ACP is seeking to underscore that, without grandfathering, early projects will have to be designed from the start to meet hourly matching requirements, significantly increasing costs and negating the benefits of annual time matching, sources said.

The notice of public rulemaking on 45V was issued on December 26, and is open for public comment for 60 days. The tax credit rules, which would require strict adherence to the so-called three pillars approach for incrementality, temporal matching, and deliverability, are viewed by some in the industry as overly burdensome.

ACP’s position is that the project finance market can handle some changes midstream in long-term agreements, but not fundamental shifts like transitioning from annual to hourly time matching. 

This switch could lead to a dramatic decrease in green hydrogen production and a concurrent exponential increase in production costs. Investors, anticipating these risks, might finance green hydrogen production agreements as if they were under an hourly regime from the beginning, thereby eliminating the initial benefits of annual time matching, according to the sources familiar.

A Wood Mackenzie study estimates that hourly time matching requirements could result in a price increase of 68% in Texas and 175% in Arizona, for example.

ACP, according to sources, stresses that the absence of grandfathering would create an economic cliff for agreements straddling both accounting systems. This would add to project costs, potentially discourage customer interest in green hydrogen, and hinder the industry’s maturation, the sources explained. In contrast, grandfathering first-mover projects under an annual time matching regime would ensure competitive production costs, driving demand for green hydrogen, the trade group believes.

Moreover, sources explained that ACP’s position is that the transition from annual to hourly matching without grandfathering would likely necessitate assuming hourly matching from the onset in power purchase agreements, leading to higher hydrogen costs from the start. This could delay green hydrogen industry development and give an advantage to blue hydrogen with early adopters, potentially excluding green hydrogen from the market.

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