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Imperial to invest CAD 720m to build largest renewable diesel facility in Canada

The project, at Imperial’s Strathcona refinery near Edmonton, is expected to produce more than one billion liters of renewable diesel annually.

Imperial will invest about CAD 720m (USD 560m) to move forward with construction of the largest renewable diesel facility in Canada.

The project at Imperial’s Strathcona refinery near Edmonton is expected to produce more than one billion liters of renewable diesel annually primarily from locally sourced feedstocks and could help reduce greenhouse gas emissions in the Canadian transportation sector by about 3 million metric tons per year, as determined in accordance with Canada’s Clean Fuel Regulation.

Regulatory approval for the project is expected in the near term.

“Imperial supports Canada’s vision for a lower-emission future, and we are making strategic investments to reduce greenhouse gas emissions from our own operations and to help customers in vital sectors of the economy reduce their emissions,” said Brad Corson, Imperial chairman, president and chief executive officer. “The investment at our Strathcona refinery will deliver immediate benefits to the local economy creating jobs and contributing to a lower-emission energy future for our employees, neighbors and communities.”

The renewable diesel project was first announced in August 2021, with the Province of British Columbia supporting this project through a Part 3 Agreement under the BC low carbon fuel standard. A significant portion of the renewable diesel from Strathcona will be supplied to British Columbia in support of the province’s plan to lower carbon emissions. Imperial also intends to use renewable diesel in operations as part of the company’s emission reduction plans.

Imperial’s renewable diesel facility will use low-carbon hydrogen produced with carbon capture and storage technology to help Canada meet low emission fuel standards. Imperial has entered into an agreement with Air Products for low-carbon hydrogen supply and is developing agreements with other third parties for biofeedstock supply. The low-carbon hydrogen and biofeedstock will be combined with a proprietary catalyst to produce premium lower-emission diesel fuel and will reduce greenhouse gas emissions relative to conventional fuels.

Site preparation and initial construction are underway. Renewable diesel production is expected to start in 2025. The project is expected to create about 600 direct construction jobs, along with hundreds more through investments by business partners.

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Element Resources now targeting 1Q24 FID for green hydrogen project

The Houston-based company had previously said it would reach FID before the end of this year for the facility, which will be capable of producing between 20,000 and 24,000 tons per year of green hydrogen.

Element Resources is targeting a 1Q24 final investment decision for a green hydrogen production facility in development in Lancaster, California.

The Houston-based company had previously said it would reach FID before the end of this year for the facility, which will be capable of producing between 20,000 and 24,000 tons per year of green hydrogen.

“We have secured land and water rights and have made substantial progress in permitting, equipment selection, and off take development,” the company said in a news release. “We are presently aiming for a final investment decision by 1Q24.”

The company is evaluating the potential of systematic expansion of green hydrogen production in the Lancaster area and surrounding environs to keep pace with what it calls significant prospective demand for green hydrogen, SAF, and other hydrogen derivates.

The mobility, aviation, agriculture, mining, and industrial sectors have all shown keen interest in the potential of green hydrogen and its derivates throughout California and the region, the company said.

A new Memorandum of Understanding between Lancaster and Element Resources further proves Lancaster’s commitment to becoming the first US Hydrogen City.

“We are addressing the challenges of designing, constructing, and operating a green hydrogen facility reliant solely upon photovoltaic solar,” the release continues.

The utilization of power supplied by public utilities via the electricity grid is impractical insofar as the cost per kilowatt renders the use of ‘grid’ electricity impractical on an economic basis for green hydrogen in California.

Coupled with the costs of interconnection and the time lag for obtaining the interconnection, grid electricity is impractical. Grid electricity may not be 100% renewable, effectively introducing carbon into the production of hydrogen.

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Verdagy opens electrolyzer facility in Silicon Valley

The facility launch comes on the heals of a $73m funding round closed last month.

Verdagy, a pioneer in advanced water electrolysis electrolyzer technologies for large-scale industrial applications, today announced its new facility opening in Newark, California, with more than 100,000 sq. ft. of advanced manufacturing space.

The Silicon Valley factory will be the first to manufacture advanced water electrolyzers in large volumes in the United States. The commencement of operations at Verdagy’s highly-automated manufacturing facility will start in Q1 2024. Verdagy expects to double the total number of its employees by next summer to support its expansion and the operation of this new, state-of-the-art facility.

Verdagy’s customers are in heavy industries such as chemicals, ammonia/fertilizer, steel,  and e-fuels which all require large amounts of green hydrogen. “Our new Silicon Valley manufacturing facility will accelerate the production and cost reduction of our eDynamic® 20 megawatt electrolyzer module, which is the basic building block for delivering larger, gigawatt-scale plants,” said Marty Neese, Verdagy CEO.

The decision to expand Verdagy’s manufacturing capabilities in California comes at a time when the state is prioritizing the development of its hydrogen economy and becoming a federally funded hydrogen hub, as outlined in Governor Newsom’s Hydrogen Market Development Strategy.

“We are focused on building an entire renewable hydrogen ecosystem in California to achieve our climate goals – including the crucial step of manufacturing electrolyzers,” said Dee Dee Myers, Senior Advisor to Governor Newsom and Director of the Governor’s Office of Business and Economic Development. “Verdagy’s decision to expand their footprint here reflects California’s unique strength in creating new markets, enabling the creation of clean energy jobs while solving our most existential challenges with the technology of the future.”

Last month, Verdagy closed a $73m Series B funding round, co-led by Temasek and Shell Ventures. The new funding enables Verdagy to accelerate the launch and commercialization of its eDynamic 20 MW electrolyzer module, which will serve as a fundamental unit to future systems at the 200 MW scale and beyond.

The company’s goal is to design a factory that will serve as the basis for even larger scale production facilities that will be developed in other locations to support Verdagy’s rapid expansion. The company’s existing Moss Landing, CA location will remain focused on advanced research and development, and commercial pilot-plant operations to support Verdagy’s customer needs in the future and continue to deliver technology that produces green hydrogen at the industry’s lowest cost.

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ZeroAvia acquires fuel cell innovator HyPoint

ZeroAvia, the American and British provider of zero-emission solutions for commercial aviation, has acquired California-based HyPoint in a bid to advance hydrogen-electric flight.

ZeroAvia, the American and British provider of zero-emission solutions for commercial aviation, has acquired California-based fuel cell stack innovator HyPoint, according to a press release.

The financial terms of the deal were not disclosed.

The acquisition adds HyPoint’s high-temperature fuel cell technology – an avenue for increasing power output and energy density of aviation fuel cell powertrains – to ZeroAvia’s expertise in developing the full powertrain to enable hydrogen-electric flight.

All 40 HyPoint team members will be integrated into ZeroAvia, working across the R&D locations in Kemble, Gloucestershire and HyPoint’s location in Sandwich, Kent.

HyPoint’s CEO Alex Ivanenko joins ZeroAvia as GM for VTOL and New Segments, to develop ZeroAvia’s rotorcraft business applications, and to explore other applications outside of ZeroAvia’s core focus on fixed-wing commercial aviation.

The two companies have worked together on co-developing and testing HTPEM fuel cell technology as part of ZeroAvia’s powertrain development over the last couple of years, with HyPoint relocating the bulk of its R&D into the UK in February 2022 to support the partnership.

This new development comes on the heels of the announcement of a deal with ZeroAvia’s long-term fuel cell partner PowerCell which will see the serial delivery of hydrogen fuel stacks beginning in 2024.

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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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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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DG Fuels charting path to be SAF powerhouse

The company has retained advisors and is mapping out a plan to build as many as 50 production facilities in North America for a “gigantic” sustainable aviation fuel market.

DG Fuels is charting a plan to build a proprietary network of 30 to 50 sustainable aviation fuel (SAF) production facilities in North America, CEO Michael Darcy said in an interview.

The Washington, D.C.-based company will pursue a combination of debt and equity on a case-by-case basis to fund the projects, Darcy explained, with financings underway now for the firm’s initial project in Louisiana and a second facility in Maine. The Louisiana facility recently inked a USD 4bn offtake agreement with an undisclosed investment grade industrial buyer.

The company is working with Guggenheim and Stephens as financial advisors, Darcy said. About 60 people hold equity in the company; Darcy and the founding team hold a majority stake.

In the coming months DG Fuels will likely make announcements about more SAF plants in the US and British Columbia, Darcy said. Site negotiations are underway and each project is its own subsidiary of the parent company.

“There’s clearly a good return of what we refer to as the ‘project level,’ and then we have the parent company,” Darcy said. “We have strategic investment at the parent and now we’re looking at strategic investment at the project level.”

Huge demand, low supply

DG Fuels produces SAF from cellulosic biomass feedstock, a technology that does not need sequestration of CO2 because natural gas is not used.

“We like to say it’s the corn cob, not the corn,” Darcy said. The company can also use timber waste, waxes, and renewable power as an important source of energy.

The company gets about 4.5 barrels of SAF for every ton of biomass feedstock, which is roughly three to four times the industry average, Darcy said.

“Practical scale” for a facility is 12,000 to 15,000 barrels a day, Darcy said. That’s big enough to be commercialized without stressing the electrical grid with power demand.

Despite the company’s advantages, there is “plenty of room” for other producers to come into the SAF space, Darcy said.

“Right now, the market for SAF is gigantic and the supply is minimal,” Darcy said. “Companies like us are able to pick and choose high-quality offtakers.”

DG Fuels includes Delta Airlines, Air France and General Electric as committed offtakers.

Multi-tasking

DG Fuels is “always engaged in some level of capital raise for construction of facilities and detailed engineering,” Darcy said. “There’s always more engineering to be done.”

Some of the financing has already been completed, but Darcy declined to go into additional detail. After Louisiana, the company will quickly follow up with Maine.

HydrogenPro AS recently announced that it would join Black & Veatch and Energy Vault in financing the remaining capital requirements of DG Fuels’ project in Louisiana, which is expected to be completed in mid-2022.

Most of the engineering work in Louisiana is transferable to the company’s project in Maine. Darcy likened the facilities’ build-out to a class of ships: once the first is completed, the second and third can be built almost concurrently.

“There will be a point where we won’t be building one at a time,” Darcy said.

The opportunity for funders to participate is broad in the SAF space, Darcy said. There is a crossover of good economics and ESG, so strategics, industrials, private equity and other pure financial players can all be involved.

The broad base of capital eager to participate in companies that are innovative — but not too innovative as to scare investors — is indicative of the industry’s ability to secure offtakers and feedstock.

Storing power

It’s one thing to acknowledge the need for reduction of carbon, but hard work is required ahead, Darcy said.

“The low-hanging fruit has been done,” he said of the renewables industry. “Now it’s not really about the power, it’s about the storage of power.”

DG Fuels is an offtaker of non-peak renewable power to displace fossil fuel energy. But baseload renewable power is becoming available almost anywhere.

The Maine project will use stranded hydroelectric power, Louisiana will use solar, and projects in the Midwest will use wind, Darcy said. Additionally, geothermal power is “starting to become a very real opportunity,” he added.

Deploying broadly with renewable power gets past the issues of variability of renewable power at a reasonable cost, he said.

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