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PowerTap signs LOI for CO2 and hydrogen offtake

Under the LOI, PowerTap US will provide both food grade CO2 and fueling grade hydrogen to Coleman Industrial Gases.

PowerTap Hydrogen Capital Corp., a subsidiary of PowerTap, and Coleman Industrial Gases, LLC have signed a non-binding Letter of Intent that paves the way for an innovative and combined CO2/hydrogen purchase agreement, according to a news release.

Pursuant to the LOI, the pricing and terms of the future sale of product by PowerTap US to Coleman remain subject to the negotiation of a definitive offtake agreement, ultimately binding both parties into a strategic long-term partnership. The parties will use their best commercial efforts to negotiate a definitive agreement by December 31, 2023. The entering into of definitive agreement and PowerTap US’ ability to satisfy its obligations under the pending Definitive Agreement is subject to PowerTap’s ability to obtain sufficient funding to manufacture and commercialize its on-site hydrogen fueling units, and successfully obtaining required permits from applicable authorities.

Under the partnership, PowerTap US will serve as the seller, providing both food grade CO2 and fueling grade hydrogen, according to the release. To support the refueling of fuel cell electric trucks or (FCET), PowerTap US ‘ unique on-site hydrogen production and fueling equipment will be deployed at several sites, which also captures and stores CO2 for offtake to either “use” and or “sequestration” projects. In the exchange, Coleman’s future fleet of FCETs will gain a strong fueling partner in PowerTap US who contributes cost effective fueling while provisioning the CO2 commodity needed to serve Coleman’s increasing customer demands.

PowerTap US will enable Coleman’s gas supply chain with additional capacity leading to growth within their nationwide customer base. The supply relationship also negates the need to otherwise produce CO2 strictly for the purpose of fulfilling Coleman’s customer demands, making this a true “win-win-win” for PowerTap US, Coleman and the environment.

Furthermore, PowerTap US and Coleman have committed to collaborating on an innovative and cost-effective dual-purpose storage and delivery system, in which PowerTap US hydrogen production hub sites would use Coleman rail-based tankers as the primary CO2 storage tanks, the release says.

The LOI also contemplates an additional opportunity in which dry ice manufacturing from CMC Dry Ice Manufacturing, LLC (CMC), a Coleman affiliate, can be integrated as a co-located distribution center at PowerTap US refueling stations, eliminating the need for CO2 transport. In these cases, CMC will offer the dry ice produced to PowerTap FCET OEMs and fleet operators for cold transport of products such as vaccines and produce, further positioning PowerTap US as a cost competitive resource to fleets.

Mike Coleman, Chief Executive Officer of Coleman Industrial Gases, LLC, stated, “We are excited to embark on this journey with PowerTap to leverage sustainable energy solutions and enhance our operations. This new relationship with PowerTap aligns with our commitment to environmental responsibility and innovation.”

Salim Rahemtulla, Chief Executive Officer of PowerTap said, “Our pending partnership with Coleman is a testament to the power of collaboration in advancing clean energy solutions. Together, we are poised to make a positive impact on the environment while meeting the evolving needs of our customers.”

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Aemetis raising project finance for SAF facility

California renewable fuels company Aemetis is in an advanced process to raise approximately $500m in project financing for its Riverbank sustainable aviation fuel facility.

Cupertino, California-based Aemetis is far along in a process to raise roughly $500m for its Riverbank sustainable aviation fuel (SAF) facility – the largest of several capital raises the company is pursuing, CEO Eric McAfee said today.

The financing for the Riverbank facility, which just received final permitting authorizations, is expected to include preferred equity as well as senior secured debt financing, he added.

“We are well into a process of project financing,” McAfee said, a process delayed by the permit hindrances, in what will amount to a package in the “half a billion range.”

Shares for publicly-listed Aemetis traded today at $3.26 and a $129m market cap.

For the Riverbank project, Aemetis has already signed a deal for 20-year senior debt financing under the USDA Biorefinery Assistance Program, he said.

“But we have multiple opportunities in senior secured debt and we’ve got a very active customer base among airlines, many of whom have already funded into funds that are dedicated to the growth of SAF production,” he said.

He noted that airlines as well as manufacturers of widebody jets have all joined together to provide  mezzanine or equity financing to support SAF. “And we have active discussions with the largest of those investors,” he said.

The company has signed $3.8bn of final binding supply agreements with 10 airlines and a $3.2bn renewable diesel supply contract with the National Travel Stop Company, executives said on the call. In its five-year plan, Aemetis estimates the Riverbank facility will generate revenue of $672m with adjusted EBITDA of $195m in 2027 from the 90 million gallon plant.

Aemetis also expects to close on $75m of financing for biogas projects, and is also also raising a “little bit” of carbon sequestration financing, McAfee said.

The company generated LCFS credits from its biogas operations for the first time in Q124, 

“In addition to the sale of renewable natural gas as a fuel and the sale of federal D3 RINs, this new LCFS credit revenue stream will only increase as we build new digesters and as the California Resources Board approves the lower carbon intensity values that we have already demonstrated in actual operations ,” Andy Foster, president of North America said.

Though there have been delays in updating the California LCFS regulations for 2024, Foster noted that the California Air Resources Board’s model estimates the regulatory changes will raise the price of LCFS credits to more than $220 per credit in the next two years. The price of the credit has recovered from recent lows and is trading around $67 currently.

“There clearly was a realization that the LCFS credit overhang in the market was causing a serious deterioration in the ability for companies like us to make return on investment and further invest in programs, but also to encourage new investment in the entire renewable sector,” Foster said of the rule changes.

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Mitsubishi to participate in Louisiana DAC project

Mitsubishi will join a DAC project in Louisiana, where Shell is leading engineering and deployment.

Mitsubishi Corporation will participate in the Pelican Gulf Coast Carbon Removal Project, according to a news release.

The project, whose participants include Louisiana State University, Shell, and the University of Houston, aims to eliminate 1 million tons of CO2 annually through DAC and underground storage.

The US Department of Energy awarded a grant for the project feasibility study in 2023.

Through the project, MC collaborates with multiple third-party DAC technology companies in order to identify innovative technologies anticipated to substantially lower costs, advancing the technology maturation through detailed evaluation and engineering works with the goal of facilitating the early commercialization of DAC.
This project will be in collaboration with Shell US Gas & Power, who is leading the overall engineering and deployment as part of the project. The project scope centers on a feasibility study that includes evaluating the performance of multiple DAC technologies by demonstrations, supporting DAC technology companies as they design deployments, investing in prioritized distinct DAC technologies, and identifying opportunities to reduce the energy, water, and land resources required for carbon removal, as well as defining the technology needs for future deployment at scale.
MC is committed to contributing to the achievement of a carbon-neutral society. This includes plans to utilize captured CO2 as feedstock for producing synthetic fuels such as e-natural gas and Sustainable Aviation Fuel (SAF) on a long-term basis, while also aiming for the global expansion of the DAC business.
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PowerCell serving H2 fuel stacks to ZeroAvia

The agreementcomprises 5,000 hydrogen fuel cell stacks with deliveries planned to start in 2024.

PowerCell has signed the world’s first contract covering the serial delivery of hydrogen fuel stacks to the aviation industry, according to a press release.

The agreement, potentially valued up to SEK 1.51bn, is conditioned on client ZeroAvia obtaining necessary certifications. It comprises 5,000 hydrogen fuel cell stacks with deliveries planned to start in 2024.

Approximately SEK 25m of the order value is expected to impact revenues in 2022.

ZeroAvia focuses on hydrogen-electric aviation solutions and aims to launch a 19-seat aircraft with 300-mile range by 2025. The American and British company acquired California-based fuel cell stack innovator HyPoint this month.

The total order value of SEK 1.51 billion is conditional on ZeroAvia obtaining necessary certifications of the powertrain.

PowerCell will, upon completed aviation certifications, deliver a total of 0.5 GW fuel cells comprising of 300 kW superstack modules based on the industrialized 100 kW fuel cell stack. The fuel stacks will be used by ZeroAvia to manufacture a 600 kW, low-temperature, hydrogen-electric powertrain for the certified 19-seat, fuel cell-powered commercial aircraft.

As part of the agreement, PowerCell will establish a unit in the UK for final assembly and the adaptation of the stacks to ZeroAvia’s fuel cell system and application.

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Green hydrogen developer raising capital for projects

Fusion Fuel, a green hydrogen developer based in Portugal, has engaged an advisor and is in talks with investors to raise capital for projects in North America.

Fusion Fuel, a green hydrogen developer based in Portugal, has engaged an advisor and is in talks with investors to raise capital for projects in North America.

The company is working with RBC Capital Markets as financial advisor, Fusion Fuel Co-Head Zachary Steele said in an interview, and expects to produce infrastructure-type returns on its projects.

For its first project in the U.S., Fusion Fuel has agreed to a JV with Electus Energy to build a 75 MW solar-to-hydrogen facility in Bakersfield, California.

The project will produce up to 9,300 tons of green hydrogen per annum including nighttime operation and require an estimated $180m in capital investment, with a final investment decision expected in early 2024 and commissioning in the first half of 2025.

The combination of green hydrogen and solar production incentives along with California’s low carbon fuel standard make the economics of the project attractive, Steele said.

“Hydrogen is selling for up to $15-$18 per kilogram in California in the mobility market, and we can produce it at around the low $3 per kilogram area, so that leaves a lot of room for us to make a return and reduce costs for customers,” he said.

The company sells electrolyzer technology for projects but also serves as a turnkey developer. The technology consists of Hevo-Solar, which utilizes concentrated solar power to create hydrogen; and Hevo-Chain, a centralized PEM electrolyzer powered by external electricity.

Fusion Fuel’s proposition is that its smaller-scale technology – of 25 kW per unit –  is ready to use now, and can be dropped into places like a gas station in New York City, Steele said.

“This allows customers to scale into hydrogen and makes it available on site, compared with the massive projects going up in Eastern Canada or the Gulf Coast that require customers to commit significant capital to underwrite large scale projects,” he added.

Along with Electus, Fusion Fuel has already entered into a land-lease agreement for 320 acres in Kern County, California for the Bakersfield development. Black & Veatch will perform a concept study while Cornerstone Engineering and Headwaters Solutions are also engaged.

Iberian pipeline

The company targets to have EUR 40m of revenues in 2023, with a third of that coming from tech sales and the balance coming from Fusion Fuel-owned development projects.

Its revenue pipeline for next year is focused on the Iberian peninsula, and has been largely de-risked with the company having secured grants, with land and permitting underway.

In addition to the electrolyzer sales, the company, together with its partners, can provide turnkey projects that include engineering, procurement of the balance of plant equipment, construction of the facility, and operations, Steele said on an investor call this week.

“This allows us to not only make returns on the tech sale but also on the overall project and potentially recurring revenue from operations,” he said.

The company plans to use projects it is building in Portugal to expand into other core markets, beginning with a focus on mobility opportunities and targeted industrial decarbonization projects. Starting in 2024 the company plans to extend its reach further into North America and also Italy.

U.S. focus

Similar to other international hydrogen players, the passage of the Inflation Reduction Act caused a strategic shift of focus to the U.S. and accelerated Fusion Fuel’s plans to grow its business there, company executives said.

Notably, since Fusion Fuel will use its own technology in the projects it is seeking to develop, a required amount of that technology will need to be manufactured in the U.S. in order to qualify for the full benefits provided in the IRA.

As such, Fusion Fuel is scouting for a location to build one, or possibly two, manufacturing facilities in the U.S.

“The size of the Bakersfield project alone justifies building a new manufacturing facility,” Steele said on the investor call.

Steele was previously CEO of Cedar LNG, a floating LNG development in British Columbia, prior to exiting to Pembina. He works alongside Fusion Fuels Co-Head & CFO, Frederico Figueira de Chaves, who is based in Portugal.

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Quantron kicks off Series B equity raise

The German and American mobility provider is seeking to raise EUR 200m in a Series B equity raise, as the company plans to become a one-stop-shop for hydrogen-powered commercial vehicles, according to a teaser.

Quantron, the Germany and US-based hydrogen trucking manufacturer, is seeking to raise EUR 200m in a Series B capital raise, and has further plans to raise money in a Series C in 2024 or 2025, followed by an anticipated IPO beyond 2025.

The company plans to use proceeds from the Series B accelerate the roll-out of existing production and make additional market entries included expanding its operations in the US, according to a sale teaser seen by The Hydrogen Source. Stifel is leading the capital raise, as previously reported.

By advancing a full-scale zero-emission ecosystem, Quantron is seeking to take part in the sourcing and distribution of green energy and hydrogen, as well as building fuel cell and battery electric vehicles and components and offering customer solutions like aftersales, the teaser notes.

Quantron, which has offices in Augsburg, Germany and Detroit, Michigan, has brought in about EUR 28m in revenues since inception and expects EUR 60m in revenue this year, fueled by a EUR 100m order book and pipeline. The company has put 150 vehicles on the road to date and has 130 employees.

Its Series A capital raise of EUR 45m, completed in September, 2022, implied a EUR 250m pre-money valuation. The ongoing EUR 200m capital raise will come in the form of the Series B financing as well as working capital facilities.

The company recently announced commitments with FirstElement Fuel and Goldstone Technologies Limited. Quantron debuted its Class 8 hydrogen fuel-cell truck in the US at the Advanced Clean Transportation Expo in Anaheim, California in April.

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Carbon-negative materials firm in $40m equity raise

A Texas-based manufacturer of renewable plastics is developing its first plant in the Midwest, with a commercialization date set for 2026.

Citroniq Chemicals, a maker of renewable and carbon-negative plastics, is undergoing a $40m equity raise, according to two sources familiar with the matter.

The process has launched and is being led by Young America Capital, the sources said. The company’s projects account for about $1bn in CapEx.

Based in Houston, Citroniq uses bio-based feedstocks to produce plastics at scale. The company recently signed a Letter of Intent with Lummus Technology for the development of Citroniq’s green polypropylene projects in North America.

“With a projected investment of over $5bn and a combined polypropylene annual capacity of over 3.5 billion pounds, Citroniq is prepared to execute a rapid expansion plan of its E2O process, to meet the market’s growing need for sustainable, carbon negative polypropylene at a competitive price,” Mel Badheka, Principal and Co-Founder of Citroniq Chemicals, said in a press release announcing the LOI. “Located in the Midwest, Citroniq’s first plant is scheduled to start production in 2026 and provide identical, drop-in products that can be directly certified as biogenic through physical testing.”

In January Citroniq announced a separate LOI with Mitsui Plastics for a large-scale supply agreement for sustainable polypropylene.

Citronia and Young America Capital did not respond to requests for comment.

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