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Vertex Energy appoints advisor for renewable fuels strategy

NASDAQ-listed Vertex has engaged BofA as strategic financial advisor.

Vertex Energy, Inc., a specialty refiner and marketer of refined products, has named BofA Securities as strategic financial advisor to assist with its renewable fuels and sustainable products growth strategy.

During this engagement, the company expects to review various potential strategic transaction opportunities aimed at strengthening the balance sheet to support growth acceleration and asset development in line with the company’s forward trajectory as an energy transition company, it said in a statement.

Vertex has not set a timetable for the completion of this process and does not intend to comment further unless or until the Board of Directors has approved a definitive course of action, or it is determined that other disclosure is necessary or appropriate.

Benjamin P. Cowart, President and CEO of Vertex, stated, “Scaling our renewable fuels and sustainable products strategy is a top priority for us. As such, we are tightening our focus on strategic initiatives and considering options that optimally support our long-term vision. We believe BofA has the right tools and expertise to help us transition into this next phase of development for the company.”

Vertex Energy commissioned its first renewable diesel facility at the company’s Mobile refinery and the first renewable diesel facility in Alabama in. May.

In 2022, Vertex acquired a conventional fuels refinery from Shell plc, immediately launching a $115m conversion project. The primary aim of the project was to convert a standalone unit within the refinery to facilitate the production of renewable diesel, a cleaner and more sustainable alternative to petroleum diesel fuel.

The project reached mechanical completion on March 31st of this year.

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Aemetis raising project finance for SAF facility

California renewable fuels company Aemetis is in an advanced process to raise approximately $500m in project financing for its Riverbank sustainable aviation fuel facility.

Cupertino, California-based Aemetis is far along in a process to raise roughly $500m for its Riverbank sustainable aviation fuel (SAF) facility – the largest of several capital raises the company is pursuing, CEO Eric McAfee said today.

The financing for the Riverbank facility, which just received final permitting authorizations, is expected to include preferred equity as well as senior secured debt financing, he added.

“We are well into a process of project financing,” McAfee said, a process delayed by the permit hindrances, in what will amount to a package in the “half a billion range.”

Shares for publicly-listed Aemetis traded today at $3.26 and a $129m market cap.

For the Riverbank project, Aemetis has already signed a deal for 20-year senior debt financing under the USDA Biorefinery Assistance Program, he said.

“But we have multiple opportunities in senior secured debt and we’ve got a very active customer base among airlines, many of whom have already funded into funds that are dedicated to the growth of SAF production,” he said.

He noted that airlines as well as manufacturers of widebody jets have all joined together to provide  mezzanine or equity financing to support SAF. “And we have active discussions with the largest of those investors,” he said.

The company has signed $3.8bn of final binding supply agreements with 10 airlines and a $3.2bn renewable diesel supply contract with the National Travel Stop Company, executives said on the call. In its five-year plan, Aemetis estimates the Riverbank facility will generate revenue of $672m with adjusted EBITDA of $195m in 2027 from the 90 million gallon plant.

Aemetis also expects to close on $75m of financing for biogas projects, and is also also raising a “little bit” of carbon sequestration financing, McAfee said.

The company generated LCFS credits from its biogas operations for the first time in Q124, 

“In addition to the sale of renewable natural gas as a fuel and the sale of federal D3 RINs, this new LCFS credit revenue stream will only increase as we build new digesters and as the California Resources Board approves the lower carbon intensity values that we have already demonstrated in actual operations ,” Andy Foster, president of North America said.

Though there have been delays in updating the California LCFS regulations for 2024, Foster noted that the California Air Resources Board’s model estimates the regulatory changes will raise the price of LCFS credits to more than $220 per credit in the next two years. The price of the credit has recovered from recent lows and is trading around $67 currently.

“There clearly was a realization that the LCFS credit overhang in the market was causing a serious deterioration in the ability for companies like us to make return on investment and further invest in programs, but also to encourage new investment in the entire renewable sector,” Foster said of the rule changes.

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Viking testing first hydrogen-powered cruise ship

Viking is using the small H2 system to test how hydrogen fuel could be used at a larger scale.

The Viking cruise line has received its first ship testing the use of hydrogen power, according to a press release.

The ship, the Viking Neptune, is equipped with a small hydrogen fuel system for on board operations. Viking is using the small system as a test to determine how hydrogen fuel could be used at a larger scale in future newbuilds.

Delivery took place when the ship was presented at Fincantieri’s shipyard in Ancona, Italy.

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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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Exclusive: CO2-to-SAF tech firm in new capital raise

A technology company with a novel process to convert CO2 into fuels and chemicals is extending a capital raise that previously closed with inputs from several oil and airline majors.

OXCCU, the UK-based clean fuels production company, is extending a Series A raise it closed last year with an eye on growth in the US, CEO Andrew Symes told ReSource. 

The raise, characterized as a Series A2 by Symes, is being conducted in-house, he said. It builds on the GBP 18m (USD 22.7m) Series A it finished last year, led by Clean Energy Ventures.

Aramco, ENI and United Airlines are also among the company’s backers.

OXCCU, a spin out of Oxford University, plans to raise additional money to scale its catalytic process converting hydrogen and carbon dioxide into sustainable aviation fuel (SAF) and other products. A patent grant, filed in 2020, is anticipated this year.

“We don’t want to be the project developer, we want to license to the project developer,” Symes said of the company’s business model.

Fuel made combining carbon dioxide (captured from industry or power plants) with green or clean hydrogen will be cheaper based on OXCCU’s iron-catalyst process, Symes said, which requires one step instead of the traditional two-step process.

OXCCU is looking for partners to engage with on sustainable aviation fuel (SAF) projects in the US, Symes said. This year the company will deliver a pilot plant in the US and plans to complete a 160 kilogram-per-day plant in Sheffield, UK in 2026.

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California renewables firm in talks for green fuel co-development

A utility-scale solar and storage developer based in California has started outreach and discussions to have green fuels projects co-developed at some of its larger sites in the western US.

RAI Energy, the California-based solar and storage developer, has started to engage with other companies about developing green fuels along with its utility-scale projects, CEO and owner Mohammed S. Alrai said in an interview.

RAI recently took a development loan from Leyline Renewable Capital. That transaction ends a process launched by Keybanc first reported by The Hydrogen Source.

Alrai remains the 100% equity owner, he said. The liquidity from Leyline will last about two years.

The company’s most impending projects are in Colorado and California, Alrai said. Discussions around green fuels envision a partner coming in as a co-developer and customer for RAI’s renewable power.

“We’re definitely open to entering into conversations with all stakeholders,” Alrai said, adding that the effort could require capital raising. “We will be coming to the market to potentially raise equity.”

RAI is moving toward long-term ownership and operation of projects, he said. The company could also sell projects to raise capital.

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Hydrogen developer raising equity for US and EU projects

A Washington, DC-based hydrogen developer has hired an advisor to raise equity for three projects in California, and is laying the groundwork for a second capital raise in the EU.

SGH2 Energy, a Washington D.C.-based hydrogen developer, is in the early stages of a process to raise project equity for its three California projects.

Morgan Stanley has been retained to run the process, which could result in taking on two investors, CEO Robert Do said in an interview. The company hopes to have the process wrapped up within three months, he added.

Do declined to disclose the amount he is seeking to raise, but said the company prefers a strategic investor that can co-develop projects outside of California.

Meanwhile, SGH2 has filled out 70% of the senior debt commitments it will need for its Lancaster, California plant, Do said. At the Lancaster plant, SGH2 plans to produce up to 12,000 kilograms (1,380 MMBtu) of clean hydrogen per day, and 4.5 million kilograms per year (517,000 MMBtu) from the conversion of 42,000 tons per year of rejected recycled mixed-paper waste.

An additional set of three projects in Germany, Belgium and Holland will need an equity provider as well, Do said. That process could launch at the end of this year and the company could hire additional financial advisors.

A less expensive proposition

In addition to the Lancaster plant, SGH2 is advancing a Bay Area agricultural waste-to-hydrogen project in Stockton and a Sierra Valley forest residue-to-hydrogen plant.

Lancaster has offtake agreements for 10 years, and the company is in talks with the same offtaker for the other projects.

SGH2’s process requires about five acres of land for a project, as opposed to about 300 acres for solar-powered electrolysis, Do said. The process also requires less water.

“It gives us a cost-competitiveness where we can be two-to-three times cheaper,” Do said.

SGH2 is exporting that process to Europe, Do said. The EU is still going through iterations of new legislation, particularly the Renewable Energy Directive III, that could clarify SGH2’s place in that market.

“Until the legislation is clear it’s hard to really launch the project and know what kind of support you’re getting,” Do said. SGH2 has sites, feedstock and development partners in place for Europe.

SGH2 was spun off from a technology development company that raised about $50m from various VC firms and energy companies, Do said. He is the controlling owner of SGH2.

Do plans to expand across the globe and will be raising money to fund projects in Korea, South Africa and elsewhere.

“There will be indeed opportunities for us to work with additional bankers and funders,” he said.

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