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Topsoe to license waste-to-fuel technology

The agreement with Steeper Energy will allow Topsoe to provide a waste-to-fuel technology solution for sustainable aviation fuel, marine biofuel, and renewable diesel from waste biomass.

Denmark-headquartered Topsoe, a developer and provider of carbon emission reduction technologies, has signed a global licensing agreement for a complete waste-to-fuel solution with Steeper Energy.

With the agreement, Topsoe will be able to provide a complete waste-to-fuel technology solution and at the same time a one-stop solution for refineries, project developers, and industries having access to excess waste biomass, according to a news release. The end-products include sustainable aviation fuel (SAF), marine biofuel, and renewable diesel from waste biomass.

“This will make it easier for refineries and project developers to access the technology they need for advanced biofuels,” Peter Vang Christensen, senior vice president, Clean Fuels & Chemicals – Technology, Topsoe, said. “It will also allow them to access new renewable feedstocks while supporting decarbonization of the transportation sector, not least aviation and shipping.”

“Steeper recognizes Topsoe as a world leader in developing and implementing renewable refining technologies. Steeper’s Hydrofaction™ process, when combined with Topsoe’s technology, completes the pathway from biomass waste to drop-in liquid fuels and is compatible with existing refining infrastructure,” Bevan May, president, Steeper Energy, said. “This reduces capital requirements and allows for the accelerated deployment of these solutions. We are excited to combine our efforts with Topsoe and bring our joint solution to the renewable liquid fuels market.”

Steeper’s Hydrofaction™ has been validated through various stages of continuous pilot and demonstration-scale plant operations over the past 10 years.

With this agreement, the parties are working towards the first commercial scale deployment of Hydrofaction™ technology.

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Clean fuels developer in negotiations to finance West Texas projects

MMEX is in negotiations with international banks to raise capital for green and blue ammonia projects as well as a clean fuels refinery in West Texas.

MMEX, a developer of clean fuels projects, is talking with international banks to raise debt and equity for green and blue ammonia projects as well as a clean fuels refinery in West Texas.

Fort Stockton, Texas-based MMEX is seeking to advance both green and blue hydrogen projects on the same site in Pecos County, with the green hydrogen project expected to cost between $850m – $900m at “2x capacity,” according to a company presentation.

Meanwhile, estimated capex for the blue hydrogen project is $1.25bn, according to a separate presentation.

MMEX, which is led by oil industry veteran Jack Hanks, recently tendered to provide 209,300 tons of green ammonia, equivalent to 25,000 tons of delivered hydrogen, to an oil major and chemical company. The green hydrogen would be produced on site and transported via rail to Corpus Christi.

MMEX has partnered with TotalEnergies to provide solar power for both the green and blue projects. 

For the green hydrogen project, MMEX says it would install seven Siemens Sylizer electrolyzers rated at 17.5 MW each, producing 55.4 tons of green hydrogen, or 209 tons per day of ammonia.

The company estimates a 24-month construction to COD timeline from financial close for the green hydrogen project.

The blue hydrogen project, with an estimated 30-month construction timeline, would produce 450 tons per day via Topsoe auto thermal reformer. 

Additionally, MMEX is seeking to construct a clean fuels refinery which would take in crude oil and produce gasoline and ultra-low-sulfur diesel.

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European Commission establishes €3bn hydrogen bank

The new European Hydrogen Bank will guarantee the purchase of hydrogen, with a commitment of €3bn aimed at bridging the investment gap.

President of the European Commission (EC) Ursula von Der Leyen today announced the creation of a new European Hydrogen Bank aimed at bridging the hydrogen investment gap and connecting future supply and demand.

The new European Hydrogen Bank will guarantee the purchase of hydrogen using resources from the Innovation Fund, with an investment of €3 billion to help build the future market for hydrogen, von der Leyen said during the State of the Union address.

“And hydrogen can be a game changer for Europe. We need to move our hydrogen economy from niche to scale. With REPowerEU, we have doubled our 2030 target to produce ten million tons of renewable hydrogen in the EU, each year.

“To achieve this, we must create a market maker for hydrogen, in order to bridge the investment gap and connect future supply and demand. That is why I can today announce that we will create a new European Hydrogen Bank.

“It will help guarantee the purchase of hydrogen, notably by using resources from the Innovation Fund. It will be able to invest €3bn to help building the future market for hydrogen. This is how we power the economy of the future. This is the European Green Deal,” according to a transcript of her remarks.

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SOEC electrolyzer maker Sunfire attracts EUR 500m

German electrolyzer maker Sunfire added new equity investors including GIC and secured a loan from the European Investment Bank.

The German electrolyzer manufacturer Sunfire has raised EUR 215 million in a Series E equity financing round, further complemented by a term loan of up to EUR 100 million provided by the European Investment Bank (EIB).

In addition, Sunfire has access to approx. EUR 200 million from previously approved, undrawn grant funding to support its growth, according to a news release. This makes Sunfire one of the best capitalized electrolyzer manufacturers in the industry.

Sunfire announces the successful completion of a substantial Series E financing round, raising EUR 215 million in equity capital. The new investment will further boost the company’s critical role in ramping up the hydrogen economy. Sunfire welcomes LGT Private Banking, GIC, Ahren Innovation Capital, and Carbon Equity as new investors. The transaction is subject to customary regulatory approvals and is expected to close in Q2 2024.

Sunfire-CEO Nils Aldag said, “This substantial financing round is good news for Europe’s leading role in hydrogen production and for the European clean-tech industry. I am delighted to welcome additional investors backing our vision, product offering, and capabilities to deliver industrial electrolyzers at pace and scale. With this new capital, we are uniquely positioned to further accelerate our company’s growth and industrialization plans to meet the fast-growing demand for electrolysis technologies.”

In addition to the new investors, existing shareholders have increased their investment in Sunfire – among them Lightrock, Planet First Partners, Carbon Direct Capital, the Amazon Climate Pledge Fund, and Blue Earth Capital.

In line with Sunfire’s commitment to financial diversification, the company has also secured a credit of up to EUR 100 million from the European Investment Bank (EIB), which provides increased capacity to boost its development and industrialization of solid oxide electrolyzers.

Sunfire’s pressurized alkaline and high-temperature solid oxide electrolysis technologies are a key enabler of the transition to renewable energy, offering a scalable and efficient means of producing green hydrogen. The company targets installing several gigawatts of electrolysis equipment by 2030 in large-scale green hydrogen projects, securing a leading position in the fast-growing global electrolyzer market.

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Waste-to-energy specialist executes MoU with Nikola

The partnership will encourage the adoption of Nikola Class 8 zero-emission vehicles with Klean Industries’ partners and feedstock suppliers. Nikola will evaluate offtake opportunities from the company’s green hydrogen projects.

Klean Industries, a Vancouver-based waste-to-value technology provider, has executed an MOU with Nikola Corporation to encourage the adoption of Nikola Class 8 zero-emission vehicles with Klean’s partners and feedstock suppliers.

The two companies will also work on developing green hydrogen supply and dispensing infrastructure in the US and Canada, according to a statement seen by ReSource.

Nikola will evaluate offtake opportunities from green hydrogen projects being developed by Klean and its partners involving hydroelectric, wind and solar power in the Pacific Northwest and Canada. Using Klean’s green hydrogen, the companies will convert Klean’s logistics partners’ truck fleet to Nikola Class 8 zero-emission vehicles.

Both Klean and Nikola see a significant opportunity to collaborate on projects where Klean and its partners operate recycling, resource recovery, and waste-to-energy plants, the statement reads.

“We believe Nikola’s hydrogen-electric trucks are going to fundamentally change the ground transportation and logistics landscape. This exciting collaboration will create opportunities that will reinforce the importance of working together as we look to both deploy and develop a renewable hydrogen value chain,” said Jesse Klinkhamer, CEO of Klean Industries Inc., in a statement. “Developing clean energy projects with leading technology companies such as Nikola supports Klean’s strategic focus and enables our respective companies to create a symbiosis between waste, resources, and energy, while simultaneously helping in the creation of a circular low carbon economy. Green hydrogen has the potential to completely transform the energy landscape and drive a cleaner, more sustainable future.”

Klinkhamer said in an interview last year that Klean was in the process of hiring an advisor to raise between $250m – $500m in a strategic capital raise.

Carey Mendes, president, energy at Nikola said, “Klean’s vision of utilizing a green hydrogen fleet of trucks in their tire recycling ecosystem is a clear indication of the company’s commitment to creating a better, more sustainable future. Klean has already brought together like-minded partners to decarbonize their truck fleets which is a testament to their far-reaching commitment and deep knowledge of this sustainability space.”

Klean recently partnered with City Circle Group to build a fully integrated, continuous tire pyrolysis plant to recover carbon black and biofuel in Melbourne Australia. The company also signed a partnership agreement with H2 Core Systems to distribute and build green hydrogen projects around the globe.

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DG Fuels charting path to be SAF powerhouse

The company has retained advisors and is mapping out a plan to build as many as 50 production facilities in North America for a “gigantic” sustainable aviation fuel market.

DG Fuels is charting a plan to build a proprietary network of 30 to 50 sustainable aviation fuel (SAF) production facilities in North America, CEO Michael Darcy said in an interview.

The Washington, D.C.-based company will pursue a combination of debt and equity on a case-by-case basis to fund the projects, Darcy explained, with financings underway now for the firm’s initial project in Louisiana and a second facility in Maine. The Louisiana facility recently inked a USD 4bn offtake agreement with an undisclosed investment grade industrial buyer.

The company is working with Guggenheim and Stephens as financial advisors, Darcy said. About 60 people hold equity in the company; Darcy and the founding team hold a majority stake.

In the coming months DG Fuels will likely make announcements about more SAF plants in the US and British Columbia, Darcy said. Site negotiations are underway and each project is its own subsidiary of the parent company.

“There’s clearly a good return of what we refer to as the ‘project level,’ and then we have the parent company,” Darcy said. “We have strategic investment at the parent and now we’re looking at strategic investment at the project level.”

Huge demand, low supply

DG Fuels produces SAF from cellulosic biomass feedstock, a technology that does not need sequestration of CO2 because natural gas is not used.

“We like to say it’s the corn cob, not the corn,” Darcy said. The company can also use timber waste, waxes, and renewable power as an important source of energy.

The company gets about 4.5 barrels of SAF for every ton of biomass feedstock, which is roughly three to four times the industry average, Darcy said.

“Practical scale” for a facility is 12,000 to 15,000 barrels a day, Darcy said. That’s big enough to be commercialized without stressing the electrical grid with power demand.

Despite the company’s advantages, there is “plenty of room” for other producers to come into the SAF space, Darcy said.

“Right now, the market for SAF is gigantic and the supply is minimal,” Darcy said. “Companies like us are able to pick and choose high-quality offtakers.”

DG Fuels includes Delta Airlines, Air France and General Electric as committed offtakers.

Multi-tasking

DG Fuels is “always engaged in some level of capital raise for construction of facilities and detailed engineering,” Darcy said. “There’s always more engineering to be done.”

Some of the financing has already been completed, but Darcy declined to go into additional detail. After Louisiana, the company will quickly follow up with Maine.

HydrogenPro AS recently announced that it would join Black & Veatch and Energy Vault in financing the remaining capital requirements of DG Fuels’ project in Louisiana, which is expected to be completed in mid-2022.

Most of the engineering work in Louisiana is transferable to the company’s project in Maine. Darcy likened the facilities’ build-out to a class of ships: once the first is completed, the second and third can be built almost concurrently.

“There will be a point where we won’t be building one at a time,” Darcy said.

The opportunity for funders to participate is broad in the SAF space, Darcy said. There is a crossover of good economics and ESG, so strategics, industrials, private equity and other pure financial players can all be involved.

The broad base of capital eager to participate in companies that are innovative — but not too innovative as to scare investors — is indicative of the industry’s ability to secure offtakers and feedstock.

Storing power

It’s one thing to acknowledge the need for reduction of carbon, but hard work is required ahead, Darcy said.

“The low-hanging fruit has been done,” he said of the renewables industry. “Now it’s not really about the power, it’s about the storage of power.”

DG Fuels is an offtaker of non-peak renewable power to displace fossil fuel energy. But baseload renewable power is becoming available almost anywhere.

The Maine project will use stranded hydroelectric power, Louisiana will use solar, and projects in the Midwest will use wind, Darcy said. Additionally, geothermal power is “starting to become a very real opportunity,” he added.

Deploying broadly with renewable power gets past the issues of variability of renewable power at a reasonable cost, he said.

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London-based hydrogen fund expanding in US

A UK-based investor in early-stage hydrogen companies has completely allocated its first two funds and is looking to grow its presence in the US.

AP Ventures, the London-based venture capital and private equity firm, will need new advisory relationships and offices in the US as it looks for investors and deployment opportunities there, Managing Partner Andrew Hinkly said in an interview.

The company has fully allocated its first two funds with 12 LPs, Hinkly said.

Fund 1 ($85m) is fully deployed with two of the LPs. Two realizations have come from that fund to date: the sale of United Hydrogen Group in Tennessee to Plug Power and the sale of Hyatt Hydrogen to Fortescue Future Industries.

Fund 2 ($315m) is fully allocated with 12 LPs, including the two from Fund 1. The portfolio includes 21 companies across the hydrogen value chain (ammonia for transport, liquefaction, electrolyzer production, compressor technology, etc.) at the seed, Series A and Series B stages.

“We believe we have a very differentiated set of capabilities and experiences because we are singularly focused on the hydrogen value chain,” Hinkly said.

The firm’s LPs include AngloAmerican, Equinor, Implats, Mitsubishi, Nyso Climate Investments, Pavilion Capital, Plastic Omnium, Public Investment Corporation, Sparx, Sumitomo, and Yara International.

Strategic advice need apply

In the near-term AP Ventures can offer deal flow, opportunities within portfolio companies for various professional services, and an understanding of the progression of hydrogen businesses for later-stage investors, Hinkly said.

Transactions to date have been conducted bilaterally with external legal counsel, Hinkly said. AP Ventures has yet to engage a financial advisor for that purpose.

“If you want to know about hydrogen and hydrogen deal flow, AP Ventures sees most of it,” Hinkley said. “We bring with us an ecosystem of fairly regular co-investors who are similarly interested in hydrogen.”

Co-investors include Amazon, Mitsuibishi, Chevron and Aramco.

Some of the firm’s more mature companies will take on strategic consulting services as they prepare for larger fundraising, Hinkly said.

“Clearly there are a series of advisory services that our portfolio companies require as they raise capital or subsequently look to acquire or be acquired,” he added.

Later-stage investors are keen to understand the development of AP’s portfolio, Hinkly said. Topco equity and larger-scale infrastructure investors have collaborative relationships with the firm as they prepare to acquire its portfolio companies in the future.

“We have a common interest in the continued development and maturity of the companies we’re investing in,” Hinkly said. “We have an ever-increasing roster of later-stage private equity investors who have a desire to maintain a dialog with us and to be introduced to our portfolio companies on a regular basis.”

New world opportunities

US portfolio companies could be in greater need of strategic advisory services in the near term than some of AP’s European holdings, Hinkly said.

The firm is looking to establish offices in the US with an eye on Denver and Houston, Hinkly said.

Greater support for hydrogen in the US under the IRA means European companies within AP Ventures’ portfolio are also looking to establish themselves in the US.

In terms of a target market, AP Ventures is particularly interested in Texas, which Hinkly said he expects will be the hydrogen capital of the world. Existing infrastructure, human capital and enormous wind and solar resources pair well with a willingness to build out the industry there, he said.

AP will continue investing in the full hydrogen value chain as it has been for years, identifying weak spots in the chain to strengthen the industry, Hinkly said. But moving forward, the firm would like to invest in carbon capture utilization and storage as well.

Scaling up with the industry

As the hydrogen industry grows and its portfolio companies scale, there is significant opportunity for AP Ventures to grow and provide more financing, Hinkly said.

“There is a huge requirement for capital and we are knowledgeable, very knowledgeable, of where good opportunities exist,” he said.

The nature of the firm’s early contracts gives them preferential access to those opportunities in some cases as well. Whether that would be best done directly with a new fund or partnership with a firm with complementary skills is an open question.

“That strategic question is one that’s frankly ahead of us this year.”

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