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TES raises €140m in third fundraising round

The fundraising attracted a global investor base including Azimut Group, Fortescue, E.ON, HSBC, O.G. Energy, Zhero and others.
Tree Energy Solutions, a developer of e-NG projects, has raised €140m in its third fundraising round.
This new capital will be used to develop TES’ global portfolio of green energy production and import projects. The fundraising attracted a global investor base comprising leading financial institutions and energy investors, including Azimut Group, Fortescue, E.ON, HSBC, O.G. Energy, Zhero and others, according to a news release.
MW&L Capital Partners acted as the exclusive financial advisor and placement agent to TES. Burggraaf & Hoekstra acted as the legal advisor to TES.
e-NG is a hydrogen-based green molecule chemically identical to natural gas and obtained by combining green hydrogen with biogenic or recycled CO2. e-NG is easy to transport and store using existing infrastructure and is a true drop-in green solution for industry and customers looking to decarbonise.
TES has developed strategic partnerships with a number of leading energy companies, including TotalEnergies, Osaka Gas, Toho Gas, Tokyo Gas, Fortescue and ADNOC, to create a leading pipeline portfolio of large-scale e-NG projects across North America, The Middle East, Australia and Europe.
TES is also developing a green energy hub in the German port of Wilhelmshaven. The hub is a significant element in TES’ commitment to decarbonise the German and neighbouring energy markets by facilitating the import of natural gas and e-NG, export of CO2 and production of green hydrogen and green power.
Marco Alverà, Co-founder and CEO of TES, said: “We are excited to announce this significant new milestone. The fundraising is an important step on our journey to deliver affordable e-NG and hydrogen. This newly raised capital will be used to advance the development of our upstream and downstream e-NG projects internationally. Our sustainable business model has attracted world-class strategic and financial partners to continue executing on our projects.”
Marcel and Paul van Poecke, co-founders and co-chairmen of TES, in a joint statement added: “Congratulations to Marco and team for continuing the successful execution of our plan. We are delighted to be well supported by our existing investor base and to have attracted new, well regarded, investors who share our vision for the company.”

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CIB providing $277m for Varennes biorefinery JV

CIB will provide a loan of $277m to a joint-venture partnership between Shell, Suncor, Proman and the government of Québec.

Canada Infrastructure Bank will provide a loan of $277 million to a joint-venture partnership between Shell, Suncor, Proman and the government of Québec that will enable construction of Canada’s largest biorefinery, the Varennes Carbon Recycling facility, according to a news release.

The $1.2bn facility will include an electrolyzer which will supply clean hydrogen and oxygen to convert more than 200,000 tonnes of non-recyclable waste and residual biomass into biofuels with a capacity of up to 130 million litres annually.

The project will be using Enerkem’s proprietary thermochemical process.

This is CIB’s first project from its low-carbon fuels, carbon capture utilization storage and hydrogen initiative.

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Infinium to purchase Permian CO2 for e-fuels

e-fuels firm Infinium will purchase CO2 captured in the Permian Basin for utilization as feedstock for e-SAF.

eFuels firm Infinium has reached an agreement with a subsidiary of midstream energy company  Kinetik Holdings Inc. to purchase carbon dioxide captured from Kinetik’s gas gathering and processing system in the Permian Basin for use as a feedstock in the production of ultra-low carbon electrofuels, according to a news release.

Infinium eFuels are created through a proprietary process using waste CO2 and green hydrogen derived from renewable power.

The agreement is unique in its long-term nature and broad decarbonization benefits, providing measurable impacts for transportation alternatives. It provides a model for the industry to rethink how to contract waste streams such as CO2 for use in solutions that provide beneficial reuse of emissions.

“There are many roles to be played in the energy transition, and this partnership shows that eFuels production and utilization is truly a win-win for all in the energy industry,” said Infinium CEO Robert Schuetzle. “It’s great to welcome Kinetik into our community of companies seeking beneficial reuse solutions for its CO2. The agreement demonstrates major progress and shows Kinetik’s leadership relative to the existing traditional oil and gas sector’s carbon emissions strategies.”

Under the terms of the agreement, a subsidiary of Kinetik will dedicate CO2 from one of its amine gas processing facilities in West Texas to Infinium for use at its previously announced second eFuels project called Project Roadrunner. Project Roadrunner will deliver products into both U.S. and international markets. It will primarily produce Infinium eSAF, a sustainable aviation fuel with the potential to significantly reduce the lifecycle greenhouse gas emissions associated with air transportation.

“Our partnership with Infinium reinforces Kinetik’s commitment to sustainability and our role as an agent for change. As the first step of Kinetik’s New Energy Ventures, I am excited to announce our participation in Project Roadrunner and strongly support Infinium’s mission to significantly reduce carbon emissions. Kinetik remains committed to further decarbonize our footprint and advance new low carbon technologies as part of our strategy of ‘energy for change,'” said Jamie Welch, Kinetik’s President and CEO.

Infinium previously announced a $75m equity commitment from Breakthrough Energy Catalyst for investment in Project Roadrunner, the first for the novel Bill Gates-founded platform that funds and invests in first-of-a-kind commercial projects for emerging climate technologies. American Airlines is the first announced offtake partner for eSAF produced at Project Roadrunner with emission reductions going to Citi, further modeling how long-term, innovative agreements contribute to decarbonization across multiple industries’ value chains.

Infinium operates the world’s first commercial scale eFuels facility in Corpus Christi, Texas and has more than a dozen projects in various stages of development globally.

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Renewable fuels developer attracts investment from Sumitomo, pivots to SAF

Louisiana developer Strategic Biofuels has attracted investment from Sumitomo Corporation of the Americas and pivoted its flagship project to produce sustainable aviation fuel.

Strategic Biofuels, the developer of a renewable fuel plant in Louisiana, and Sumitomo Corporation of Americas (SCOA), a subsidiary of Sumitomo Corporation, have entered into a Joint Development Agreement for the Louisiana Green Fuels (LGF) project at the Port of Columbia in Caldwell Parish, Louisiana.

SCOA will take an anchor position and lead the formation of a Japanese-based investment consortium aimed at funding the majority of development capital needed to carry the project to Financial Investment Decision (FID) and commencement of construction in early 2025, according to a news release.

As part of the agreement, SCOA will also acquire rights at FID to participate for a portion of the full project equity requirement. In a decisive strategic shift related to the investment, Strategic Biofuels also unveiled plans to change its primary renewable fuel product to sustainable aviation fuel (SAF). SCOA intends to provide a 20-year offtake for the approximately 640 million gallons of renewable fuels produced as well as all state and federal renewable fuel credits.

“Our goal has always been to bring online a fuels plant contributing to a sustainable future, and we are thrilled to have SCOA as our partner in our LGF endeavor. The shift to SAF is an exciting moment for us and our partners, for the energy landscape in Louisiana and for the greater global energy transition overall,” said Dr. Paul Schubert, CEO of Strategic Biofuels. “Although we have a lot of work ahead of us, our team is fully prepared to advance the project to FID and supply SCOA with SAF.”

When the LGF project was first announced, Strategic Biofuels garnered recognition for the extraordinarily low carbon footprint of the planned renewable diesel fuel product. The footprint of SAF that will now be produced is expected to be so low that just one gallon of it blended with three gallons of fossil-derived jet fuel will reduce the dependency on carbon in the future. To achieve this carbon reduction in 2029, the LGF plant will utilize:

  • Approximately 1 million tons per year of forestry waste as the feedstock for the biorefinery;
  • Green energy from an integrated biomass-fired power plant that will take nearly 1 million tons of sawmill waste annually to produce 86 megawatts of power; and
  • Geologic carbon sequestration of 1.36 million metric tons per year of CO2 produced from both of those operations to create this fuel which is equivalent to removing nearly 300,000 passenger cars from the road, making it a product much in demand by the aviation industry.

“Our partnership with Strategic Biofuels is just another example of our commitment to support the energy transition within the Americas,” said Sandro Hasegawa, General Manager, Energy Innovation Initiative Americas at SCOA. “Supporting the LGF project means bringing groundbreaking technology to the Port of Columbia that enables the local economy and sustains the natural environment. We look forward to leading the investment with our partners in Japan and demonstrating what can be accomplished when global players work together.”

This investment commitment from SCOA continues the path from 2023, which was a year of rapid project advancement for LGF. Most recently, Strategic Biofuels announced that the Louisiana Department of Environmental Quality had issued an Air Permit for the integrated LGF facility, an industry “first of its kind” in Louisiana and a major step forward for the project. This followed an agreement with SLB, a global technology company, to provide its industry-leading technical services for the company’s planned carbon sequestration complex. Earlier in the year, the EPA deemed the project’s Class VI permit application for carbon sequestration as “administratively complete,” which included extensive geologic data collected from LGF’s 2021 Class V stratigraphic test well.

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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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California renewables developer taps advisor for capital raise

Utility-scale solar and storage developer RAI Energy has tapped an advisor for a capital raise. The company is evaluating co-development conversion for green ammonia production at projects in Arizona and California.

RAI Energy, the utility-scale solar and storage developer, has hired an advisor as it pursues a capital raise.

The company is working with Keybanc Capital Markets in a process to raise up to $25m, according to two sources familiar with the matter.

In an interview, RAI Energy CEO and owner Mohammed S. Alrai said the company “is excited about having [Keybanc] act as our financial advisors on this fundraising round.” He noted that RAI is first a solar-plus-storage developer and is approaching investors as such.

However, RAI is evaluating co-development conversion for green ammonia production at two of its project sites in Arizona and California, he said.

“Hydrogen is a natural next step,” Alrai said of his company, adding that the end-product would be green ammonia for use in fertilizer production and industrial sectors. Pure hydrogen could also be kept for use in transportation.

A variety of partnerships would be required to develop hydrogen at RAI’s solar sites, Alrai said. The company could need advisory services to structure those partnerships.

RAI is working with engineers on the hydrogen question now and is open to additional technology and finance advisory relationships, he said. The company is also evaluating several electrolyzer manufacturers.

“It’s an open book for us right now,” Alrai said of hydrogen production. “We’re always open to talking to people who can help us.”

For hydrogen project development, RAI would seek project level debt and equity similar to its solar developments, Alrai said. Early-stage project sites in Colorado and New Mexico could also be candidates for hydrogen co-development.

Keybanc delined to comment for this story.

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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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