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Marquis sells ethanol plant to United Cooperative

Ethanol producer Marquis has sold a 100 million gallon per year facility in Wisconsin to United Cooperative.

Illinois-based Marquis has sold its Necedah, Wisconsin ethanol facility to United Cooperative.

The facility, which has a production capacity of 100 million gallons of ethanol per year, will operate under the new name of United Energy Necedah. The asset sale will be effective May 31, 2024, according to a news release.

In addition to ethanol, the facility produces DDGs, high-protein animal feed, and corn oil.

“The purchase of Marquis’ Necedah ethanol plant aligns with our strategic initiative of investing in agriculture, opening new markets, and providing value-added products for our member-owners,” stated David Cramer, President and CEO of United Cooperative. “This type of diversification supports our mission, our local farmers, and the U.S. economy. Our investment also promotes our sustainability efforts by continuously improving the stewardship of the air, soil, and water, safeguarding our natural resources for generations to come.”

Mark Marquis, CEO of Marquis, said, “The sale of our Wisconsin facility aligns with our commitment to strategic growth in developing the world’s first carbon-neutral industrial complex in Hennepin, IL. We extend our sincerest gratitude to our valued grain customers, the supportive Necedah community, and to the incredible and talented team of employees at Marquis Energy Wisconsin for their hard work and dedication. We look forward to the continued success of United Energy Necedah LLC under the stewardship of United Cooperative.”

As part of the sale, Marquis will collaborate with United Cooperative to provide ongoing marketing and team support and looks forward to a prosperous future of working with the United Cooperative team.

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Downstream hydrogen firm adds Chevron to investor group

Hydrogen distribution and fueling business OneH2 has closed an investment round led by Chevron and existing investors Trafigura and The Papé Group.

Hydrogen distribution and fueling business OneH2 has closed its latest funding round with investments led by Chevron U.S.A. Inc. and current investors Trafigura and The Papé Group, according to a news release.

Terms of the transactions were not disclosed.

Funds from the round will be used to help accelerate the development and deployment of mid-scale hydrogen generators and fuel distribution solutions, which will enable OneH2 and its channel partners provide lower carbon solutions to its customers.

“We welcome Chevron’s investment and eagerly anticipate collaborating with one of the world’s largest vertically integrated energy companies,” said Paul Dawson, OneH2’s president and CEO. “The OneH2 team deeply appreciates the steadfast support from our existing investors as we continue to invest in hydrogen infrastructure across the United States. Each of our investors will play a pivotal role in shaping the trajectory of OneH2 and contributing to the advancement of the broader hydrogen industry.”

Chevron’s decision to lead the round demonstrates its ongoing commitment to exploring diverse energy sources and technologies. By investing in OneH2, Chevron aims to play a key role in driving hydrogen as a viable, pragmatic and economical energy source.

“At Chevron, we believe affordable, reliable and ever-cleaner energy is essential to enabling human progress, and we believe the use of lower carbon intensity hydrogen as a fuel source can help reduce emissions,” said Nuray Elci, Chevron’s general manager of Renewables. “We are excited to work with the team at OneH2 and other partners to help build the fueling infrastructure for hydrogen vehicles, moving this technology forward.”

Additional investment by Trafigura and The Papé Group represent their continued confidence in OneH2’s strategic direction and their commitment to bringing practical, hydrogen fueling technology to the market.

“This is our third equity investment in OneH2, showing our support for the progress that they’re making and scalability of their business, we are encouraged about the growth inflection point OneH2 is reaching and what it means for hydrogen adoption in the US,” said Julien Rolland, Head of Renewables and Strategic Investments for Trafigura.

Jordan Papé, president and CEO of The Papé Group, added, “Papé provides solutions that maximize our customers’ uptime while staying abreast of regulatory trends in the lower carbon energy sector. Our investment in OneH2 will allow us to continue to provide solutions for our customers both today and into the future.”

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bp’s Archaea Energy starts up modular RNG facility

The modular design allows plants to be built on skids with interchangeable components.

bp’s Archaea Energy has started up its largest original Archaea Modular Design (AMD) renewable natural gas (RNG) plant to date in Shawnee, Kansas, just outside of Kansas City.

The plant, which is fully-owned by Archaea, is located next to a large, privately-owned landfill, bp said in a news release.

Using the AMD, the Shawnee plant captures the gas from the landfill and converts it to renewable natural gas. The Shawnee plant, which is three times the size of Archaea’s first AMD plant in Medora, Indiana brought online in October 2023, can process 9,600 standard cubic feet of landfill gas per minute (scfm) into RNG – enough gas to heat around 38,000 homes annually, according to the EPA’s Landfill Gas Energy Benefits Calculator.

Starlee Sykes, CEO Archaea Energy: “This represents another significant milestone for Archaea. A plant of this size can have a positive impact in capturing emissions from a landfill and providing our customers with lower carbon fuel. We are excited to be operating in Kansas – a state with an exceptional record in renewable energy.”

Traditionally, RNG plants have been custom built, but the AMD allows plants to be built on skids with interchangeable components. Using a standardized modular design leads to faster builds than previous industry standards. AMD plants are designed to come in three sizes – 3,200 scfm; 6,400 scfm; and 9,600 scfm.

After purchasing Archaea Energy, bp is now the largest producer of RNG in the US. In 2023, bp’s global biogas supply volumes were up 80% year-on-year, reflecting the Archaea uplift.

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Direct air capture company to provide credits to Microsoft

The company is developing a project in Wyoming that will capture and store 5 million tons of CO2 per year by 2030.

CarbonCapture Inc, a climate tech company that develops direct air capture (DAC) systems based on modular open systems architecture, has reached an agreement with Microsoft Corp. to provide engineered carbon removal credits, according to a news release.

“We’re thrilled to help Microsoft move toward its commitment to be carbon negative by 2030 and to remove all of its historic CO2 emissions by 2050,” said Adrian Corless, CEO and CTO, CarbonCapture, Inc. “Validation of CarbonCapture’s scalable approach to DAC from a forward-thinking company like Microsoft is an important signal to the entire market, demonstrating the value of high-quality carbon removal credits.”

CarbonCapture designs and manufactures modular DAC systems that can be deployed in large arrays. Currently, the company is developing Project Bison, a large DAC facility in Wyoming, that will follow a phased rollout plan to capture and store five million tons of atmospheric CO2 per year by 2030. This project is expected to be the first commercial-scale project to utilize Class VI injection wells to permanently store CO2 captured from ambient air using DAC technology and the first massively scalable DAC project in the United States.

“Purchasing DAC carbon removal credits is an important part of Microsoft’s pursuit of permanent, durable carbon removal,” said Phillip Goodman, director, Carbon Removal Portfolio, Microsoft. “This agreement with CarbonCapture helps us move toward our carbon negative goal, while also helping to catalyze the growth of the direct air capture industry as a whole.”

In addition to dramatically reducing current emissions, the global community needs to collectively remove 6-10 billion tons of carbon dioxide per year by 2050 in order to remain on a path to limiting global warming to 1.5°C. As DAC facilities begin to come online over the next several years, corporations like Microsoft are playing a critical role in helping to scale capacity by committing to advanced purchase agreements.

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CCS developer initiating discussions for corporate capital raise

Following its sale of a stake in a mega-scale carbon capture project in the Gulf Coast, Carbonvert is planning to initiate conversations to raise additional corporate capital, with plans to deploy as much as $500m into new projects.

Carbonvert, a Houston-based carbon capture and sequestration developer, is planning to start conversations soon with an eye to raise corporate capital that will allow it to advance mega-scale CCS projects, CEO Alex Tiller said in an interview.

Owned by a group of outside investors and the management team, Carbonvert is advancing a business model that takes advantage of the group’s expertise in early-stage project development, Tiller said.

The company recently completed the sale of its 25% interest in the Bayou Bend CCS project to Norway’s Equinor, which will now own the development alongside Chevron (50%) and Talos Energy (25%).

Bayou Bend CCS is the type of mega-scale project that Carbonvert will be pursuing in coming years, and for which the company will need to raise as much as $500m in corporate capital due to the capital-intensive nature of the projects, Tiller said.

Chevron last year bought its 50% operating stake in Bayou Bend for $50m, implying a $100m valuation for the project, which is positioned to become one of the largest CCS developments in the US for industrial emitters, with nearly 140,000 gross acres of pore space – 100,000 onshore and 40,000 offshore.

Carbonvert’s stake sale, announced yesterday, was “a positive result” for the company, Tiller said, though he declined to comment further on the valuation.

“It delivers capital to our balance sheet and allows us to grow our pipeline of projects and fund additional projects,” he said. Carbonvert used Jefferies as sell-side financial advisor in the sale to Equinor, he added.

Tiller, a veteran of the renewable energy industry, is a founding member of Carbonvert alongside Chief Development Officer Jan Sherman, who previously had a 30-year career with Shell and helped build the oil major’s Quest CCS project in Alberta, Canada.

For the upcoming capital raise, Carbonvert has not decided on whether to use a financial advisor; the structure of the capital raise will likely determine if an advisor is needed, Tiller said.

“We’ll definitely be out raising more corporate capital – these projects are tremendously expensive,” he said. “We’ll be starting conversations soon.”

The company has a line of sight to deploy as much as $500m of capital into its own projects over the next several years, he said, an indication of how much capital it will need to raise.

“These are large infrastructure projects that are going to take many years to bring to fruition, followed by decades of operations,” he said. “We live at the front end of the projects,” he added, “and when the appropriate parties are at the table, it’s really an act of humility to say ‘hey, maybe we’ve taken this as far as we can or should,’” a reference to finding the right time to sell the company’s stakes in the projects it is developing.

In addition to the Bayou Bend CCS project, Carbonvert is part of a consortium that’s developing a carbon hub in Wyoming. The company is also collaborating on an exploratory study for the direct air capture and storage of CO2 emissions from a nuclear power plant in Alabama.

“You can expect to see project announcements that look like Bayou Bend in the future,” Tiller said. “We like that type of mega-scale project, we like offshore, and we’re also pursuing some opportunities onshore that are less mature.”

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Midstream hydrogen firm to seek capital for projects within one year

The first slate of the company’s salt cavern hydrogen storage and pipeline projects will likely reach FID within six to 12 months, setting the stage for a series of project finance and tax equity transactions.

NeuVentus, the newly formed midstream infrastructure and hydrogen storage company backed by Lotus Infrastructure Partners, will likely seek project financing and tax equity for its first cache of projects in the Gulf Coast region of Texas and Louisiana in six to 12 months, CEO Sam Porter said in an interview.

“It sure looks like 45V and 45Q, and basically everything the IRA just did, is like a brick on the accelerator,” Porter said, explaining that he expects additional federal clarifications for hydrogen to come this year. “We’re looking at FIDing a first batch of projects, which I think are really going to marry up some things that the project finance community loves.”

That includes salt cavern storage and pipelines with a novel ESG twist, Porter said. The company plans to own and operate its developments as a platform. If in time demand for projects becomes overwhelming, the equity holders could sell those projects.

NeuVentus recently launched with Lotus’ backing. The private equity firm’s position is that they are able and ready to fund all project- and platform-level equity, Porter said.

“There’s certainly project level finance requirements, debt, tax equity and sponsor equity,” Porter said. The company will first get its projects de-risked as much as possible.

Pickering Energy Partners was mandated for NeuVentus’ seed raise. Porter said there could be additional opportunities for financial advisors to participate in fundraising, though Lotus has significant in-house capabilities and relationships.

Vinson & Elkins served as the law firm advising Lotus Infrastructure, formerly Starwood Energy, on the launch of NeuVentus.

The company is also open to acquiring abandoned or underutilized infrastructure assets, convertible to hydrogen, Porter said. Assets that connect production and consumption that can be more resistant to embrittlement than newer midstream infrastructure and would be of interest.

Exiting assets in regions that are good for hydrogen production, namely those that are sunny and windy, and are relatively close to consumption, will get the closest look.

Oil & gas in the energy transition

Renewable-sourced hydrogen offers an opportunity for traditional oil and gas operators to continue their work in salt domes.

NeuVentus’ plan is to focus on storage first, and then have the pipeline emanate from that, Porter said. The founding team of the company has a lot of experience in oil & gas and structuring land deals (mineral rights and surface/storage rights) in the Gulf region, where salt caverns are abundant.

The company is also open to an anchor tenant that needs a pipeline segment between production and consumption. But from a developers’ perspective the most prudent play will be around storage sites located with multiple interconnection options, he said.

There are roughly 1,500 miles of pipeline and 9 to 10 million kilograms of daily hydrogen production and consumption in the Texas and Louisiana Gulf region, Porter said.

“I think we’re going to see a significant need for more midstream build-out,” he said. “The traditional fee-for-service model is going to be appealing to a lot of the new entrants.”

A molecule-agnostic approach

Hydrogen is “a Swiss army knife” of a feedstock for numerous use cases, Porter said. That all of those use cases will prevail is uncertain, but NeuVentus ultimately only needs one or two of them to grow.

“Additional hydrogen infrastructure is going to be required,” whether it’s for ammonia as fertilizer or methanol as fuel or something else, Porter said. “We don’t necessarily care: all of them are going to require clean hydrogen.”

Equity owners in NueVentus will be opportunistic when it comes to an eventual financial exit, Porter said.

“The beauty of this is that I can see a number of potential buyers,” he said.

An offtaker that wants to vertically integrate, like foreign consumers of hydrogen products, could want to acquire a midstream platform for purposes of national energy security. Industrial gas companies could want to acquire the infrastructure as well. Large energy transfer companies that move molecules are obvious acquirers as well, and finally the company could remain independent or list publicly under its own business plan.

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Biomass-to-hydrogen developer in talks for development capital, series A

A California developer that uses woody biomass to make green hydrogen is in discussions to raise capital for project development and a series A funding round.

Yosemite Clean Energy, a California-based biomass-to-hydrogen start-up, is in discussions with potential investors to raise development capital for projects and a series A round.

The company is currently seeking around $20m of development capital that would help advance woody biomass-to-hydrogen projects to FID, CEO Tom Hobby said in an interview.

Hobby said he is also in discussions with strategic capital partners about a series A funding round. The company is not using an advisor for the capital raise, Hobby said, but is working with the law firm Kilpatrick Townsend & Stockton.

The company has so far raised less than $2m at the corporate level from friends and family and an additional $5m – including grants – for projects, Hobby added. The development capital as well as the series A raise would be conducted at the project level.

Yosemite has signed a letter of intent and term sheet for offtake from its first project in Oroville, California, which will produce approximately 24,000 kg per day (2,760 MMBtu) of green hydrogen from woody biomass, and is set for FID later this year. Hobby declined to name the offtaker but described it as a “global trading house.”

Hobby, whose family has lived in the Sierra Nevada for generations, emphasizes the company’s role as a partner with local communities to help manage forest waste, which has served as fuel for explosive wildfires in recent years.

“It’s de-risking their communities from catastrophic wildfires,” he said.

Design incentives

Under the original design for the Oroville facility, the company had planned to produce 31,000 kg per day of RNG and 12,200 kg per day of green hydrogen. But due to incentives for green hydrogen in the Inflation Reduction Act, the company has pivoted to a hydrogen-only design, Hobby said.

The $3/kg incentive for green hydrogen in the IRA created “additional value for no real capital cost differential,” he said.

Yosemite’s second project is in Toulumne County, California and will follow a design substantially similar to the Oroville facility.

The company employs dual-bed gasification technology licensed from Austrian firm Repotec, while Primoris is doing detailed design and engineering.

The technology takes wood and creates a medium-strength BTU gas that can be used to make different products, Hobby said. “Once it’s in a gaseous form, we can use it for a lot of purposes: we can take it to make power, we can produce hydrogen, we can use the Fischer-Tropsch process to make second-generation biofuels like aviation fuel, and we have a patent that can do hydrogen and RNG.”

Project ownership

Meanwhile, Yosemite has hired a Texas-based firm to help raise capital for projects, which are estimated to cost $250m at the outset, but could decline once efficiencies are achieved, Hobby said.

The company’s project ownership model is unique in that it seeks to bring in local wood businesses – in logging, land clearing, and orchard removal – as providers of biomass and also equity investors in the projects.

“To have their investment and their wood at the same time is huge,” Hobby said.

In raising capital for the projects, in addition to equity and debt investors, Yosemite is evaluating a mix of sources in the tax-exempt bond market as well as lower-interest loans from within California and export finance solutions. The company recently received two $500,000 Forest Biomass to Carbon-Negative Biofuels grants from the California Department of Conservation.

Hobby would like to build 50 woody biomass plants in California, which would utilize approximately 5 million tons of the 35 million tons of waste woody biomass available annually in the state.

“Our goal is not to have to truck and ship wood more than 50 miles,” he said. “If you put circles around every place in California that’s a decent wood basket […] I think we could sign about 50 facilities across the state.”

The company is also planning to expand beyond California to other states with a low-carbon fuel standard, Hobby said.

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