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Infinium and Navigator CO2 collaborate on eFuels project in US Midwest

Navigator will provide approximately 600k TPA of CO2 as a feedstock for ultra-low carbon Infinium eFuels.

Electrofuels provider Infinium and comprehensive carbon management company Navigator CO2 have entered into a Memorandum of Understanding and long-term relationship for Navigator to deliver 600,000 tons per annum (TPA) of biogenic carbon dioxide (CO2) from its Heartland Greenway system to a future Infinium facility for the production of electrofuels, also known as eFuels.

The Heartland Greenway Carbon Capture, Utilization, and Storage (CCUS) project is one of the largest aggregations systems for biogenic CO2 in development globally. The system will provide the infrastructure and network to connect industrial emitters of CO2 to new and developing markets for their carbon, while ensuring project developers, like Infinium, have access to a diversified, consistent, and ratable CO2 supply.

Infinium is developing next-generation fuels that will accelerate the market’s progress toward achieving climate goals during the ongoing energy transition. Infinium eFuels are created using CO2 that would otherwise be emitted into the atmosphere and renewable power-derived green hydrogen. Ultra-low carbon eFuels contain no sulfur and are cleaner burning than petroleum-based fuels.

“We are committed to delivering long-term, sustainable decarbonization solutions from our growing Heartland Greenway platform, and it’s exciting to see Infinium’s innovative approach to leverage carbon,” said Navigator CEO Matt Vining. “This agreement serves as a great example of how we help our partners optimize their carbon usage and minimize emissions while maximizing value.”

Infinium eSAF and Infinium eDiesel can be used in today’s planes, ships, and trucks as an immediate replacement for petroleum jet and diesel fuels without modifications to engines or distribution infrastructure. Infinium eNaphtha can be used to produce gasoline fuel alternatives as well as replace petroleum-derived naphtha in chemical and industrial processes for the creation of goods like plastics and solvents.

“The demand for eFuels as a climate-friendly alternative to petroleum-derived products continues to grow from both the heavy transit and the chemicals sectors,” said Robert Schuetzle, CEO at Infinium. “Partnerships like this with Navigator are essential to growing our capacity with access to multiple connected COsources as we scale eFuels production globally.”

Infinium has over a dozen projects in various phases of development across the US, Europe, Japan and Australia.

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CAD $20m awarded to 18 Alberta hydrogen projects

The total value of the funded projects, including matching investments for project partners, is more than CAD $200m.

The Alberta Hydrogen Centre of Excellence is awarding CAD $20m to 18 projects to advance innovations in hydrogen through its first funding competition, according to a press release.

A full list of the projects can be seen here.

One of the projects is the proposed Bremner 100% Hydrogen Community in Strathcona County, Alberta. ATCO and Qualico are studying the logistics, technology requirements and other considerations involved in developing 100% pure hydrogen communities – an step toward eliminating carbon emissions produced by hot water use.

“Other successful projects in the competition will examine the safe and effective use of pipelines for hydrogen transmission,” the release states. “Another project will look at how to convert heavy-duty long-haul trucks to dual-fuel machines. In all, projects will examine everything from production, transmission, distribution, and storage, to end-uses of hydrogen.”

A total of 68 project proposals were received. The HCOE will fund up to 50 per cent of eligible costs for the successful projects, or up to 75 per cent of eligible costs for projects led by post-secondary institutions, or those with a significant Indigenous component.

The total value of the funded projects, including matching investments for project partners, is more than CAD $200m. Projects have 24 months to complete their proposed work.

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Monarch Energy considering Illinois SAF plant

The plant would supply SAF to the Rockford International Airport, according to a column by Illinois Senator Tammy Duckworth.

Monarch Energy is considering a sustainable aviation fuel facility in Rockford, Illinois.

The plant would supply SAF to the Rockford airport, according to a column by Illinois Senator Tammy Duckworth.

“Monarch is considering building a facility that would use the emissions from nearby landfills that are already overburdened with waste from metro areas, converting them into American-made Sustainable Aviation Fuel (SAF) that could then be used at Rockford International Airport,” the senator wrote.

In an interview last year, Monarch CEO Ben Alingh said the company was focused on several green hydrogen projects in the Gulf Coast region, most notably a 500 MW project near Beaumont, Texas and a 300 MW project near Geismar, Louisiana.

Monarch has a $25m preferred equity investment and $400m project equity commitment from LS Power.

The proceeds of the preferred equity raise will fund pre-FID aspects of Monarch’s 4.5 GW green hydrogen development platform: overhead, project development, interconnection, land, permitting, and engineering.

The $400m commitment, meanwhile, is earmarked for project equity investments in Monarch’s pipeline of projects. Under the arrangement, the projects will be dropped into a new entity, Clean Hydrogen Fuels, LLC, where LS Power provides the capital and Monarch provides the project, Alingh said in the interview.

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AES expects $500m of EBITDA from green hydrogen business

US utility AES expects to generate $500m of EBITDA from its ownership of green hydrogen projects by 2030, based on 1,200 metric tons per day of hydrogen production plus related renewables and tax attributes.

Anchored by one of the largest proposed projects so far in the US, Virginia-based AES is launching a green hydrogen platform where it expects to generate approximately $500m of EBITDA by 2030.

The earnings projection includes an assumption of 1,200 metric tons per day of green hydrogen along with the related renewables and tax attributes, executives said in an investor day presentation.

Reaching 1,200 MT/D of production will require $20bn of total capital needs including hydrogen plants and renewables, with equity contributions from AES expected to be 5%, or $1bn, of the capex after debt and partner equity. The presentation notes that 100 MT/D of green hydrogen requires roughly $2bn of capital for hydrogen plants and renewables.

In other words, AES plans to invest $1bn in a business that will generate $500m of EBITDA by 2030, which at, say, a 10x EV multiple, would represent a 5x return on equity. Meanwhile, AES investments in tech platforms like Fluence and Uplight have led to 8x returns on equity to date, according to the presentation.

AES and Air Products have announced a partnership to build a Texas green hydrogen project – so far the largest in the country – with $4bn of capital requirements supporting 1.4 GW of wind and solar capacity along with 200 MT/D of green hydrogen production.

The renewables supporting the Texas electrolyzer project are designed similarly to a portfolio developed for data centers, Chris Shelton, SVP and chief product officer, said during the presentation.

“We’re developing the capability to time-match and dispatch these together – there’s ongoing innovation here – to deliver that hourly matching,” Shelton said. “That results in a very high expectation that we will receive the full $3 / kg incentive for this project,” he said, referring to the emissions-tiered incentive program outlined in the Inflation Reduction Act.

AES is targeting hydrogen growth in the US, Chile, and Brazil, and has 800 MT/D of green hydrogen projects in active development, within an identified opportunity set of 3,200 MT/D.

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EnCap’s Shawn Cumberland on the fund’s approach to clean fuels

Cumberland, a managing partner with EnCap Energy Transition, discusses how the clean fuels sector compares to the emergence of other new energy technologies, and outlines the firm’s wait-and-see approach to investment in hydrogen and other clean fuels.

EnCap Energy Transition, the energy transition-focused arm of EnCap Investments, is evaluating scores of opportunities in the hydrogen and clean fuels space but doesn’t feel the need to be an early mover if the risk economics don’t work, Managing Partner Shawn Cumberland said in an interview.

Houston-based EnCap prefers to invest in early stages and grow companies deploying proven technologies to the point that they’re ready to be passed onto another investor with much deeper pockets. There are hundreds of early-stage clean fuels companies looking for growth equity in the space, he said, but the firm believes it’s not necessary to deploy before the technology or market is ready.

Given the fund’s strategy of investing in the growth-equity stage, EnCap gains exposure to a niche set of businesses that are not yet subjected to the broader financial markets.

For example, when EnCap stood up Energy Transition Fund I, a $1.2bn growth capital vehicle, the manager piled heavily into storage, dedicating some $600m, more than half of the fund, to the sector.

“That was at a time when all we saw were some people putting some really dinky 10 MW and 20 MW projects online,” he said. “We absolutely wanted to be a first and fast mover and saw a compelling opportunity.”

The reasons for that were two converging macro factors. One was that the battery costs had come down 90% because of EV development. Meanwhile, the demand for batteries required storage to be built out rapidly at scale. So, that inflection point – in addition to the apparent dearth of investor interest in the space at the time – called for early action.

“We were sanctioning the build of these things with no IRA,” Cumberland said.

‘If it works’

To be sure, EnCap is not a technology venture capital firm and waits for technologies to be proven.

As such, the clean fuels sector could end up being a longer play for EnCap, Cumberland noted, but the fund continues to weigh whether there will be a penalty for waiting. In the meantime, regulatory issues like IRS guidance on “additionality” for green hydrogen and the impact of the EU’s rules for renewable fuels of non-biological origin should get resolved.

Still, market timing plays a role, and the EnCap portfolio includes a 2021 investment into Arbor Renewable Gas, which develops and owns facilities that convert woody biomass into low-carbon renewable gasoline and green hydrogen.

Cumberland also pointed to EnCap’s investment in wind developer Triple Oak Power, which is currently for sale via Marathon Capital. That investment was made when many industry players were moving toward solar and dropping attention to wind.

Now, clean fuels are trading at a premium because of investor interest and generous government incentives for the sector, he noted.

“Hydrogen, if it works, may be more like solar,” Cumberland said, describing the hockey-stick growth trajectory of the solar industry over 15 years. If the industry is cost-competitive without subsidies, there will be a flood of project development that requires massive funding and talented management teams

“We won’t be late to the party,” he said.

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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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Ammonia-to-industrial heat provider raising early-stage capital

An early-stage technology provider targeting clients in hard-to-abate industries is engaging investors and financial advisors to raise a seed round, with sites on a Series A in 2025.

Captain Energy, a Houston-based provider of ammonia-to-industrial heat technology, is seeking strategic investors for an early-stage seed round with plans for an eventual Series A, co-founder and interim-CEO Kirk Coburn said in an interview.

The company is developing a single-step process that can create industrial heat from cracked ammonia up to 700 degrees Celsius with zero NOX emissions, with hydrogen as a byproduct, Coburn said. The process uses a ceramic-based tubular solid oxide fuel cell that Captain manufactures in Dundee, Scotland.

“The results from the testing are that we’re 85% efficient,” Coburn said.

He likened the company to Amogy, but serving steel, cement and chemicals instead of transportation. Getting the kind of high-quality heat those industries need in a clean way can only come from a few sources, he noted.
“Ammonia is one of the greatest ways to do it if you can crack it efficiently like we can,” he said.
Past lab

The company is “past the lab stage” and needs to develop a pilot product to showcase to customers, Coburn said. About $5m will get the company to a 100-kilogram-per-day product, up from 25 kilograms now.

“That’s not, probably, big enough for most customers, but we can stack them,” Coburn said. “At this point we need to demonstrate commercially the product… after showcasing it we want to make larger units.”

Captain is owned by three co-founders, including Coburn. They have an 18-month line of site on a “much larger” Series A, Coburn said.

Strategic investors that would be end users of the technology are of interest to the company, particularly in Asian and European markets.

“We’re not getting in the game of making ammonia,” Coburn said. “We have to buy green ammonia.”

The company’s model is at “grid-parity” in Europe now, Coburn said, pointing to Germany in particular.

“We think we’re almost at subsidy-free pricing,” he said.

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