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SAF developer closes on development capital investments

The development capital milestone will allow the company to reach FID on a $4.2bn SAF facility in Louisiana.

DG Fuels, a SAF developer, has closed investment transactions with two Japanese companies, according to a news release.

With the investments in DGF made by aviner & co., inc., Chishima Real Estate Co., Ltd. (Chishima) and an undisclosed investor, DGF has now exceeded its minimum investment target as part of its final round of parent level development capital needed to fund the remaining expected expenses required to reach FID, including the ongoing FEL 3 and related expenses.

ReSource previously reported that DGF was working with Stephens and Guggenheim as investment bankers to advance a capital raise.

The relatively modest balance of the maximum $30m capital raise is expected to fund in the next few months. DGF currently expects that FID on its proposed $4.2bn, 180 million gallon per year SAF facility in Louisiana to occur in early 2024.

The Louisiana SAF facility will be the template for multiple other such facilities to be built across North America, Europe and Asia.

Yoshiyuki Shibakawa, representative director of Chishima said, “We believe the SAF to be produced by DG Fuels makes a significant contribution to reducing CO2 emissions in the aviation industry. Through its partnership with DG Fuels, we will contribute to the decarbonization of the aviation industry.”

Aviner, which is active in aircraft management and renewables, has worked closely with DGF as its strategic partner and representative in Japan and broader Asia to market DGF’s SAF product to off-takers in the Asia Pacific region as well as jointly studying potential production of SAF by DGF in the region.

“SAF sits right in between aviation and energy which are the prime focus of ours. We have strong belief in the DGF team and are excited to be part of this project. SAF produced by DGF’s high carbon conversion efficiency technology uses woody biomass feedstock which will not face limitation in feedstock supply and we expect DGF’s technology and know-how can be replicated in various locations around the world.” said Hideyuki Yamanaka, CEO of aviner.

“The DG Fuels facility will produce 180 million gallons of zero carbon emissions SAF,” said Michael C. Darcy, CEO of DG Fuels, The facility itself has a very minor atmospheric emissions and zero water discharge to the local environment and will bring 600 new permanent operating jobs and up to 2,100 construction jobs over three years to the local community.”

“We have worked diligently with our investors in implementing this long-term relationship to mutually focus on decarbonizing the aviation sector in a responsible manner,” said Christopher J. Chaput, president and CFO of DG Fuels. “The DG Fuels SAF product relies on no feedstock that would negatively impact the food supply and our highly efficient production process allows us to profitably sell SAF to airlines at attractive prices.”

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Mining giant Vale partners with Wabtec on alternative fuels study

The deal includes an order for three of Wabtec’s FLXdrive battery locomotives and a collaboration to test ammonia as a potential clean, alternative fuel to replace diesel.

Vale has agreed a partnership with Wabtec Corporation to advance the decarbonization of the company’s rail operations.

The deal includes an order for three of Wabtec’s FLXdrive battery locomotives and a collaboration to test ammonia as a potential clean, alternative fuel to replace diesel.

The three 100% battery powered FLXdrive locomotives will be used on the Carajás Railroad (EFC), which runs the world’s largest iron ore train consisting of 330 railcars transporting 45,000 tons. Today, three to four diesel locomotives pull the train. Once delivered, the FLXdrives will join the diesel locomotives to form Brazil’s first hybrid consist pulling the train uphill for 140 kilometers in Açailândia, in the state of Maranhão, where fuel consumption is the highest. The FLXdrives will replace the two diesel locomotives, known as “dynamic helpers”, that are used to pull the train uphill today.

Wabtec will build the FLXdrive locomotives at its plant in Contagem (state of Minas Gerais). The locomotives’ delivery is forecast for 2026.

“Initially, we are maximizing energy efficiency, replacing the diesel locomotives in the dynamic helper with battery ones, but the idea is that, in the future, the other locomotives on the train can be fueled by ammonia. This way, we would have a clean operation at EFC,” explains Vale’s Director of Energy, Ludmila Nascimento. “This agreement is the first of many that we are seeking in order to accelerate the decarbonization of our railway operation,” she adds.

Vale and Wabtec will work together on a study to use ammonia as a clean alternative fuel, which does not emit CO2. The study will initially be carried out as lab tests to validate performance, emission reductions, and feasibility. Among the advantages of ammonia is the fact that it allows the locomotive a longer range than other carbon-free fuels. In addition, ammonia has a high-octane rating and an established large-scale distribution infrastructure. The two companies will carry out the study in a laboratory over the next two years.

The FLXdrive locomotive’s energy management system recharges the batteries along the route as the train brakes. “It’s what we call regenerative energy produced by dynamic braking. Today, that energy is lost when a traditional locomotive brakes. In the downhill sections, we will be able to recharge the batteries, without having to stop the train’s operation,” said Alexandre Silva, manager of Vale’s Powershift Program. Vale introduced the Powershift Program to study alternative technologies to replace fossil fuels with clean sources in the company’s operations.

The FLXdrive locomotives are estimated to save 25 million litres of diesel per year, considering the consumption of all the railway’s trains that use the dynamic helper. This savings would reduce carbon emissions by approximately 63,000 tons, the equivalent emissions of around 14,000 passenger cars per year.

“Technological advances in battery power and alternative fuels are accelerating the decarbonization journey for railroads,” said Danilo Miyasato, president and general manager of Wabtec for Latin America. “Vale’s innovative approach to adopting alternative fuels for its locomotives will benefit its customers, shareholders, and communities. The FLXdrive provides Vale productivity, safety, fuel economy, and emission reductions for its rail network.”

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ZeroAvia acquires fuel cell innovator HyPoint

ZeroAvia, the American and British provider of zero-emission solutions for commercial aviation, has acquired California-based HyPoint in a bid to advance hydrogen-electric flight.

ZeroAvia, the American and British provider of zero-emission solutions for commercial aviation, has acquired California-based fuel cell stack innovator HyPoint, according to a press release.

The financial terms of the deal were not disclosed.

The acquisition adds HyPoint’s high-temperature fuel cell technology – an avenue for increasing power output and energy density of aviation fuel cell powertrains – to ZeroAvia’s expertise in developing the full powertrain to enable hydrogen-electric flight.

All 40 HyPoint team members will be integrated into ZeroAvia, working across the R&D locations in Kemble, Gloucestershire and HyPoint’s location in Sandwich, Kent.

HyPoint’s CEO Alex Ivanenko joins ZeroAvia as GM for VTOL and New Segments, to develop ZeroAvia’s rotorcraft business applications, and to explore other applications outside of ZeroAvia’s core focus on fixed-wing commercial aviation.

The two companies have worked together on co-developing and testing HTPEM fuel cell technology as part of ZeroAvia’s powertrain development over the last couple of years, with HyPoint relocating the bulk of its R&D into the UK in February 2022 to support the partnership.

This new development comes on the heels of the announcement of a deal with ZeroAvia’s long-term fuel cell partner PowerCell which will see the serial delivery of hydrogen fuel stacks beginning in 2024.

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Biofuels developer seeking to raise $3.5bn for US refinery projects

A biofuels developer has engaged an international bank and is nearing FID on its first project, which produces bio-based ethylene for the plastics industry. It is seeking $3.5bn for four additional refineries.

New Energy Blue, the clean-energy developer of lowest-carbon biofuel and biochemicals from crop residues, today advances its Decarbonizing America agenda by forming New Energy Chemicals.

In phase one, the new biochemical subsidiary will produce American-sourced and American-made bio-based ethylene to enable Dow’s production of low carbon plastics used in everyday life; in phase two, it will expand operations at its Port Lavaca, Texas, facility to produce sustainable aviation fuel (SAF), according to a news release.

“New Energy Chemicals opens multiple pathways to our exponential growth in biobased fuels and chemicals,” says Albury Fleitas, President of New Energy Blue. “We’re particularly excited by our new end-to-end alternative to Brazilian ethanol for making SAF, which will begin in the American Midwest by refining agricultural waste.”

“Flexibility is baked into the process design and business operations of our biomass refineries,” adds CEO Thomas Corle. “We’re not locked into a single product, single market, or single feedstock. New Energy Chemicals gives us 360-degree downstream options for achieving liftoff of an American bioenergy revolution. We can pivot to mitigate market risk, seize growth opportunity, and hit lowest-carbon targets consistently.”

In late 2025, the New Energy Freedom biomass refinery in Mason City, Iowa, will begin converting local corn stalks into 16-20 million gallons a year of highly decarbonized (HD) cellulosic ethanol and 120,000 tons of clean HD lignin. Lignin has high value as a fossil substitute in markets like paving American roads and decarbonizing steel production.

Some of Freedom’s ethanol is destined for California and Oregon auto fuel markets; by meeting their strict low-carbon standards, it will reduce greenhouse gas emissions by over 100% per gallon of gasoline displaced. Millions of HD gallons will also head to Texas, where New Energy Chemicals will convert it into bio-based ethylene, transported via pipeline to Dow’s U.S. Gulf Coast operations for production of renewable plastics across fast-growing end markets.

Dow’s use of bio-based feedstocks from New Energy Blue is expected to be certified by ISCC Plus, an international sustainability certification program with a focus on traceability of raw materials within the supply chain. While Dow intends to mix agriculture-based ethylene into its existing manufacturing process, ISCC Plus’s chain of custody certification would allow Dow’s customers to account for bio-based materials in their supply chains.

Albury Fleitas reports that “strategic and institutional investors are actively involved in our Freedom and Chemicals projects and upcoming expansions. With engineering design completed and major permits secured, we’ve reached the final investment decision (FID) stage. By partnering with an international bank and securing USDA loan guarantees for both project sites, we anticipate ground-breaking this year.”

New Energy Blue has ambitious plans to expand its biomass refineries across America’s 140-million-acre corn belt and wheat basin, harvesting excess straws and stalks to produce billions of gallons of highly decarbonized ethanol. Shorter-term, a six-year strategy calls for attracting $3.5 billion from capital markets to build four new refineries at twice the size of Freedom and provide abundant feedstock to New Energy Chemicals. Taken together, the five refineries are designed to keep over 1,000,000 tons of CO2 out of the atmosphere annually.

Beyond meeting its growing commitments to Dow, New Energy Chemicals’ phase-two expansion can capitalize on both domestic and international demand for SAF since the Port Lavaca site has barge access to deep water shipping.

Substantial European demand by 2030 is expected from the ReFuelEU Aviation initiative, which aims to mandate a SAF blending requirement at EU airports. In addition to ramping up its biomass refinery build-out, New Energy Blue plans to license its platform globally to accelerate the production of low-carbon, plant-based feedstock for HD auto fuel, SAF, and other biochemicals.

According to the U.S. Sustainable Aviation Fuel Grand Challenge, the American SAF goal is 3 billion gallons a year by 2030, 35 billion gallons by 2050. “U.S. carbon-reducing incentives have ignited a $400 billion SAF market,” Fleitas notes. Lifecycle analysis of the company’s refinery project consistently exceeds the required 50% reduction in GHG emissions compared to ethanol made from corn grain or sugar cane. New Energy Chemicals is expected to pre-qualify for maximum decarbonizing credits, giving it an advantage in a competitive capital marketplace.

The HD ethanol-to-ethylene process employed by New Energy Chemicals is most likely compatible with conventional jet fuel methods of production, using a technology pathway similar to Brazilian ethanol-to-SAF conversion.

“Except there’s a significant gap in decarbonization scores,” says Kelly Davis, Vice President, “and that gives our future SAF a dramatic edge in getting the airlines closer to their net-zero goal for GHG emissions. It’s an extra advantage that comes from using American-sourced leftovers from the annual grain harvest.”

Because of process design flexibility, New Energy Blue biomass refineries can also convert wheat, barley, and rye straws. In arid regions where food crops can no longer grow, the company intends to restore American grasslands by planting and harvesting perennials like arundo donax and miscanthus.

“Decarbonizing America is a big ask for a big task,” Corle says. “Those 140 million acres of U.S. grain provide enough stalks and straws and grasses to feed 500 refineries and produce 20 billion gallons of exceptionally low-carbon ethanol annually. That’s how you decarbonize SAF and Dow’s renewable plastic materials, how you make a dent in replacing oil refining with biomass refining.

“It starts with a biomass refinery in Mason City, Iowa and New Energy Chemicals conversion operations in Port Lavaca, Texas. But we’re already forging partnerships with governments, customers, and developers across CanadaEuropeAsia, and Africa. Inviting them to work collaboratively towards sustainable decarbonization with global impact.”

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Avangrid touting green hydrogen opportunity in onshore renewables sale

Advisors selling up to 50% of the company’s US onshore renewables platform are pitching the value-enhancing potential of green hydrogen development in the process.

Avangrid is touting the opportunity to develop a major pipeline of green hydrogen projects as it prepares to collect initial bids for a stake in its US onshore renewables platform, according to two sources familiar with the matter.

The Portland, Oregon-based clean energy firm, which is owned by Spain-based Iberdrola, is running a process to sell up to a 50% stake in roughly 9.6 GW of operational projects and an 18 GW development pipeline, the sources said. The process launched in March with Lazard and Rothschild on the sellside.

As part of the platform’s opportunities for value enhancement, the company is promoting the potential for green hydrogen, with a sale teaser noting that parent Iberdrola is a global leader in green hydrogen development with two operational projects and 60 in development.

“[Avangrid] Onshore Renewables intends to leverage this experience to become an early leader in hydrogen project development in the US,” the teaser reads, stating a goal of building out some 900 MW of green hydrogen projects by 2035.

The company is also involved in seven “hydrogen hub” regions in the US: regions participating in the Department of Energy’s grant process for funding under the Bipartisan Infrastructure Act.

Avangrid last year signed an MoU with Sempra Infrastructure to develop large-scale green hydrogen and ammonia projects powered by renewable sources. The teaser notes that the company is advancing a flagship joint development project and initiating conversations with offtakers.

The operating renewables portfolio for sale includes 8.7 GW of wind power and some 300 MW of solar in Pennsylvania, Colorado, California, New York, Iowa, and North Carolina, along with the 536 MW Klamath cogeneration plant in Oregon. The development pipeline has roughly 14.2 GW of solar and solar-plus-storage capacity and 3.8 GW of wind.

Avangrid declined to comment. Rothschild and Lazard did not respond to requests for comment.

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New clean fuels firm takes first external financing

A clean fuels startup aiming to provide turnkey decarbonization solutions will be in the market for additional capital shortly.

Elemental Clean Fuels has closed on its first round of external financing from investors Piney Point Capital and Fusion Fuel Green plc, according to a company spokesperson.

The money will be used to build out the company’s pipeline and add new projects, which it plans to develop, own and operate. Clean fuels would be produced from renewables via electrolysis, followed by storage and transportation solutions, according to the company’s website.

Capital investment provided by Piney Point will be utilized by ECF to further develop its existing decarbonization portfolio in North America, as well as to expand its internal capabilities and add additional project assets (including the projects contributed by Fusion Fuel), according to a news release.

ECF is a business venture of CEO Zach Steele and CFO Jason Baran, former executives of Fusion Fuel who have executed and managed over $3bn in development projects in North America. They are joined by CDO Jeff Crone, a former vice president of engineering and construction services at Buckeye Partners.

In parallel, Fusion Fuel has also entered into a strategic technology partnership with Elemental, granting Fusion Fuel the right to bid on all PEM-based green hydrogen projects in Elemental’s North American pipeline for a period of three years, according to a release from Fusion Fuel.

Elemental has approximately 40 MW in pre-feasibility projects within its pipeline and is currently collaborating with Fusion Fuel on a feasibility study for a 2 MW green hydrogen project for a state utility to be delivered in 2024. This partnership will provide Fusion Fuel with exposure to the emerging North American green hydrogen market, whilst enabling the company to focus its near-term commercial efforts on the Iberian Peninsula and Northern Europe.

“We are extremely excited to have Piney Point as a partner as we progress our mission to drive growth in the emerging clean fuels market,” said Steele. “With investments in a broad range of companies across the energy transition, they are uniquely positioned to provide strategic partnerships and additional access across the value chain to drive scale.  Piney Point’s investment and expertise will accelerate the growth of our Company in the mobility and heavy industry sectors throughout North America.  We are also excited and optimistic about continued collaboration with Fusion Fuel going forward.”

“As investors, Piney Point Capital recognizes the immense potential of ECF in revolutionizing the clean fuel landscape. We believe in the vision and capabilities of the ECF team, and we are committed to supporting their mission to accelerate decarbonization through innovative projects and strategic partnerships across North America,” said Mike Keough, managing partner Piney Point Capital, a subsidiary of Racon Capital.

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Exclusive: Residential microgrid developer to seek electrolysis partner, raise capital

A developer of planned microgrid communities will look for an electrolysis partner to provide green hydrogen for use in agricultural applications and is planning to go to market for platform equity and project debt.

Embark Fund and NOVA Constructors, a group of real estate development interests focused on developing three planned residential communities, will look for an electrolysis partner for its community microgrid development efforts, managing partner Craig McBurney said in an interview.

McBurney, who is also solar development manager for the South Carolina-based renewables developer Alder Energy, said the partners are in the process of acquiring land – between 1,500 and 2,000 acres per parcel – in Virginia, Maryland and Illinois. The latter project is the most advanced.

Each is for a planned residential community including microgrid development, he said. The communities will include renewables, which could be used to power electrolysis during times of low demand. He gave the example of a 30 MW solar ground array.  

“We are preparing to announce a [$60m to $80m] equity raise,” McBurney said, adding that between $240m and $300m of debt will also be required. The money will be used for site acquisition, development and EPC. “The whole capital stack is an opportunity.”  

The group has not formally engaged with an investment bank or financial advisor, he said. They will be targeting private equity, sovereign wealth funds, and family offices.

McBurney pointed to communities like Whisper Valley in Texas and Babcock Ranch in Florida as examples of his group’s efforts to develop sustainable off-grid communities.

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