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United Airlines SAF fund hits $200m in commitments

The fund has also added eight new corporate partners following a February launch.

The United Airlines Ventures Sustainable Flight Fund has increased its investment commitments to nearly $200 million and added eight new corporate partners, five months after its initial launch, according to a news release.

American Express Global Business Travel, Aramco Ventures, Aviation Capital Group, Bank of America, Boston Consulting Group, Groupe ADP, Hawaiian Airlines and JetBlue Ventures, will join inaugural fund partners Air Canada, Boeing, GE Aerospace, JPMorgan Chase, and Honeywell.

United customers also have the option to contribute to supplement the airline’s investment in the UAV Sustainable Flight FundSM when they book flights. Since the fund launched, more than 60,000 United customers have contributed a total of more than $200,000.

United will continue to recruit corporations across industries to join the fund and will prioritize investment in new technology, advanced fuel sources, and proven producers – all in an effort to help scale the supply of SAF. Partners also have the potential to gain preferential access to environmental attributes associated with United’s future supply of SAF.

SAF, which currently must be blended with conventional jet fuel to meet regulatory requirements for use within the aircraft, is being made from used cooking oil and agricultural waste, and, in the future, could be made from other feedstocks including household trash or forest waste. Through the UAV Sustainable Flight Fund, United intends to invest in a variety of SAF feedstocks and technologies. With the right policy incentives to produce SAF, United’s efforts could help build a future of sustainable flight.

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H2 Green Steel evaluating North American projects

Sweden’s H2 Green Steel is evaluating projects in North America in partnership with Vale.

Swedish green steel start-up H2 Green Steel is considering projects in North America through a joint feasibility study with Vale that would enable sustainable steel production.

The company said it would explore the potential to produce low-carbon steel value chain products like green hydrogen and hot briquetted iron in industrial centers in North America as well as Brazil.

H2 Green Steel yesterday closed on a €1.5bn equity private placement co-led by new investor Hy24, together with existing investors Altor, GIC and Just Climate. The transaction also includes new investors Andra AP - fonden and Temasek as well as a group of existing investors that continue to support H2 Green Steel with additional equity funding, including AMF, Cristina Stenbeck, Hitachi Energy, IMAS Foundation, Kinnevik, Schaeffler, Vargas and Wallenberg Investments holding company FAM.

The proceeds of that transaction will finance the construction and development of H2 Green Steel’s flagship large-scale green steel plant in Boden, Sweden. Groundworks have been ongoing on the site in Boden since summer 2022, and through this transaction H2 Green Steel takes another big leap towards start of operations end of 2025.

The plant will deliver steel with up to 95 percent less CO2 emissions compared to steel produced with traditional blast furnace technology. This is made possible by replacing coal in the production process with hydrogen, produced on-site with Europe’s largest electrolyzer, using electricity from renewable sources.

Since launch in 2021, H2 Green Steel has raised more than €1.8 billion of equity in three financing rounds. The company closed its series A equity round of €86 million in May 2021 and announced the close of its series B1 round of €260mn October 2022. On the debt side, H2 Green Steel announced in 2022 the structure for its debt financing of over €3.5 billion and renewed commitment letters in July 2023.

Morgan Stanley & Co. International plc acted as sole financial advisor to H2 Green Steel in the private placement.

In the green industrial hubs, Vale is expected to build and operate briquette plants, which will feed direct reduction reactors for the production of HBI and other metallics. The number of industrial hubs that will be built, their location and production capacity will be defined following feasibility studies to be developed jointly by the two companies.

In July, Vale and H2 Green Steel also signed an agreement to supply direct reduction pellets to the Boden plant. Vale expects to reach a production capacity of 100 million tons of agglomerates (briquettes and pellets) after 2030.

“We announced early on our journey that we want to explore other geographies where we can accelerate the decarbonization of the steel value chain. Both Brazil and parts of North America have great potential due to the access to both renewable energy sources, high quality iron ore, and political willingness to support decarbonization projects and it’s a great opportunity for us to explore our partnership with Vale beyond the pellet supply to our flagship plant in Boden,” said Kajsa Ryttberg-Wallgren, EVP growth and hydrogen business of H2 Green Steel, in a news release.

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European Commission clarifies some RFNBO rules

In a new Q&A document, the European Commission has clarified several provisions related to the qualification of renewable fuels, including the use of intermediaries in PPAs, the definition of a bidding zone, and the emissions intensity of synthetic fuels.

An updated Q&A document from the European Commission clarifies several provisions related to the qualification of renewable fuels of non-biological origin (RFNBO) and recycled carbon fuels, in answer to questions raised by fuel producers and certifiers following the adoption of the EU’s delegated acts.

The implementation document released yesterday adds language regarding the use of intermediaries in PPAs, allowing for such parties to represent electricity producers in the delivery of electricity for fuel production. A previous version of the document had left open the possibility that fuels producers would have to contract directly with the electricity producers in order to comply with the RFNBO standards, a particularly burdensome concept where utilities have mandated grid ownership.

“Intermediaries referred to in the RFNBO delegated act may be involved by various means and for various purposes, including as a contracting party,” the document reads. “For example, intermediaries can represent the electricity producers, but it is important that a direct relationship between the electricity producer and the hydrogen producer is maintained.”

The document adds that guarantees of origins (GOs) must be compliant with rules set out elsewhere in the Q&A document as well as in the RFNBO delegated act and Article 19 of RED. 

“The GOs for the PPA need to […] carry the same attributes as the physical installation producing the electricity. This includes e.g. the location of the installation, the age of the installation, and the time of the production.”

The new Q&A document also clarifies the definition of a ‘bidding zone’ for purposes of regional compliance, a concept that could result in a narrower definition than the balancing authority regions defined under US rules, due to nodal and zonal power pricing structures in the US system.

“Certifiers should assess whether at the location of the electrolyser, market regulations applied are similar to the rules set out for bidding zones in Regulation (EU) 2019/943,” the Q&A document reads. “In this context ‘similar’ means that there are rules requiring establishing hourly prices for electricity in a geographical area. If such rules are in place, the geographical area for which the prices are established should be considered as a bidding zone for the purpose of the implementation of the methodology.”

If geographical pricing rules are not in place, the document continues, “certifiers should assess whether the electricity network in the country of production is integrated or whether there are several separated networks. If there are several networks, each network should be considered as a bidding zone for the purpose of the implementation of the methodology.”

Meanwhile, “if the electricity network of the country is integrated and there are no geographically differentiated electricity prices, the whole country may be considered as one bidding zone for the purpose of the implementation of the RFNBO delegated act.”

Furthermore, the document includes an annex on the carbon intensity measurement for use of co-processing to produce synthetic fuels:The GHG methodology sets out a specific rule for calculating the emission intensity of RFNBOs stemming from a process where co-processing is applied. It allows to distinguish in the calculation of the greenhouse gas emissions intensity on a proportional basis of the energetic value of inputs between: (1) the part of the process that is based on the conventional input and (2) the part of the process that is based on renewable fuels of non-biological origin and recycled carbon fuels assuming that the process parts are otherwise identical. 

If for instance a process uses H2, CO, CO2 as well as other energy inputs to produce synthetic fuels and the producer intends to replace 20% of the H2 with H2 qualifying as RFNBO, it would be possible to determine the emission intensity of the produced synthetic fuels assuming a virtual process which uses only 20% of all inputs mentioned above (20% of each input). In this example, all hydrogen qualifying as RFNBO (which is 20% of the total H2 input) would be used in the virtual process, and the other 80% of the hydrogen (all non-RFNBO) would be used in the other process which uses 80% of all inputs. Such process would also yield only 20% of the output, but only the energy share of RFNBO hydrogen in the input would be considered an RFNBO. It would be possible to replace in this virtual process more than one input. Not only RFNBOs but also RCF, biomass, renewable electricity, renewable heat and CO2 (including biogenic) could be used for this purpose. While the use of RCF and biomass would not add to the share of RFNBOs in the output, they could reduce the emission intensity of the output as the entire output of the virtual process would have the same emission intensity. “

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GHI assessing ABB technology for Hydrogen City

GHI has signed an MoU to assess ABB’s automation and electrification technology for deployment at the South Texas Hydrogen City green hydrogen project.

ABB is collaborating with Green Hydrogen International (GHI) on a project to develop a major green hydrogen facility in south Texas, United States.

As part of the Memorandum of Understanding ABB’s automation, electrification and digital technology will be assessed for deployment at GHI’s Hydrogen City project, according to a news release.

The Power-to-X facility will use solar and onshore wind energy to power a 2.2 GW electrolyzer plant to produce 280,000 tons of green hydrogen per year, which will be turned into one million tons of green ammonia annually.

ABB has already completed a feasibility study to develop an electrical system architecture that optimizes return on investment for the project and supports compliance with EU legislation governing Renewable Fuels of Non-Biological Origin (RFNBO)2 and the US Inflation Reduction Act (IRA). ABB plans to supply its Integrated Control Safety System with the distributed control system ABB Ability™ System 800xA® to improve efficiency, operator performance and asset utilization.

MoU scope also includes electrical motors and drives, measurement and analytics solutions, and power and process optimization solutions.

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California biomass-to-hydrogen firm in Series A

A woody biomass-to-hydrogen firm in California is conducting an in-house Series A for engineering and design on its first project, one that will need more than $800m of debt and equity in the future.

Mote Inc. is aiming to finish a Series A round, raising between $12m and $15m, by the end of the year, CEO Joshuah Stolaroff said in an interview.

The company does not have a relationship with a financial advisor and has been conducting the raise in-house, he said. Moving forward the company will need a financial advisor.

The Series A will provide some 18 months of technology development runway, plus engineering and design on the first project in Bakersfield, Kern County. That will require some $800m in debt and project equity to start in the next year.

A second project in Sacramento is in the pre-Feed stage. That development is the subject of a recently secured grant from the Sacramento Municipal Utility District.

“We need big partners to do it on any meaningful scale,” Stolaroff said of biomass-to-hydrogen. Investors tend to be technology VCs with little or no knowledge of project finance, and infra funds looking for no-risk projects. “We fall somewhere in between.”

Part of the Arches H2 hub in California, Mote has ambitions to expand to other areas of the US with good biomass supply and CO2 storage, like the southeast and Gulf Coast, Stolaroff said. The company would also like to expand internationally.

“We are a great deal right now,” he said of the Series A,” adding that a Series B or project equity round will follow shortly.

Majority equity is held by the company’s six employees, Stolaroff said. There are also seed investors that hold equity.

Abundant feedstock and a growing offtake market

Mote’s three primary feedstocks are agricultural and forestry reside and urban green waste. California produces some 45m tons of it per year and the number nationwide is about half-a-billion, Stolaroff said.

Mote is confident for demand from hydrogen customers, Stoaroff said. Transportation is expected to be a strong demand source by the time Mote is operational. The Arches hub also has connections with municipal users, filling stations and the ports of LA and Long Beach.

“We are all planning for growth,” he said.

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Exclusive: E-fuels developer raising $500m

A developer of green hydrogen for e-fuel products is looking for a more diverse set of backers for a recently launched Series C capital raise.

Ineratec, the German power-to-liquid fuels developer and technology provider, has launched a $500m Series C and could take on a US-based financial advisor to help, CEO Tim Boeltken said in an interview.

German boutique Pava Partners helped Ineratec on its $129m Series B, which was led by Piva Capital. The Series B raise, which was announced in January, also included participation from HG Ventures, TDK Ventures, Copec WIND Ventures, RockCreek, Emerald, Samsung Ventures as well as the increased support from current investors, including global corporates like ENGIE New Ventures, Safran Corporate Ventures and Honda.

The Series C can include equity, debt and project finance, Boeltken said.

The company, which takes a modular approach to fuels production, serves customers in Switzerland, Spain and Finland. Its e-fuels process involves two main steps: first, turning CO2 and hydrogen into synthesis gas, then using a second reactor to turn the synthesis gas into liquid and solid hydrocarbons, according to its website.

Growth in the US would include eventual rollout of its 100 MW commercial unit, none of which have been built to date. Now the company is focused on its 10 MW commercial units, following completion of a 1 MW industrial plant operating now.

In the next month Ineratec will be scouting locations in the US, Boeltken said, adding the the company is “hoping for many, many US installations” with eyes on additional applications in South America and Japan. The company also intends to establish a US headquarters.

Sites in New York and California are of first interest but there are also growth intentions in Texas, Washington state and Appalachia.

Ineratec is currently raising project finance for a “triple-digit” million capex project in the Europe, he said.

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Exclusive: New sustainability hedge fund to raise up to $2bn

A new hedge fund founded by a clean fuels industry veteran is gathering partners to raise up to $2bn initially for deployment into ammonia and other climate-transition technologies.

New Waters Capital, an emerging hedge fund based in New York City, is gathering its primary partners for its first fundraise of between $1bn and $2bn, founder Bill Brown said in an interview.

Brown formerly spent 15 years at North Carolina-based 8 Rivers Capital, which recently announced an ammonia project in Texas. Brown, a co-founder, sold his shares to South Korea’s SK, Inc. in that company’s majority takeover of 8 Rivers last year.

Brown recently created New Waters as a multi-strategy fund manager to invest in publicly traded companies in sustainability, AI, and clean fuels.

“The molecule-based economy is really important, and there’s some companies that have been in the molecule-based economy that are not really sure what they’re doing,” Brown said.

This creates an environment ripe for disruption, he said.

The firm is in the process of selecting its prime brokers, which will help determine the size of New Waters’ fundraises, Brown said. The first raise will be conducted in the next six months, and likely not be larger than $2bn to start.

New Waters’ law firm is Seward & Kissel.
The Wild West of molecules

Of all hydrogen produced in the US, about 65% is used for fertilizer production, Brown said. In Japan, where hydrogen is being co-fired with coal, replacing all coal-fired generation with ammonia would require 10 times the current ammonia production of the US.

“The market for molecules is so big, and yet the largest producer in the US of ammonia is CF Industries.” That company has one plant in Louisiana that represents roughly one third of total US ammonia production. “So CF is tiny compared to the opportunities out there.”

Brown said he is looking for the companies that are going to be the Valero and Phillips 66 of ammonia refining. He believes 8 Rivers is on track for something like that.

“We look at companies like that,” he said. “I think that entire market is up for grabs right now; it’s a whole new market.”

 Companies that can seize that market are the companies that are going to be part of the energy system of the future.

“In many respects right now, we’re in the Wild West, if you will, of the molecules of the future,” Brown said.

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