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Exclusive: Seattle biomass-to-chemical firm planning equity round

A firm with plans for a biorefinery in Washington state will raise its first large equity round early next year.

Planted Materials, a Seattle-based biomass-to-chemicals company, is in early design stages for its first biorefinery in eastern Washington state and planning to raise an equity round in early 2025, co-founders Noah Belkhous and Greg Jenson said in an interview.

The company will seek to raise between $10m and $20m ahead of FID on the biorefinery, Belkhous said. The four-year-old company has raised $500k from angel investors to date and is currently raising another $1m from high net worth individuals in the Seattle region.

Planted Materials does not have a relationship with a financial advisor but is open to one, Belkhous said.

The company’s recycling model takes municipal landfill waste and converts it to chemical materials for pharmaceutical, paper, plastic and other manufacturing industries.

The proprietary recycling process is something the company would like to license to municipalities in the US and abroad, in addition to building biorefineries in the Pacific Northwest, Belkhous said. The company’s lab is currently based in the Ballard neighborhood of Seattle.

Early design work on the first biorefinery is underway. The duo expects CapEx to cap at $50m, reaching FID in 2026 and beginning construction that year.

While the majority of the company’s feedstock will likely come from the major metropolitan regions in the western PNW, refining capacity is more attractive in the east for reasons of space and existing waste management infrastructure. Jenson noted the presence of the relevant research campus of Washington State University in Pullman, as well as the Pacific Northwest National Laboratory in Richland.

Recently, the team accompanied Washington Governor Jay Inslee and members of the Washington State Department of Commerce on a trip to Sydney and Melbourne in Australia. The company has applied to a pair of $350k grants from the state.

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Infinium and Amogy sign MoU for e-fuels applications

The low-carbon fuels startups will explore e-fuels applications, with a focus on the potential integration of Amogy’s ammonia-cracking technology to provide green hydrogen feedstock as an input to produce Infinium’s eFuels.

Infinium and Amogy Inc. have entered into a memorandum of understanding (MOU) to explore opportunities to integrate their technologies and develop commercial applications across the eFuels and green ammonia value chain. Infinium and Amogy are also exploring collaborations with both Mitsubishi Heavy Industries (MHI) Group and SK Innovation for deployment of the integrated solution, according to a news release.

To accelerate the decarbonization of heavy industry sectors, the companies will jointly study and identify the most suitable applications to deploy their eFuels and green ammonia solutions. A key focus of this collaboration is the potential integration of Amogy’s ammonia-cracking technology to provide low-cost, accessible green hydrogen feedstock as an input to produce Infinium’s eFuels.

Infinium eFuels, also known as electrofuels or Power-to-X, are made from green hydrogen and waste carbon dioxide (CO2) in a proprietary process. Amogy’s ammonia-cracking technology leverages its state-of-the-art catalyst materials to crack ammonia into hydrogen and nitrogen at lower reaction temperatures with high durability, reducing heating and maintenance requirements.

Upon identifying promising applications, Infinium and Amogy will initiate strategic pilot programs, showcasing tangible and scalable implementations of their clean technology solutions. The partnership also entails the evaluation of additional opportunities for collaboration within the eFuels and ammonia spaces, with a focus on the development of commercial use cases.

“Ingenuity and collaboration are critical to creating decarbonization solutions today. Our partnership with Amogy will go a long way toward helping advance our ability to rapidly scale the production of ultra-low carbon Infinium eFuels, including eSAF, eDiesel and eNaphtha,” said Robert Schuetzle, CEO at Infinium.

“We are thrilled to forge this alliance with Infinium. By uniting our expertise and resources, we aim to unlock innovative opportunities that will pave the way for sustainable solutions,” says Seonghoon Woo, CEO of Amogy. “This partnership reflects a shared commitment to accelerating technologies that can contribute to the reduction of carbon emissions in the heavy industry sectors.”

Mitsubishi Heavy Industries (MHI) has invested in both Infinium and Amogy and is exploring potential collaboration for new solutions and applications in energy sector project development.

“Decarbonizing heavy industries requires numerous approaches that can concurrently and collaboratively help mitigate greenhouse gas emissions,” said Ricky Sakai, senior vice president of new business development at MHI of America. “We are excited to see how Amogy’s emission-free, energy-dense ammonia solution and Infinium’s proprietary eFuels production process might be aligned to overcome challenges and accelerate the global availability of commercial decarbonization solutions.”

SK Trading International (SKTI) invests in solutions that contribute to addressing climate change and environmental pollution and is an investor in Infinium while its parent company SK Innovation has invested in Amogy.

“Our global goals to slow the warming of the planet require significant efforts so they can quickly scale, find synergies, and explore new pathways,” said Hyunchol Park, managing director and head of global trading at SKTI. “Infinium and Amogy are leaders in their progress and proven solutions, and I believe their partnership will result in the identification of breakthrough opportunities to expand and grow access to cleaner fuels.”

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bp selects Honeywell technology for 5 SAF facilities

bp will use Honeywell’s Ecofining technology at five sites in the US, Europe, and Australia.

bp has selected Honeywell’s Ecofining™ technology to help support the production of sustainable aviation fuel (SAF) at five bp facilities across the globe, according to a news release.

Honeywell UOP Ecofining technology will be installed at the following bp sites: Cherry Point refinery in Blaine, Washington; Rotterdam II refinery in Rotterdam, Netherlands; Lingen refinery in Lower Saxony, Germany; Castellón de la Plana refinery in Castellón, Spain and Kwinana Oil refinery in Kwinana, Australia.

Ecofining is a proven, ready-now technology, and its simplified design provides bp a capital and cost-efficient solution to increase bp’s SAF production from renewable feeds. It will help bp achieve its aim to supply 20% of the SAF market globally by 2030.

SAF produced from Honeywell’s Ecofining technology is certified for use according to international standards. It can be used as a drop-in replacement without engine modifications and currently can be used in blends of up to 50 percent with the remainder as conventional (fossil-based) jet fuel.

“bp has an established global biofuels business that is positioned for rapid growth utilizing Honeywell’s technology. The world’s demand for SAF is set to increase dramatically and bp seeks to play an important role in helping the airlines to decarbonise,” said Nigel Dunn, senior vice president biofuels growth, bp.

“Demand for Ecofining has more than doubled in the last two years, and Honeywell has now licensed 35 Ecofining plants around the world with a total production capacity in excess of 400,000 barrels per day,” said Lucian Boldea, president and CEO of Honeywell Performance Materials and Technologies. “Honeywell helped pioneer SAF production with its Ecofining process, which has been used to produce SAF commercially since 2016.”

“The Honeywell UOP Ecofining process, developed in conjunction with Eni SpA, converts non-edible natural oils, animal fats and other waste feedstocks to renewable diesel and SAF, and can reduce GHG emissions up to 80% when compared to the emissions from fossil fuels,” added Boldea.

Honeywell now offers solutions across a range of feedstocks to meet the rapidly growing demand for renewable fuels, including SAF. In addition to Honeywell UOP Ecofining, Honeywell’s renewable fuels portfolio includes Ethanol to Jet technology and the recently announced Honeywell UOP eFining™, which converts green hydrogen and carbon dioxide into e-fuels.

Honeywell recently committed to achieve carbon neutrality in its operations and facilities by 2035. This commitment builds on the company’s track record of sharply reducing the greenhouse gas intensity of its operations and facilities as well as its decades-long history of innovation to help its customers meet their environmental and social goals. About 60% of Honeywell’s 2022 new product introduction research and development investment was directed toward ESG-oriented outcomes for customers.

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Hyundai Motor North America appoints head of commercial vehicle and hydrogen business development

Jim Park will be responsible for Hyundai’s hydrogen initiatives in North America, which includes commercial vehicle sales, infrastructure development, commercialization of hydrogen, and related future mobility solutions.

Hyundai has hired Jim Park as the senior vice president, commercial vehicle and hydrogen business development, Hyundai Motor North America, effective June 12, according to a news release.

In this new role, Park is responsible for Hyundai’s hydrogen initiatives in North America, which includes commercial vehicle sales, infrastructure development, commercialization of hydrogen, and related future mobility solutions.

Park reports directly to José Muñoz, president and CEO, Hyundai Motor North America and president and Global COO of Hyundai Motor Company, and functionally via dotted-line to Ken Ramirez, executive vice president, head of global commercial vehicle and hydrogen business, Hyundai Motor Company.

“Hyundai is committed to accelerating the development of hydrogen technology as it provides a scalable zero-emissions solution for a variety of applications,” said Muñoz. “Jim’s extensive career in automotive business development will help us build the team and obtain the tools and resources we need to continue our hydrogen expansion in North America.”

Park has more than three decades of experience in the automotive industry with leadership roles at both Harman-Samsung and Chrysler. Prior to joining Hyundai, Park was president of Harman International Korea, where he initiated strategies for its automotive business units and Samsung’s Automotive Electronic Business. He managed and led four divisions including connected car, car audio, consumer electronics and professional solutions, and oversaw respective KPI’s such as sales revenue growth, market share, cost management, compliance, and employee development.

Before joining Harman International, Park was the president and CEO of Global Auto Systems, an advisory and consulting services company he formed in 2000, a role he held until 2018. In nearly two decades, his group of consultants worked with leaders and top decision makers around the world providing in-depth industry insights, product, market knowledge and strategic perspectives. Park also previously served on the Board of Governors for the American Chamber of Commerce in Korea.

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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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Exclusive: Green hydrogen developer planning capital raises for distributed portfolio

A developer of US green hydrogen projects will need to access the project equity, debt and tax equity markets in the near term for a pipeline of distributed assets nationwide.

NovoHydrogen, the Colorado-based renewable hydrogen developer, will be in the market for project financing for a portfolio of distributed green hydrogen projects in 2024, CEO Matt McMonagle said.

The company, which recently agreed to a $20m capital raise with Modern Energy, is aiming to attract additional private equity and infrastructure investors for the projects it is developing, the executive said.

“The opportunity is really there for attractive risk-adjusted returns at the project level based on how we’re structuring these projects with long-term contracted revenue,” he said.

The company plans to bring its first projects online in late 2024 or 2025.

“We don’t have the project financing set at the point that we can announce, but that’s something myself and my team have done in our careers,” McMonagle said, adding that he’s focused on bankability since founding the company. “We wanted to be as easy for the lenders to underwrite as possible.”

No financial advisors have been attached to the project financings, McMonagle said. A recently announced Series A, first reported by ReSource in February, gave the company exposure to investors that want to participate in project financings, he said.

“We’ll really be ramping that process up, likely after the new year,” McMonagle added, declining to say how much the company would need to raise in 2024.

NovoHydrogen doesn’t have a timeline on a Series B, he said.

Distributed pipeline

The company looks to do onsite projects adjacent to consumption, McMonagle said. The first projects that will go online will be 10 MW and smaller.

“Typically the permitting is straightforward in that we’re adding equipment to an already impacted industrial site,” McMonagle said. He declined to elaborate on where these projects are located or what customers they will serve.

The company also has off-site, or near-site projects, where production is decoupled from consumption. But the company still calls those distributed because they are being developed with a targeted customer in mind.

“We want to be as close as possible to that customer,” he said. Those off-site projects typically are larger and will begin coming online in 2026 and 2027.  

In Texas NovoHydrogen has two large-scale green hydrogen developments in production, co-located with greenfield renewables projects, McMonagle said. Partners, including EPC, are in place for those efforts. The company also has projects in West Virginia, Pennsylvania, New Jersey and along the west coast.

“Where can we add the most value and have the biggest competitive advantage?” McMonagle said of the company’s geographic strategy. “We have very specific go-to-markets in each of those regions which we feel play to our strengths.”

NovoHydrogen is a member of the Pacific Northwest Hydrogen Hub and is involved with the Appalachian Regional Clean Hydrogen Hub (ARCH2), though not in line to receive DOE funding through that hub.

Post-IRA, green hydrogen projects will look much like renewables deals from the equity, tax equity and debt perspectives, he said.

“We’re structuring and setting up our projects to take advantage of that existing infrastructure and knowledge base of how to finance deals,” he said. New options on transferability will enable additional financing options as well.

No flipping

NovoHydrogen does not plan to flip projects before COD, McMonagle said.

“We are planning to deploy hundreds of millions if not billions of dollars in capex for these projects, and we’ll certainly need to partner with folks to deploy that capital,” McMonagle said. “But we will remain in deals with our customers because that relationship is really the fundamental value that we bring in our business.”

Hydrogen projects are different from renewables in that the customers need greater assurances of resiliency, security of supply and performance, than in a space like solar, he said.

Flipping projects before COD would be inconsistent with the trust required to attract offtakers.

“We don’t believe doing a flip reflects that level of importance and support and, frankly, incentive, behavioral incentive, that we have to show to our customers,” he said.

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3Q deals in focus: Macquarie’s investment in Atlas Agro

In one of the largest and most compelling clean fuels deals of 3Q23, Macquarie made a $325m investment into Americas-focused Atlas Agro, a developer of industrial-scale green nitrogen fertilizer plants that utilize green hydrogen as a feedstock. William Demas, head of Macquarie Asset Management Green Investments in the Americas, provides a closer look.

Macquarie Asset Management’s investment into green nitrogen developer Atlas Agro gives the manager a stake in the company along with the ability to invest in the developer’s projects.

The $325m investment, made via the Macquarie GIG Energy Transition Solutions fund, will benefit Atlas Agro’s previously announced fertilizer plant project in Richland, WA, and will also support the company’s global pipeline of green fertilizer facilities, according to William Demas, head of Macquarie Asset Management Green Investments in the Americas.

In addition to the 700,000 tons-per-year Richland project, Atlas Agro is pursuing a project in Minas Gerais, Brazil that will produce 500,000 tons per year. Both projects would make nitrate fertilizer and are estimated to cost $1bn. An additional facility is planned for the US Midwest.

In the production process, the plants utilize air, water, and renewable electricity as the only raw materials.

“There are a number of things that attracted us to Atlas Agro,” Demas said in response to written questions. “They have a strong management team with an established track record managing established companies and delivering projects in the fertilizer space.”

The GIG Energy Transition Solutions fund has a target size of approximately $1.9bn, which to date is just over 50% committed, according to a source familiar with the fund.

Next phase

Equally important for the Atlas investment, Demas added, is that the company is aligned with Macquarie’s next phase energy transition thesis in the US – in this case hydrogen. 

“In this application, green hydrogen will be used as a feedstock rather than as an energy carrier, and the end-product of green fertilizer will attract customers looking to enter into long-term offtake contracts,” he said.

Through the development of plants in Washington state and the US Midwest, Atlas Agro is seeking to take advantage of favorable logistics to displace the need for imported fossil-fuel based fertilizer. Brazil also imports around 95% of its nitrogen fertilizers, according to Atlas.

“An important benefit of Atlas Agro’s model is the availability of locally produced, high-quality fertilizer, eliminating many of the issues associated with international supply chains,” Demas said, noting that offtakers are local to Atlas Agro’s operations.

Further, Macquarie and Atlas plan to pursue a project finance model for funding the projects under development.

“As an infrastructure investor, we focus on opportunities that are bankable, which means, ultimately project financeable,” Demas said. “We backed Atlas Agro because we believe their approach to project development, commercialization, construction and operations aligns with our views on how to underwrite infrastructure investments.”

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