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US SAF developer receives investment from Air France-KLM

The airline group has made a development capital investment that will support an FID on a Louisiana sustainable aviation fuel plant.

Air France-KLM has invested $4.7m into SAF developer DG Fuels, according to a news release.

This investment – a first for Air France-KLM – will support the completion of the development work necessary to reach the final investment decision (FID) on DG Fuels’ first sustainable aviation fuel plant, which will be located in Louisiana. The investment confirms the Air France’s ambition to participate in the financing of project studies that enable the development of SAF production capabilities worldwide, with the aim of gradually establishing a diversified network able to meet worldwide demand.

In addition to this investment, Air France-KLM has acquired a new option to purchase up to 75,000 tons of SAF per year from DG Fuels (45,000 tons in Maine; 30,000 tons in Louisiana). 45,000 incremental offtake relates to future SAF that will be produced by DG Fuels’ second U.S. production facility (expected to be located in Maine), with deliveries planned to start as early as 2029.

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Hydrogen Council appoints Ivana Jemelkova as CEO

Jemelkova, formerly of FTI Consulting, will officially assume her new role as of June 3.

The Hydrogen Council, a global CEO-led initiative comprising the world’s leading businesses and investors in hydrogen, today announced the appointment of Ivana Jemelkova as its Chief Executive Officer, following an extensive, international search.

Ivana Jemelkova is a recognized leader in energy and sustainability, with a track record of building and managing successful coalitions and partnerships to accelerate decarbonization, the council said in a news release. Having most recently served as a senior managing director at a global business advisory firm, her professional experience spans industry, government, and nonprofits. Jemelkova has worked on hydrogen for nearly 15 years, including as an advisor to the Hydrogen Council, which she helped build in 2017. A Czech national, she has lived in Brussels and Washington, DC and worked with diverse teams and organizations worldwide.

Sanjiv Lamba, CEO of Linde plc and Hydrogen Council Co-Chair, said: “We are delighted to welcome Ivana as the CEO of the Hydrogen Council and work closely together as she leads the organization through its next chapter focused on unlocking demand for clean hydrogen and creating a framework for global trade and accelerated investment. This is a crucial and exciting time for hydrogen and we are confident that Ivana’s strategic vision, innovative thinking, and deep understanding of the energy landscape will significantly advance our mission.”

Jemelkova will succeed Daryl Wilson, who stepped down as Executive Director of the Hydrogen Council in September 2023 due to health reasons. During the nine-month transition period, Steven Libbrecht, Director Operations & PMO, acted as Interim Executive Director while Daria Nochevnik, Director Policy & Partnerships, took on additional external representation duties. Jemelkova will officially assume her new role as of June 3, 2024.

Yoshinori Kanehana, Chairman of the Board, Kawasaki Heavy Industries, Ltd. and Hydrogen Council Co-Chair, said: “We could not be more pleased with the choice of Ivana as the Council’s new leader. Her proven ability to build high-performing teams, foster trusted partnerships and deliver tangible impact make her the perfect fit for this key role. We are grateful to Daryl and the whole Council team for their continued dedication to the Council’s success and support throughout the transition process, and look forward to further building on this strong foundation.”

Ivana Jemelkova, CEO of the Hydrogen Council, said: “The Hydrogen Council has a unique ability to bring together business, policy, finance and civil society leaders to make real progress on climate. I am honoured by the trust the Council has placed in me and excited to lead the organization and work closely with its members, staff and partners towards a sustainable future.”

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Biden admin grants $4bn tax credits for 100 energy projects

The administration allocated $2.7bn in tax credits to clean energy manufacturing and recycling; $800m to critical materials recycling, processing, and refining; and $500m to industrial decarbonization.

The U.S. Department of Energy (DOE), the U.S. Department of Treasury, and the Internal Revenue Service (IRS) today announced $4 billion in tax credits for over 100 projects across 35 states to accelerate domestic clean energy manufacturing and reduce greenhouse gas emissions at industrial facilities.

Projects selected for tax credits under the Qualifying Advanced Energy Project Tax Credit (48C), funded by President Biden’s Inflation Reduction Act, span across large, medium, and small businesses and state and local governments, all of which must meet prevailing wage and apprenticeship requirements to receive a 30% investment tax credit. Of the $4 billion tax credits, $1.5 billion supports projects in historic energy communities.

The agencies did not release a full list of the projects awarded tax credits, citing prohibitions in the law. But a news release gave this overview:

Clean energy manufacturing and recycling: $2.7 billion in tax credits (67% of round 1 tax credits)

  • Selected from applications requesting support for the buildout of U.S. manufacturing capabilities critical for clean energy deployment and span clean hydrogen (e.g., electrolyzers, fuel cells, and subcomponents), grid (e.g., cables, conductors, transformers, and energy storage), electric vehicles (e.g., battery components, power electronics), nuclear power, solar PV, and wind energy (including offshore wind components), among other industries and components critical to supporting secure and resilient domestic clean energy supply chains.

Critical materials recycling, processing, and refining: $800 million in tax credits (20% of round 1 tax credits)

  • Selected projects are investing in multiple electrical steel applications, lithium-ion battery recycling, and rare earth projects, all critical areas for maintaining a secure, reliable energy system and advancing the clean energy transition.

Industrial decarbonization: $500 million in tax credits (13% of round 1 tax credits)

  • Selected projects would implement decarbonization measures across diverse sectors, including chemicals, food and beverage, pulp and paper, biofuels, glass, ceramics, iron and steel, automotive manufacturing, and building materials. Low-carbon fuels, feedstocks, and energy sources are well-represented as a solution for decarbonization across these projects.
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OCI Global supplying low-carbon ammonia for German fertilizer

OCI will supply COMPO EXPERT with ammonia that guarantees a 60% lower carbon footprint than the industry standard from its facilities in Texas.

OCI Global, a producer of nitrogen, methanol, and hydrogen products is supplying COMPO EXPERT, a producer of high-quality specialty fertilizers and biostimulants, with lower carbon ammonia for use in the production of COMPO EXPERT’s NPK fertilizers, with the first delivery having taken place this week, according to a news release.

COMPO EXPERT will initially replace 25% of the ammonia it uses at its facility in Krefeld, Germany, with OCI’s lower carbon product this year and has plans in place to further increase the ratio of OCI supplied lower carbon ammonia in its production over the next two years.

OCI will supply COMPO EXPERT with ammonia that guarantees a 60% lower carbon footprint 60% than the industry standard from its facilities in Texas, USA via OCI’s proprietary ammonia terminal and distribution hub at the Port Of Rotterdam.

OCI has supplied COMPO EXPERT with ammonia for fertilizer production for over a decade and the switch to lower carbon ammonia is testament to both companies’ commitment to sustainability and the decarbonization of their products.

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Exclusive: Modular green ammonia firm launches capital raise

A modular green ammonia firm has hired a boutique investment bank and has launched a roughly $150m capital raise.

Talus Renewables, a developer of modular green ammonia projects, has hired a boutique investment bank and has launched a capital raise.

The company has hired GLC Advisors as sellside advisor, according to sources familiar with the matter, and launched the capital raise this month, which seeks to raise $50m of equity and an additional $100m of financing.

CEO Hiro Iwanaga told ReSource last year that the company was gearing up for a Series B capital raise, including initiating talks with potential advisors.

Talus offers containerized systems that produce green ammonia from power, water, and air, in the form of the TalusOne (up to 1.4 tonnes of green ammonia daily) and talusTen (up to 20 tonnes per day).

The company delivered its first system to Kenya Nut Company, a multinational agricultural firm in east Africa, under a 15-year fixed-price ammonia offtake agreement, Iwanaga said in the interview. As of November, the company had a pipeline of approximately $1bn of indicated interest for ammonia from potential customers, which included large farms and mining companies in several global jurisdictions, including the US.

It recently completed a $22m Series A fundraising that would fund the delivery of the next three to four systems before the end of the year, Iwanaga said, stretching Talus’ footprint to Europe and the US, with one more system heading to South America.

The company is deploying to large farms and mining companies, where ammonia is used as a blasting agent. In the US, the company has partnered with agribusiness Wilbur-Ellis and farmer-owned cooperative Landus, Iwanaga said.

Iwanaga and GLC did not respond to requests for comment about the recently launched capital raise.

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exclusive

Biomass-to-hydrogen developer in talks for development capital, series A

A California developer that uses woody biomass to make green hydrogen is in discussions to raise capital for project development and a series A funding round.

Yosemite Clean Energy, a California-based biomass-to-hydrogen start-up, is in discussions with potential investors to raise development capital for projects and a series A round.

The company is currently seeking around $20m of development capital that would help advance woody biomass-to-hydrogen projects to FID, CEO Tom Hobby said in an interview.

Hobby said he is also in discussions with strategic capital partners about a series A funding round. The company is not using an advisor for the capital raise, Hobby said, but is working with the law firm Kilpatrick Townsend & Stockton.

The company has so far raised less than $2m at the corporate level from friends and family and an additional $5m – including grants – for projects, Hobby added. The development capital as well as the series A raise would be conducted at the project level.

Yosemite has signed a letter of intent and term sheet for offtake from its first project in Oroville, California, which will produce approximately 24,000 kg per day (2,760 MMBtu) of green hydrogen from woody biomass, and is set for FID later this year. Hobby declined to name the offtaker but described it as a “global trading house.”

Hobby, whose family has lived in the Sierra Nevada for generations, emphasizes the company’s role as a partner with local communities to help manage forest waste, which has served as fuel for explosive wildfires in recent years.

“It’s de-risking their communities from catastrophic wildfires,” he said.

Design incentives

Under the original design for the Oroville facility, the company had planned to produce 31,000 kg per day of RNG and 12,200 kg per day of green hydrogen. But due to incentives for green hydrogen in the Inflation Reduction Act, the company has pivoted to a hydrogen-only design, Hobby said.

The $3/kg incentive for green hydrogen in the IRA created “additional value for no real capital cost differential,” he said.

Yosemite’s second project is in Toulumne County, California and will follow a design substantially similar to the Oroville facility.

The company employs dual-bed gasification technology licensed from Austrian firm Repotec, while Primoris is doing detailed design and engineering.

The technology takes wood and creates a medium-strength BTU gas that can be used to make different products, Hobby said. “Once it’s in a gaseous form, we can use it for a lot of purposes: we can take it to make power, we can produce hydrogen, we can use the Fischer-Tropsch process to make second-generation biofuels like aviation fuel, and we have a patent that can do hydrogen and RNG.”

Project ownership

Meanwhile, Yosemite has hired a Texas-based firm to help raise capital for projects, which are estimated to cost $250m at the outset, but could decline once efficiencies are achieved, Hobby said.

The company’s project ownership model is unique in that it seeks to bring in local wood businesses – in logging, land clearing, and orchard removal – as providers of biomass and also equity investors in the projects.

“To have their investment and their wood at the same time is huge,” Hobby said.

In raising capital for the projects, in addition to equity and debt investors, Yosemite is evaluating a mix of sources in the tax-exempt bond market as well as lower-interest loans from within California and export finance solutions. The company recently received two $500,000 Forest Biomass to Carbon-Negative Biofuels grants from the California Department of Conservation.

Hobby would like to build 50 woody biomass plants in California, which would utilize approximately 5 million tons of the 35 million tons of waste woody biomass available annually in the state.

“Our goal is not to have to truck and ship wood more than 50 miles,” he said. “If you put circles around every place in California that’s a decent wood basket […] I think we could sign about 50 facilities across the state.”

The company is also planning to expand beyond California to other states with a low-carbon fuel standard, Hobby 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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