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Materials technology company opens California green cement plant

Fortera has opened the first green cement and carbon mineralization facility in North America.

Materials technology company Fortera has opened its Redding ReCarb Plant, the first industrial green cement and carbon mineralization facility in North America and one of the largest of its kind in the world, according to a press release.

Located in Redding, California, Fortera’s plant will capture carbon dioxide (CO2) emitted during cement production and permanently sequester it by mineralizing the CO2 into ready-to-use cement.

Not only will this reduce carbon emissions by 70% on a ton-for-ton basis and eliminate feedstock waste associated with traditional concrete production, but every year, the facility will capture 6,600 tons of CO2 and produce 15,000 tons of low-carbon ReAct® cement. Fortera will integrate with green energy supply at future plants, achieving true zero-COcement.

“Redding is the first of many plants in Fortera’s future as a green cement producer, and achieving this milestone brings the industry that much closer to realizing zero-carbon cement, which is critical for both our continued infrastructure and the health of our planet,” said Ryan Gilliam, CEO of Fortera. “While significant, we recognize this is one step in a much larger effort to reach commercialization globally, and we are committed to scaling our technology using existing infrastructure to mobilize widespread adoption of low and zero-carbon cement.”

Fortera’s ReCarb process is a collaborative bolt-on technology that works within existing cement production infrastructure rather than building new stand-alone plants from the ground up, providing a sustainability solution that can be implemented quickly, economically, and efficiently. In Redding, Fortera’s ReCarb facility is adjacent to CalPortland’s cement plant. Fortera captures CO2 emitted during calcination—the process occurring when limestone is heated in a kiln—and draws the gas from CalPortland’s flue gas stack into the ReCarb plant, where it undergoes mineralization to transform the gas into ReAct green cement, a rare form of calcium carbonate.

Since cement is the most significant source of CO2 emissions in concrete production, the ReCarb technology reduces carbon emissions throughout the value chain without imposing substantial capital costs and creates a product that is just as effective as ordinary cement. ReCarb also increases overall product output. When limestone is heated in a kiln to make ordinary cement, nearly half is lost as CO2. Mineralizing those emissions through ReCarb produces a ton of green cement for every ton of limestone feedstock used. Further, ReCarb reduces energy use by using a lower kiln temperature and creates a path to zero CO2 cement when combined with renewable energy.

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Materials technology company opens California green cement plant

Fortera has opened the first green cement and carbon mineralization facility in North America.

Materials technology company Fortera has opened its Redding ReCarb Plant, the first industrial green cement and carbon mineralization facility in North America and one of the largest of its kind in the world, according to a press release.

Located in Redding, California, Fortera’s plant will capture carbon dioxide (CO2) emitted during cement production and permanently sequester it by mineralizing the CO2 into ready-to-use cement.

Not only will this reduce carbon emissions by 70% on a ton-for-ton basis and eliminate feedstock waste associated with traditional concrete production, but every year, the facility will capture 6,600 tons of CO2 and produce 15,000 tons of low-carbon ReAct® cement. Fortera will integrate with green energy supply at future plants, achieving true zero-COcement.

“Redding is the first of many plants in Fortera’s future as a green cement producer, and achieving this milestone brings the industry that much closer to realizing zero-carbon cement, which is critical for both our continued infrastructure and the health of our planet,” said Ryan Gilliam, CEO of Fortera. “While significant, we recognize this is one step in a much larger effort to reach commercialization globally, and we are committed to scaling our technology using existing infrastructure to mobilize widespread adoption of low and zero-carbon cement.”

Fortera’s ReCarb process is a collaborative bolt-on technology that works within existing cement production infrastructure rather than building new stand-alone plants from the ground up, providing a sustainability solution that can be implemented quickly, economically, and efficiently. In Redding, Fortera’s ReCarb facility is adjacent to CalPortland’s cement plant. Fortera captures CO2 emitted during calcination—the process occurring when limestone is heated in a kiln—and draws the gas from CalPortland’s flue gas stack into the ReCarb plant, where it undergoes mineralization to transform the gas into ReAct green cement, a rare form of calcium carbonate.

Since cement is the most significant source of CO2 emissions in concrete production, the ReCarb technology reduces carbon emissions throughout the value chain without imposing substantial capital costs and creates a product that is just as effective as ordinary cement. ReCarb also increases overall product output. When limestone is heated in a kiln to make ordinary cement, nearly half is lost as CO2. Mineralizing those emissions through ReCarb produces a ton of green cement for every ton of limestone feedstock used. Further, ReCarb reduces energy use by using a lower kiln temperature and creates a path to zero CO2 cement when combined with renewable energy.

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SunHydrogen receives $45m capital commitment

The California-based company will use proceeds for further development of its nanoparticle-based green hydrogen technology, and also enable investments in and co-development of other complementary technologies.

SunHydrogen, Inc., the developer of a technology to produce renewable hydrogen using sunlight and water, has received a $45m investment commitment from GHS Investments, LLC, of Jericho, New York, according to a press release.

The proceeds will be used in part to further the development of SunHydrogen’s nanoparticle-based green hydrogen technology, and in parallel to enable the company to invest in and co-develop other complementary technologies across the renewable hydrogen value chain.

The company remains committed to developing its nanoparticle technology to commercialization, with its most immediate internal goal being the successful demonstration of a first-ever, production-quality prototype.

However, with the addition of the capital commitment, SunHydrogen also looks to realize its goal of furthering renewable hydrogen technology to grow the hydrogen ecosystem. Specifically, SunHydrogen seeks to make strategic investments by partnering with other early-stage companies to enable and assist them in reaching their own manufacturing stages.

This vision is evidenced by SunHydrogen’s recent $10m strategic investment in Norway-based TECO 2030, the developer of zero-emission technology for the maritime and heavy industry sectors.

“This investment commitment from GHS ushers in a new era of SunHydrogen as a technology company for the green hydrogen economy,” said SunHydrogen’s CEO Tim Young.

“Our mission to develop, acquire and partner with other critical technologies brings significant value to our investor base,” Mr. Young continued. “Our cooperation with TECO 2030 is a prime example of this.”

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Hystar to establish North American electrolyzer production

The Norway-based electrolyzer maker will begin hiring for North American headquarters, with plans to establish a multi-GW facility by 2027.

Norwegian electrolyzer maker Hystar is planning to expand into North America, establishing a headquarters next year and a multi-GW factory by 2027, according to a news release.

As part of its expansion, Hystar will soon initiate the hiring process for its new North American headquarters. Additionally, the company is in discussions with key stakeholders in both the United States and Canada to establish its first GW factory on the continent, where Hystar expects its commercial operations may exceed its European plans within the decade. The company has not ruled out the possibility of investing in further GW factories before 2030.

Hystar said in the same release it will deliver a fully automated 4 GW electrolyser factory in Høvik, Norway (just west of Oslo) by 2025, with construction commencing in early 2024.

The company earlier this year raised $26m in a Series B funding round co-led by AP Ventures and Mitsubishi Corporation. Additional investors in the round included Finindus, Nippon Steel Trading, Hillhouse Investment and Trustbridge Partners, alongside existing investors SINTEF Ventures and Firda.

Commenting on their expansion plans, Fredrik Mowill, CEO of Hystar, said: “Our Høvik GW factory demonstrates our commitment to rapidly expanding our European operations and meeting the strong demand for our technology across Europe. As we continue to scale up our operations, we are now looking at opportunities beyond Europe – the North American market has created a highly favourable environment for companies like ours to thrive in. We are looking forward to identifying the ideal North American location for Hystar.

Hystar has already commenced production of its electrolyzer stacks for its upcoming PEM electrolyzer deliveries using its existing facilities, which have a production capacity of 50 MW annually.  As such, Hystar’s ramp-up to a GW factory marks a significant expansion to meet the surging demand for its breakthrough technology. The supplier for the Høvik GW automated production line will be selected later this year, and the factory’s production line will be fully operational by 2026.

Upcoming deliveries from Hystar include a 1 MW electrolyzer in Q4 2023 for Norwegian companies Equinor, Yara Clean Ammonia, and Gassco, for the HyPilot field project in Kårstø, Norway. This will be followed by a 5 MW electrolyzer for Poland’s largest private energy company, Polenergia, in Q3 2024 for their H2HubNS project in Nowa Sarzyna, Poland.

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exclusive

Hydrogen developer raising equity for US and EU projects

A Washington, DC-based hydrogen developer has hired an advisor to raise equity for three projects in California, and is laying the groundwork for a second capital raise in the EU.

SGH2 Energy, a Washington D.C.-based hydrogen developer, is in the early stages of a process to raise project equity for its three California projects.

Morgan Stanley has been retained to run the process, which could result in taking on two investors, CEO Robert Do said in an interview. The company hopes to have the process wrapped up within three months, he added.

Do declined to disclose the amount he is seeking to raise, but said the company prefers a strategic investor that can co-develop projects outside of California.

Meanwhile, SGH2 has filled out 70% of the senior debt commitments it will need for its Lancaster, California plant, Do said. At the Lancaster plant, SGH2 plans to produce up to 12,000 kilograms (1,380 MMBtu) of clean hydrogen per day, and 4.5 million kilograms per year (517,000 MMBtu) from the conversion of 42,000 tons per year of rejected recycled mixed-paper waste.

An additional set of three projects in Germany, Belgium and Holland will need an equity provider as well, Do said. That process could launch at the end of this year and the company could hire additional financial advisors.

A less expensive proposition

In addition to the Lancaster plant, SGH2 is advancing a Bay Area agricultural waste-to-hydrogen project in Stockton and a Sierra Valley forest residue-to-hydrogen plant.

Lancaster has offtake agreements for 10 years, and the company is in talks with the same offtaker for the other projects.

SGH2’s process requires about five acres of land for a project, as opposed to about 300 acres for solar-powered electrolysis, Do said. The process also requires less water.

“It gives us a cost-competitiveness where we can be two-to-three times cheaper,” Do said.

SGH2 is exporting that process to Europe, Do said. The EU is still going through iterations of new legislation, particularly the Renewable Energy Directive III, that could clarify SGH2’s place in that market.

“Until the legislation is clear it’s hard to really launch the project and know what kind of support you’re getting,” Do said. SGH2 has sites, feedstock and development partners in place for Europe.

SGH2 was spun off from a technology development company that raised about $50m from various VC firms and energy companies, Do said. He is the controlling owner of SGH2.

Do plans to expand across the globe and will be raising money to fund projects in Korea, South Africa and elsewhere.

“There will be indeed opportunities for us to work with additional bankers and funders,” he said.

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Exclusive: Riverstone Credit spinout preparing $500m fundraise

Breakwall Capital, a new fund put together by former Riverstone Credit fund managers, is preparing to raise $500m to make project loans in decarbonization as well as the traditional energy sector. We spoke to founders Christopher Abbate and Daniel Flannery.

Breakwall Capital is preparing to launch a $500m fundraising effort for a new fund – called Breakwall Energy Credit I – that will focus on investments in decarbonization as well as the traditional energy sector.

The founders of the new fund, Christopher Abbate, Daniel Flannery, and Jamie Brodsky, have spent the last 10 years making oil and gas credit investments at Riverstone Credit, while pivoting in recent years to investments in sustainability and decarbonization.

In addition to bringing in fresh capital, Breakwall will manage funds raised from Dutch trading firm Vitol, for a fund called Valor Upstream Credit Partners; and the partners will help wind down the remaining roughly $1bn of investments held in two Riverstone funds.

Drawing on their experience at Riverstone, Breakwall will continue to make investments through sustainability-linked loans across the energy value chain, but will also invest in the upstream oil and gas sector through Valor and the new Breakwall fund.

“We’re not abandoning the conventional hydrocarbon economy,” Flannery said in an interview. “We’re embracing the energy transition economy and we’re doing it all with the same sort of mindset that everything we do is encouraging our borrowers to be more sustainable.”

In splitting from Riverstone Credit, where they made nearly $6bn of investments, the founders of Breakwall said they have maintained cordial relations, such that Breakwall will seek to tap some of the same LPs that invested in Riverstone. The partners have also lined up a revenue sharing arrangement with Riverstone so that interests are aligned on fund management.

The primary reason for the spinout, according to Abbate, “was really to give both sides more resources to work with: on their side, less headcount relative to AUM, and on our side, more equity capital to reward people with and incent people with and recruit people with, because Riverstone was not a firm that broadly distributed equity to the team.”

Investment thesis

A typical Breakwall loan deal will involve a small or mid-sized energy company that either can’t get a bank loan or can’t get enough of a bank loan to finance a capital-intensive project. Usually, a considerable amount of equity has already been invested to get the project to a certain maturity level, and it needs a bridge to completion.

“We designed our entire investment philosophy around being a transitional credit capital provider to these companies who only needed our cost of capital for a very specific period of time,” Flannery said.

Breakwall provides repayable short-duration bridge-like solutions to these growing energy companies that will eventually take out the loan with a lower cost of capital or an asset sale, or in the case of an upstream business, pay them off with cash flow.

“We’re solving a need that exists because there’s been a flock of capital away from the upstream universe,” he added.

Often, Breakwall loan deals, which come at pricing in the SOFR+ 850bps range, will be taken out by the leveraged loan or high yield market at lower pricing in the SOFR+ 350bps range, once a project comes online, Abbate said. 

Breakwall’s underwriting strategy, as such, evaluates a project’s chances of success and the obstacles to getting built. 

The partners point to a recent loan to publicly listed renewable natural gas producer Clean Energy – a four-year $150m sustainability-linked senior secured term loan – as one of their most successful, where most of the proceeds were used to build RNG facilities. Sustainability-linked loans tie loan economics to key performance indicators (KPIs) aimed at incentivizing cleaner practices.

In fact, in clean fuels, their investment thesis centers on the potential of RNG as a viable solution for sectors like long-haul trucking, where electrification may present challenges. 

“We are big believers in RNG,” Flannery said. “We believe that the combination of the demand and the credit regimes in certain jurisdictions make that a very compelling investment thesis.”

EPIC loan

In another loan deal, the Breakwall partners previously financed the construction of EPIC Midstream’s propane pipeline from Corpus Christi east to Sweeny, Texas.

Originally a $150m project, Riverstone provided $75m of debt, while EPIC committed the remaining capital, with COVID-induced cost overruns leading to a total of $95m of equity provided by the midstream company. 

The only contract the propane project had was a minimum volume commitment with EPIC’s Y-Grade pipeline, because the Y-Grade pipeline, which ran to the Robstown fractionator near Corpus Christi, needed an outlet to the Houston petrochemical market, as there wasn’t enough export demand out of Corpus Christi.

“So critical infrastructure: perfect example of what we do, because if your only credit is Y-Grade, you’re just a derivative to the Y-Grade cost of capital,” Abbate said.

Asked if Breakwall would look at financing the construction of a 500-mile hydrogen pipeline that EPIC is evaluating, Abbate answered affirmatively.

“If those guys called me and said, ‘Hey, we want to build this 500-mile pipeline,’ I’d look at it,” he said. “I have to see what the contracts look like, but that’s exactly what type of project we would like to look at.”

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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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