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Mitsui investment arm appoints US-based CEO

Mitsui O.S.K. Lines, one of the largest shipping companies in the world, has appointed a California-based CEO of its investment arm to oversee a $100m budget for investment in climate tech. The booming containership market in recent years has provided Mitsui O.S.K. Lines with a strong financial base that enables it to make aggressive new investments.

MOL Switch, a recently established investment arm of Mitsui O.S.K. Lines, has appointed Tomoaki Ichida as CEO.

Ichida has held the position of executive officer at Mitsui O.S.K. Lines since April of last year, and was promoted to managing executive officer in conjunction with his appointment as CEO of the investment arm, according to a LinkedIn post.

MOL Switch was established earlier this year to invest in startups developing decarbonizing technologies in the energy sector. MOL Switch will invest $100m in total over the next three years.

Ichida is based in Palo Alto, California, according to LinkedIn.

MOL Switch aims to access innovation, build new networks, explore new business opportunities, and expand human capital by investing in startups developing technologies and business models that help decarbonize our group companies and society, according to a news release. MOL Switch will invest in technologies related to next-generation clean energy, carbon removal, and battery storage.

The booming containership market in recent years has provided Mitsui O.S.K. Lines with a strong financial base that enables it to make aggressive new investments, according to a presentation.

MOL Clean Energy, US, a subsidiary of Mitsui O.S.K. Lines, earlier this year became a JV shareholder in Ascension Clean Energy, a proposed world-scale, clean hydrogen-ammonia production and export facility in Ascension Parish.

The MOL Switch venture capital strategy mirrors its Japanese counterpart, JERA, which earlier this year launched JERA Ventures to invest $300m in start-up companies that have leading-edge technologies or business concepts and in venture capital funds that have close connections to such companies.

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Minnesota SAF production coalition formed

A collection of private and public entities intend to make Minnesota, and in particular the Minneapolis-Saint Paul International Airport, an important SAF hub.

Bank of America, Delta Air Lines, Ecolab and Xcel Energy have established the Minnesota SAF Hub, the first large-scale SAF Hub in the US committed to scaling sustainable aviation fuel production, according to a news release.

Anchor members are joined by other institutions, including the State of Minnesota, to implement a shared strategy for decarbonizing the airline industry. It’s organized through the GREATER MSP Partnership.

The aim is to produce low-carbon SAF by developing an integrated value chain from production to use at Minneapolis-Saint Paul International Airport.

“After eight months of behind-the-scenes collaboration, the coalition will share its ambitious objectives today at the North American SAF Conference and Expo in Minneapolis,” the release states. “Progress to date includes establishing a shared, multi-phase strategy, securing nation-leading financial incentives from the State of Minnesota, and building a growing coalition of Minnesota-based organizations including the anchor companies, State of Minnesota, the Metropolitan Airports Commission, the University of Minnesota, and knowledge partner McKinsey & Company.”

As early as 2025, the coalition aims to bring commercial-scale volumes of SAF to the airport. Minnesota’s SAF tax credit makes the state attractive for production. It is working with existing and prospective SAF producers to increase production in Minnesota.

“The coalition will welcome additional SAF producers, investors, corporate partners, and broader value chain players,” the release states.

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Air Products nearing project finance mega-deal for green ammonia facility

The Pennsylvania-based company is nearing completion of a $8.5bn project finance deal, which includes more than 20 global financial institutions and will fund its NEOM green ammonia facility in Saudi Arabia.

Air Products will now pursue a project finance mega-deal to build the NEOM Green Hydrogen Complex in Saudi Arabia.

The company and its partners will close a non-recourse debt deal for $6.2bn “very soon” to finance the project, CEO Seifi Ghasemi said today on an investor call.

The debt will sit alongside $2.3bn of combined equity from Air Products, NEOM, and ACWA Power, representing a 75%/25% debt to equity split.

Air Products, which is the sole offtaker for the facility, will now invest approximately $800m of cash into the project instead of the original $1.7bn.

Meanwhile, the cost of the project – which consists of 4 GW of renewables powering production of up to 600 tons per day of hydrogen – has climbed to $8.5bn compared to an original capital estimate of $5bn, according to the presentation.

But, Ghasemi added, the offtake price of the green ammonia to Air Products remains the same as what was negotiated in July 2020 when the project was announced.

“We are project financing this thing with some of the biggest banks in the world giving us money,” Ghasemi said. “They have looked at this project […] and they’re willing to finance it, so I guess they all think this is a good project and a good prospect and they’re going to get their money back.”

Ghasemi noted there could be some upside for additional hydrogen production at the facility when compared to the initial design.

The significant amount of wind, solar, and electrolyzer capacity installed at the site, Ghasemi said, “might end up giving us the capability of making a lot more than the 1.2 million tons per year.”

“I personally think they’re could be an upside, but we’ll have to wait and see,” he added.

The executive said the company evaluates projects individually as to whether it will pursue project financing. Among other projects, Air Products is also building the Net-Zero Hydrogen Energy Complex in Alberta, Canada which will not use project financing, Ghasemi said. The company will “look at” using project financing for its mega-scale Texas green hydrogen project with AES, he added.

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Ammonia-to-power tech company raises $139m series B-1

Led by SK Innovation, other investors include Temasek, Korea Zinc, Aramco Ventures, AP Ventures, MOL PLUS, Yanmar, Zeon Ventures and DCVC.

Amogy Inc., a developer of emission-free, energy-dense ammonia power solutions, has completed its $139m Series B-1 fundraising.

The round was led by SK Innovation, joined by other global investors including Temasek, Korea Zinc, Aramco Ventures, AP Ventures, MOL PLUS, Yanmar Ventures, Zeon Ventures and DCVC, according to a news release.

The funding will enable Amogy to continue its organizational development to support commercialization, begin manufacturing of its innovative ammonia-to-power technology, and bring its first product to market in 2024.

Amogy CEO & Co-founder Seonghoon Woo

“We are working from a place where we have no doubt  that our technology will change the world,” says Seonghoon Woo, CEO of Amogy. “In 2021, CO2 emissions from transportation in the United States totaled 1.7 BMT — the most from any sector of the economy. This funding will help us to see our mission of forging a path toward net-zero 2050 through and in turn, make the world more sustainable. We greatly appreciate the investors sharing our bold mission, and we are laser-focused to bring our technology to market.”

Amogy’s ammonia-to-power technology feeds liquid ammonia through its cracking modules integrated into a hybrid fuel cell system, which powers electric motors for zero-carbon transportations including shipping. Amogy plans to

present its ammonia-powered, zero-emission tugboat in late 2023 — which is three times larger than the system that was field-tested on Amogy’s ammonia-fueled semi truck earlier this year. Upon the successful sail of the tugboat later in 2023 in upstate New York, Amogy intends to present its first commercial offering in 2024 and more.

“Amogy’s technology represents a key breakthrough in the usage of ammonia as a fuel, and we believe that it will revolutionize not only the maritime industry, but the entire transportation industry,” says Jun Kim, Vice Chairman & CEO from SK Innovation. “We want to make sure Amogy has the resources it needs to make zero-emission shipping a reality.”

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Exclusive: Zero-emission locomotive start-up in Series B capital raise

A locomotive start-up focused on the US market for zero-emission freight trains is undergoing a Series B capital raise, with sights on a much larger Series C raise next year.

OptiFuel Systems, a provider of zero-emission line haul locomotives and generation solutions, is conducting a $30m Series B capital raise.

The South Carolina-based firm is seeking to finalize the Series B by the end of this year, and plans to use proceeds to advance production of its zero-emission technologies for the rail industry, which represents a massive decarbonization opportunity, CEO Scott Myers said in an interview.

Meanwhile, the firm will seek to tap the market for around $150m for a Series C next year, Myers added. The company is not working with a financial adviser. 

While the Series B will focus on bringing to production some of OptiFuel’s smaller rail offerings, such as the switcher locomotives, the Series C will be mostly dedicated to progressing testing, manufacturing, and commercialization of its larger line haul locomotive.

The company is also considering making its own investments into digesters for RNG facilities, from which it would source the gas to run its RNG-fueled locomotives. As part of its offering, OptiFuel also provides refueling infrastructure, and envisions this aspect of its business to be just as profitable as selling trains.

“We anticipate that we would be the offtaker” of RNG, “and quite potentially, the producer,” Cynthia Heinz, an OptiFuel board member, said in the interview.

A systems integrator, OptiFuel offers modular locomotives for the freight industry that can run on zero-emission technology such as renewable natural gas, batteries, and hydrogen. The company recently announced that it will begin testing of its RNG line haul locomotive, which is a 1-million-mile test program that will take two years and require 10 RNG line haul locomotives.

Image: OptiFuel

The company’s target market is the 38,000 operating freight trains in the U.S., 25,000 of which are line haul locomotives run by operators like BASF, Union Pacific, and CSX. Fleet owners will be required to phase out diesel-powered trains starting next decade following passage of in-use locomotive requirements in California, which includes financial penalties for pollution and eventual restrictions on polluting locomotives. Other states are evaluating similar measures.

“The question is not will the railroads change over: they have to,” Myers said. “The question is, how fast?”

Following completion of testing, OptiFuel aims to begin full production of the line haul locomotive – which has a price tag of $5.5m per unit – in 2028, and is aiming to produce 2,000 per year as a starting point. The smaller switcher units are priced between $1.5m and $2.5m depending on horsepower.

OptiFuel has held discussions with Cummins, one of its equipment providers, to source at least 2,000 engines per year from Cummins to support its production goal. 

“That’s a $10bn-a-year market for us,” Myers added.

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NOx mitigation firm looking to scale

A publicly listed company with a hydrogen burner project backed by one of the largest US utilities could accelerate growth with a capital infusion in pursuit of first-adopter clients. It offers technology that aims to mitigate an underappreciated aspect of the embryonic clean hydrogen ecosystem: blending hydrogen with natural gas can greatly increase NOx emissions when combusted.

ClearSign Technologies, the publicly listed burner solutions provider, is at an inflection point in the development of its products to serve players in the emerging hydrogen landscape, CEO Jim Deller said in an interview.

“We’re new,” Deller said of the company’s emergence on the hydrogen scene. The company is aggressively seeking a place in the hydrogen mainstream as it pursues first-adopter clients. “We need to get our install base up.”

ClearSign recently received a collaboration commitment and pledged funding for its 100% Hydrogen Ultra Low NOx burner project from Southern California Gas Co. This comes on top of the SBIR program Phase 2 Award for $1.6m from the DOE. The company has one year’s cash on hand, according to Deller.

Hydrogen blending increases the output of NOx emissions, which are heavily regulated, Deller explained. A 20% hydrogen blend with fuel gas, for example, causes a 40% increase in NOx emissions.

The goal of the project with SoCalGas is to develop NOx hydrogen burner technology, which the company believes will enable the adoption of hydrogen fuel for industrial heating.

“Your NOx permit is not going to change,” he said. “In order to use even a small amount of hydrogen in your fuel gas, you need a technology that’s going to allow you to maintain NOx emissions for an efficient price.”

Deller said he sees ClearSign as an enabler of the hydrogen transition, pointing to SoCalGas’ need to keep their clients compliant with their operating permits.

“They’re going to have to modify their technology to enable the combustion of hydrogen without exceeding their NOx permits, and that’s where we come in.”

A ‘pivotal point’

ClearSign is open to discussing partnerships and financial options to scale deployment of its technology, Deller said, pointing to potential markets in Texas and the Pacific Northwest.

“We’re certainly open to any company that has a compatible technology,” Deller said.

ClearSign is not engaged for M&A now, but it does have discussions with prospective financial advisors, company spokesperson Matthew Selinger said. “Like any small company, if we had more money we could potentially accelerate faster.”

The company is not considering a spin off now, Deller said, focusing instead on getting traction commercially. ClearSign has not historically taken on debt. Those types of business opportunities are not off the table, but technical synergy and strategic partnerships are first pursued for value creation.

“We’re at a pivotal point, I believe, in the development of our technology,” Deller said. “I’m open to talk about any ideas.”

A technology in development

The burner technology is also applicable to systems that use only hydrogen, Deller said. The Phase 2 DOE grant funding is meant to develop a full range of commercial burners that will operate through a range of fuel gasses up to and including 100% hydrogen.

ClearSign does not have additional partnerships pending announcement, Deller said. But what’s applicable in Southern California is relevant to discussions happening in proposed hydrogen hubs around the country.

The company is headquartered in Tulsa, Oklahoma, along with process burner manufacturing partner Zeeco. It uses third-party manufacturing and will continue to do so, Deller said.

ClearSign also has offices in Seattle and Beijing. The company’s US and Chinese businesses to not have a materials shipping relationship, Deller said. The model followed has manufacturing separated between countries.

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Illinois ethanol company seeking offtaker for SAF project

Seeking to diversify into new markets, Marquis, a family-owned ethanol producer based in Illinois, is looking for an offtaker for its first sustainable aviation fuel plant.

Marquis, a family-owned ethanol producer based in Illinois, is seeking an offtaker for its first sustainable aviation fuel plant.

The company, which is developing the plant in partnership with LanzaJet, an SAF firm, recently completed a feasibility study for the project, and is looking for airlines or users of renewable diesel as offtakers, Dr. Jennifer Aurandt Pilgrim, the company’s director of innovation, said in an interview.

Marquis owns and operates a 400 million gallon per year ethanol plant – the largest dry-grind ethanol plant in the world – which produces sustainable ethanol for fuel and chemicals as well as a feed for the aquaculture and poultry industries.

The company will divert roughly 200 million of those gallons to make 120 million gallons per year of SAF and renewable diesel, Aurandt said, noting that Marquis is looking to branch into new markets where ethanol is a feedstock.

“As more electric vehicles come on, there will be about a 3 billion gallon demand destruction for ethanol, and SAF is one of the great markets that we can diversify into,” she said.

Aurandt said financing for the SAF facility will ultimately depend on who the offtaker is.

Use cases

United Airlines, Tallgrass, and Green Plains Inc. recently formed a joint venture – Blue Blade Energy – to develop and then commercialize SAF technology that uses ethanol as its feedstock.

SAF using corn as a feedstock does not currently qualify for incentives in the Inflation Reduction Act, which uses standards laid out by the International Civil Aviation Organization that effectively exclude corn-based SAF from qualifying.

Marquis and other ethanol producers are pushing for the adoption of a lifecycle greenhouse gas model, known as GREET, developed by the Argonne National Laboratory, that would allow corn-based feedstock to qualify, said Dustin Marquis, the company’s director of government relations.

The company is also looking to attract partners to set up operations in the Marquis Industrial Complex, which is touted as a 3,300-acre industrial site with natural gas lines, access to multiple forms of transportation, and carbon sequestration on-site.

“We’re looking for other businesses where there would be either vertical integration or business synergies between the two organizations,” Marquis said.

Marquis said in a news release it would develop two 600 ton per day blue hydrogen and blue ammonia facilities along with manufacturing for carbon neutral bio-based chemicals and plastics.

CO2 utilization

In its production process, Marquis makes 1.2 million tons of biogenic CO2 per year, and has applied for an EPA Class IV permit for sequestration.

“We like to say it’s direct air capture with the corn plant,” Aurandt said, adding that the CO2 is purified via fermentation to 99.9% pure, and will be injected into a formation that sits beneath the Marquis Industrial Complex.

The company is additionally developing a CO2 utilization project with LanzaTech, which would augment ethanol production using CO2 as a feedstock. The project was recently awarded an $8.54m grant from the US Department of Energy, the largest award in the category of corn ethanol emission reduction.

“We can increase the amount of ethanol that we produce here by 50%,” Aurandt said. “So we could make 200 million gallons of ethanol per year” from CO2, she added, noting that the pilot demonstration will be the largest CO2 utilization project in North America. It is expected to be operational in late 2024.

The SAF plant and the CO2 utilization project will use hydrogen for refining and as an energy source, respectively, Aurandt said.

Gas Liquid Engineering is the EPC for the CO2 unit, and Marquis will use compressors from Swedish multinational Atlas Copco.

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