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US-based electrolyzer makers take in DOE funding haul

Electrolyzer manufacturers Nel ASA, thyssenkrupp nucera, and Electric Hydrogen are among the biggest recipients of funding from the Department of Energy’s $750m funding disbursement for 52 projects across 24 states to reduce the cost of clean hydrogen.

Additional electrolyzer makers Plug Power, Verdagy, OxEon, NexTech Materials, and Cummins were also selected to receive funding. 

Learn more about the projects selected for award negotiations here

The projects are expected to enable U.S. manufacturing capacity to produce 14 gigawatts of fuel cells per year, enough to power 15% of medium- and heavy-duty trucks sold each year, and 10 gigawatts of electrolyzers per year, enough to produce an additional 1.3 million tons of clean hydrogen per year, according to a news release

Managed by DOE’s Hydrogen and Fuel Cell Technologies Office (HFTO), these projects represent the first phase of implementation of two provisions of the Bipartisan Infrastructure Law, which authorizes $1 billion for research, development, demonstration, and deployment (RDD&D) activities to reduce the cost of clean hydrogen produced via electrolysis and $500 million for research, development, and demonstration (RD&D) of improved processes and technologies for manufacturing and recycling clean hydrogen systems and materials.  

Selected projects will advance clean hydrogen technologies in the following areas:    

  • Low-Cost, High-Throughput Electrolyzer Manufacturing (8 projects, $316 million): Selected projects will conduct RD&D to enable greater economies of scale through manufacturing innovations, including automated manufacturing processes; design for processability and scale-up; quality control methods to maintain electrolyzer performance and durability; reduced critical mineral loadings; and design for end-of-life recovery and recyclability.   
  • Electrolyzer Component and Supply Chain Development (10 projects, $81 million): Selected projects will support the U.S. supply chain manufacturing and development needs of key electrolyzer components, including catalysts, membranes, and porous transport layers.    
  • Advanced Technology and Component Development (18 projects, $72 million): Selected projects will demonstrate novel materials, components, and designs for electrolyzers that meet performance, lifetime, and cost metrics—to enable cost reductions and mitigate supply chain risks. Longer-term cost reductions enabled by these cutting-edge projects are likely to play a significant role in achieving DOE’s Hydrogen Shot goal.  
  • Advanced Manufacturing of Fuel Cell Assemblies and Stacks (5 projects, $150 million): Selected projects will support high-throughput manufacturing of low-cost fuel cells in the United States by conducting RD&D that will enable diverse fuel cell manufacturer and supplier teams to flexibly address their greatest scale-up challenges and achieve economies of scale.  
  • Fuel Cell Supply Chain Development (10 projects, $82 million): Selected projects will conduct R&D to address critical deficiencies in the domestic supply chain for fuel cell materials and components and develop advanced technologies that reduce or eliminate the need for per- and polyfluoroalkyl substances (PFAS), often referred to as “forever chemicals.”  
  • Recovery and Recycling Consortium (1 project, $50 million): This funding establishes a consortium of industry, academia, and national labs to develop innovative and practical approaches to enable the recovery, recycling, and reuse of clean hydrogen materials and components. It will establish a blueprint across the industry for recycling, securing long-term supply chain security and environmental sustainability.   

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Cummins buys remaining 19% of Hydrogenics Corp.

Cummins is now the sole owner of the Ontario-based fuel cell and electrolyzer technologies company.

Cummins Inc. has bought out Air Liquide’s 19% interest in Hydrogenics Corporation, according to a news release.

Cummins acquired the Ontario-based Hydrogenics in 2019, adding key fuel cell and electrolyzer technologies to its portfolio. That acquisition was completed for $15 per share, representing an enterprise value of approximately $290m.

“The buyout reinforces [Cummins’] commitment to these technologies and the increasing importance they will play in creating value for all stakeholders and decarbonizing our world,” the release states. “This move enables continued investment and growth in hydrogen technologies to meet rapidly growing demand.”

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EU Commission members to provide €5.2bn for hydrogen

The public funding is expected to unlock an additional €7 billion in private investments.

The European Commission member states have approved a plan to provide up to €5.2bn in public funding to support research and innovation, first industrial deployment and construction of relevant infrastructure in the hydrogen value chain.

The project, called “IPCEI Hy2Use” was jointly prepared and notified by thirteen Member States: Austria, Belgium, Denmark, Finland, France, Greece, Italy, Netherlands, Poland, Portugal, Slovakia, Spain and Sweden.

The public funding is expected to unlock an additional €7bn in private investments. As part of this IPCEI, 29 companies with activities in one or more member states, including small and medium-sized enterprises and start-ups, will participate in 35 projects.

According to an official news release, IPCEI Hy2Use will cover a wide part of the hydrogen value chain by supporting (i) the construction of hydrogen-related infrastructure, notably large-scale electrolysers and transport infrastructure, for the production, storage and transport of renewable and low-carbon hydrogen; and (ii) the development of innovative and more sustainable technologies for the integration of hydrogen into the industrial processes of multiple sectors, especially those that are more challenging to decarbonise, such as steel, cement and glass. The IPCEI is expected to boost the supply of renewable and low-carbon hydrogen, thereby reducing dependency on the supply of natural gas.

Several projects are expected to be implemented in the near future, with various large-scale electrolysers expected to be operational by 2024-2026 and many of the innovative technologies deployed by 2026-2027. The completion of the overall project is planned for 2036, with timelines varying in function of the project and the companies involved.

Norway, as part of the European Economic Area, also participates to the IPCEI ‘Hy2Use’ with two individual projects. The EFTA Surveillance Authority is in charge of assessing State aid notified by Norway.

IPCEI Hy2Use follows and complements the first IPCEI on the hydrogen value chain, the IPCEI “Hy2Tech”, which the Commission approved on 15 July 2022. While both IPCEIs address the hydrogen value chain, Hy2Use focuses on projects that are not covered by Hy2Tech, namely hydrogen-related infrastructure and hydrogen applications in the industrial sector (while Hy2Tech focuses on end-users in the mobility sector).

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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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Methanol-to-hydrogen firm planning capital raise

An early-stage provider of distributed methanol-to-hydrogen solutions is planning a capital raise as it scales up.

Kaizen Clean Energy, a Houston-based methanol-to-hydrogen fuel company, is planning to raise additional capital in support of upcoming projects.

The company, which uses methanol and water to produce hydrogen with modular units, recently completed a funding round led by Balcor Companies, in which Balcor took a minority interest in Kaizen.

Additional funding in the capital raise was provided by friends and family, Kaizen co-founder and chief commercial officer Eric Smith said in an interview.

But with its sights on larger project opportunities this year, the company is already targeting an additional capital raise to support continued growth, Smith said. He declined to comment further on the capital raise and potential advisors, but noted that the company’s CFO, Craig Klaasmeyer, is a former Credit Suisse banker.

Kaizen’s methanol model utilizes a generator license from Element 1 and adds in systems to produce power or hydrogen, targeting the diesel generator market, EV charging and microgrids as well as hydrogen fueling and industrial uses.

Compared to trucking in hydrogen, the model using methanol, an abundant chemical, cuts costs by around 50%, Smith said, noting that Kaizen’s containers are at cost parity with diesel.

In addition, the Kaizen container is cleaner than alternatives, producing no nitric or sulfur oxide, according to Smith. Its carbon intensity score is 45, compared to 90 for the California electric grid and 100 for diesel generators.

Smith also touts a streamlined permitting process for Kaizen’s containerized product. The company recently received a letter of exemption for the container from a California air district due to low or no emissions. The product similarly does not require a California state permit and similarly, when off grid, no city permits are required, he added.

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Exclusive: Verde Clean Fuels seeking project finance for gas refineries

Publicly listed Verde Clean Fuels plans to seek equity and debt investors for low-carbon gasoline refineries it expects to deploy across the US. We spoke to CEO Ernest Miller about the strategy.

Verde Clean Fuels, a publicly listed developer of clean fuels technology and projects, is planning to seek project debt and equity investors to finance a series of low-carbon gasoline refineries it expects to deploy across the US.

Houston-based Verde, which employs syngas-to-gasoline refining technology, recently announced an agreement with Diamondback Energy to construct a facility in the Permian Basin that will utilize stranded natural gas to produce 3,000 barrels per day of gasoline.

The company is also pursuing a carbon-negative gasoline project on the premises of California Resources’ Net Zero Industrial Park in Bakersfield, California. The California project will produce approximately 500 barrels of RBOB renewable gasoline per day from agricultural waste, while capturing and sequestering around 125,000 tons of CO2 per year.

Verde is capitalized following a private investment in public equity (PIPE) injection of $54m as part of a reverse merger last year, allowing the company to take the Bakersfield and West Texas projects through the FEED phase, CEO Ernest Miller said in an interview.

Underpinning Verde’s business model is the view that gasoline will persist as a transportation fuel for many years to come, and that very few parties are working to decarbonize the gasoline supply chain.

“Between renewable diesel, renewable natural gas, and sustainable aviation fuel, there is very little awareness that renewable gasoline is even a thing,” Miller said. “The addressable market is enormous, and the impact that can be made by taking even a sliver of that market is enormous.”

Miller says that many market participants believe that electric vehicles will solve the emissions problem from road transport.

“The fact is that gasoline has a very, very long runway ahead of it,” he said. “Regardless of the assumptions you want to make about EV penetration, the volume of gasoline that we continue to use for the foreseeable future is huge.”

Verde Clean Fuels demo plant.

Verde’s projects are sized in the 500 – 3,000 barrels per day range, making them a unique player at the smaller end of the production range. The only other companies with similar methanol-to-gas technology are ExxonMobil and Danish-based Topsoe, which operate at a much larger scale, according to Miller.

Miller recognizes that low-carbon, or negative-carbon, gasoline operates within a complex ecosystem, with the California project potentially playing in that state’s LCFS and D3 RIN markets, in addition to the market for gasoline.

“What I would like to see us do is have an offtaker that plays in all three of those products – so if I can go to Shell Trading, or bp, or Vitol, and get one of them to say, ‘here’s a price,’ and they take all of that exposure and optionality,” Miller said, “that allows me to finance the project without having to manage a whole bunch of different commodity exposures and risk.”

Bakersfield 

The Bakersfield project, estimated to cost $235m to build, will utilize 450 tons per day of agricultural waste to produce gasoline, and sequester CO2 via California Resources’ carbon management company, Carbon TerraVault, a joint venture with Brookfield Renewable.

Because of the carbon sequestration, the project will qualify for incentives under 45Q, but since it is producing, in Miller’s words, “deeply carbon-negative gasoline,” most of the value for the project will come from California’s LCFS program.

In order to qualify for LCFS credits, the Bakersfield facility goes through the full GREET modeling process – including transport of feedstock, processing and refining, and transport away from the facility – returning a negative 125 grams equivalent per MJ carbon intensity score for the project, according to Miller.

As for investors, Verde “would like to see both California Resources and Brookfield Renewable in the project, either individually or through the Carbon TerraVault JV,” Miller said.

Verde is also in discussions with a handful of financial players, including infrastructure and pension funds that are looking for bond-like cash flow that a project finance model can provide. The company has also explored the municipal bond market in California, which would bring to bear a favorable capital structure for the project, Miller said.

Verde is not currently working with a project finance advisor, Miller said, noting that they have in-house project finance experience. In Texas, Verde is working with Vinson & Elkins as its law firm; and in California Verde is working with Orrick as counsel.

Gasoline runway

For the Diamondback facility in West Texas, which requires roughly $325m of capex, both Verde and Diamondback will take equity stakes in the project, and Verde will seek to bring in debt financing to fund the rest of the project costs in a non-recourse project finance deal, Miller said.

The Permian project seeks to provide a pathway to monetize stranded gas in the basin by taking advantage of and alleviating its lack of takeaway capacity, which causes gas prices at the Waha Hub in West Texas to trade at a significant discount to the Henry Hub price.

“Diamondback would take the position that any gas that’s getting consumed in the Permian Basin is gas that’s not getting flared in the Permian Basin,” Miller said, thus making the project a emissions-mitigating option. “There will never be enough natural gas takeaway capacity out of the Permian Basin,” he added, noting that driller profiles are only going to get gassier as time goes on.

Diamondback, for example, produces more in the Permian than it can take out via pipeline, therefore “finding a use, a different exposure, for that gas by turning it into gasoline, is of value for them,” Miller said.

“It’s the same dynamic in the Marcellus and Bakken and Uinta – all the pipeline-constrained basins,” he added, alluding to possible future expansion to those basins.

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Exclusive: Methanol electrolyzer start-up gearing up for seed capital raise

An early-stage technology company seeking to commercialize an electrolyzer that produces methanol from CO2 at ambient temperature and pressure is preparing its first capital raise.

Oxylus Energy, a methanol technology and project development start-up, is preparing to kick off its first capital raise later this month.

The Yale-based firm is seeking to raise $4m in seed funding, with proceeds funding the advancement of a production-scale CO2-to-methanol electrolyzer cell and its first commercial agreements for offtake, CEO Perry Bakas said in an interview.

Oxylus aims to commercialize an electrolyzer that creates methanol from CO2 at room temperature and pressure, and also plans to develop and operate its own methanol production plants, he said.

The technology, which will scale to larger versions in coming years, recently hit a key milestone with the validation of a 5cm2 platform.

The seed capital raise would provide approximately 26 months of runway, according to Bakas. The company would then raise between $20 – $30m in a follow-on Series A in late 2026.

“What we’re gonna do with the Series A is put that first electrolyzer into the ground,” he said. “It’ll be our first revenue-producing methanol.”

Oxylus is currently owned by Bakas and his fellow co-founders. The company has been entirely grant funded to this point. DLA Piper is advising as the law firm on the seed capital raise.

“I think the most important thing about the technology is it’s the most energy-efficient pathway to making renewable methanol,” he said. “At the right energy prices, you’re below cost parity with fossil-derived methanol. When that happens, I think it’ll become a very interesting development scenario.”

Oxylus is focused on bringing the so-called green premium down to zero, Bakas said, noting that it requires achieving scale in electrolyzer production or partnering with established electrolyzer manufacturers.

Methanol for shipping

Oxylus will seek to introduce its technology into target markets that are already using methanol as a feedstock, like high-value petrochemicals. In the longer term, shipping and aviation are likely to become attractive markets. Taken together, the company believes methanol has the potential to decarbonize 11% of global emissions.

Methanol will compete with ammonia for primacy as a shipping fuel in the future, but Bakas believes methanol is the better option.

“These are massive markets – they need a lot of solutions, and quickly,” he said. “But ammonia is not energy dense, and it doesn’t integrate with existing infrastructure.”

The International Energy Agency recently projected that while ammonia will be cheaper to make, methanol is easier to handle, resulting in roughly similar cost profiles for e-methanol and green ammonia. The added cost for methanol production, the report found, is likely to come from a scarcity of biogenic CO2.

On that topic, Bakas acknowledged that the methanol pathway still requires combustion of carbon, but emphasized his technology’s ability to displace existing fossil fuel-based methanol production.

“The distinction we need to make is: are these virgin hydrocarbons or are they recycled hydrocarbons? If you’re just continuously pumping new CO2 out of the ground into the atmosphere, you’re gonna continue to cause climate change,” he said.

“The technologies that we are building in this suite of technologies that cover direct air capture, point source capture, carbon conversion, that whole CCUS world,” he added, “are really working to monitor and create a homeostasis in the atmospheric balance of CO2.”

Oxylus recently completed a lifecycle assessment of greenhouse gas emissions, Bakas said, finding that its fuels are expected to reduce CO2 emissions by 95% at optimal voltage compared to natural gas steam methane reforming.

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