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Yara and BASF to study Gulf Coast blue ammonia project

The companies are looking into the feasibility of a plant with a total capacity of 1.2 to 1.4 million tons p.a. to serve the growing global demand for low-carbon ammonia.

BASF and Yara Clean Ammonia are collaborating on a joint study to develop and construct a world-scale low-carbon blue ammonia production facility with carbon capture in the U.S. Gulf Coast region, according to a news release.

The companies are looking into the feasibility of a plant with a total capacity of 1.2 to 1.4 million tons p.a. to serve the growing global demand for low-carbon ammonia.

“Yara and BASF have successfully collaborated in the past and we are pleased to explore a new clean ammonia project together. In line with Yara Clean Ammonia’s strategy, we are working systematically to develop asset-backed supply to decarbonize agriculture as well as serving new clean ammonia segments such as shipping fuel, power production and ammonia as a hydrogen carrier,” said Magnus Krogh Ankarstrand, President of Yara Clean Ammonia.

Approximately 95 percent of the carbon dioxide (CO2) generated from the production process is aimed to be captured and permanently stored in the ground. This would allow Yara to serve its customers with clean ammonia with a significantly reduced product carbon footprint. For BASF, the new plant would act as backward integration to serve the company’s demand for low-carbon ammonia and would lower the carbon footprint of its ammonia-based products.

“This project underlines BASF’s commitment to drive the sustainable transformation of the chemical industry. Our existing Verbund sites in the region with integrated material flows and advanced infrastructure would be ideally suited for the integration of a new world-scale ammonia facility that has the potential to significantly improve the carbon footprint of both our own operations and the various industries we serve,” said Dr. Ramkumar Dhruva, President Monomers Division, BASF.

BASF and Yara are long-standing collaboration partners and successfully operating a joint world-scale ammonia plant at BASF’s site in Freeport, Texas. The companies plan to complete the feasibility study on the low-carbon blue ammonia production facility by end of 2023.

The product characteristics of blue ammonia are identical to conventionally produced ammonia. Since the CO2 generated in the production process is captured and not released to the atmosphere, blue ammonia plays a significant role in the transition to alternative, less carbon-intensive products. BASF aims to reduce its absolute CO2 emissions by 25 percent by 2030 compared to 2018 and achieve net zero CO2 emissions by 2050. Yara has a strong track record in greenhouse gas abatement. Since becoming a listed company in 2004, Yara has almost halved its emissions and will reduce a further 30 percent by 2030. Yara aims to become climate-neutral and grow a nature-positive food future.

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Ammonia future trades

The 5,000-tonne futures contract was traded at $385/t for May delivery and cleared through ICE, helping to enable development of an ammonia forward curve.

Global energy and commodity price reporting agency Argus said today that the first-ever futures ICE Ammonia Outright – Argus Ammonia NWE CFR Future contract has traded between counterparties in a deal brokered by Freight Investor Services (FIS).

The 5,000-tonne futures contract was traded at $385/t for May delivery and cleared through ICE.

Ammonia has historically been used as a feedstock for the global fertilizer industry, but its potential as a clean fuel of the future could see its importance grow as the world experiments with more sustainable energy sources. There is interest from both power generation and marine fuels markets, both of whom see potential in low-carbon ammonia as an energy source.

The first step in this process is trading ammonia futures based on the current market, which enables an ammonia forward curve to be developed that will provide the basis for more sustainable low-carbon ammonia investment decisions. Grey ammonia futures can act as a base contract to price future blue and green ammonia trading, or as a basis to wherever that green or blue ammonia is geographically located.

CEO of FIS, John Banaszkiewicz, said: “This is an important trade for many sectors, beyond shipping and fertilizers. ICE’s ammonia contract will be a cornerstone of price discovery and risk management as ammonia is unquestionably one of the most important fuels in our energy transition to a cleaner future. We are delighted to play our small part in helping this market develop.”

Jeff Barbuto, global head of oil markets at ICE, said: “Ammonia’s potential as an alternative fuel source continues to develop as new technologies and markets evolve. We’re excited to work with our customers to further build out the market and this contract alongside ICE’s vast suite of energy derivatives and risk management tools.”

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Yara Growth Ventures invests in electrolyzer start-up

Yara Growth Ventures has made an investment in Dynelectro, an electrolyzer start-up aiming to increase the lifetime of solid-oxide electrolysis systems.

Yara Growth Ventures has invested in Dynelectro, a developer of technologies to unlock the potential of solid oxide electrolysis (SOE), according to a news release.

Dynelectro’s approach increases the lifetime of SOE systems dramatically from typically 2 to 10 years, and it also allows for integration of SOE with intermittent renewable electricity – a key requirement for large scale adoption.

“While solid oxide electrolysis has the best potential for low cost, it suffers a niche existence due to system lifetime issues. We believe Dynelectro will overcome these issues and pave the way to make low-cost renewable hydrogen a reality,” said Björn Heinz, Investment Director and part of the Yara Growth Ventures team.

The investment follows the company’s seed investment round, which was led in May 2023 by The Export and Investment Fund of Denmark (EIFO), Denmark’s national promotional bank and export credit agency, with contributions from Vsquared Ventures, a leading European deep-tech fund, and further local venture investors. The funding will be used for demonstration projects and further technology development.

Additional details of the investment were not disclosed.

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Ares acquires RNG developer

Ares has made a strategic investment to acquire RNG developer Dynamic Renewables in a process run by Lazard.

Dynamic Renewables, a full-service developer, owner and operator of waste management and anaerobic digestion renewable fuel projects across the U.S., has been acquired by fund managed by Ares Management’s Infrastructure Opportunities strategy, according to a news release.

In addition, an unregulated affiliate of NorthWestern Energy has acquired a small minority stake in the company.

Terms of the deal were not disclosed. Lazard acted as financial advisor to Dynamic on the transaction. Husch Blackwell served as legal counsel to Dynamic. Latham & Watkins LLP served as legal counsel to Ares.

The investment from Ares is intended to support Dynamic in the further development and construction of its broader pipeline of renewable natural gas (“RNG”) assets located throughout the U.S. Ares has approximately $14.9bn in infrastructure equity and debt assets under management as of March 31.

Founded in 2011, Dynamic is a leading fully integrated origination, development, financing and operations platform that provides waste recovery solutions focused on the dairy and food processing industries. Dynamic has a material project development pipeline and is currently overseeing the construction of six assets, which are expected to be operational by the end of 2023 and forecasted to generate a combined total of more than 4,000 MMBtu per day of renewable natural gas. These six projects are projected to mitigate more than 300,000 metric tons of carbon dioxide emissions per year.

Dynamic is also the owner of BC Organics, a flagship asset developed by the Company. Located in Brown County, Wisconsin, BC Organics is a large-scale biorefinery facility that sources dairy manure feedstock from eleven multigenerational farms and comprises sixteen anaerobic digester tanks capable of processing 900,000 gallons of manure per day. BC Organics will produce carbon negative transportation fuel and provide its partner dairy farms with a long-term, sustainable manure management solution that converts the feedstock into clean water and reusable animal bedding.

Dynamic is led by its co-founders – Chief Executive Officer Duane Toenges, Chief Technology Officer Dan Nemke and Executive Vice President of Special Projects Karl Crave – who have worked together in the anaerobic digestion industry for nearly two decades.

“We are excited about the business we have built in Dynamic and our current momentum,” said Toenges. “Ares brings a wealth of experience in investing and developing projects in the renewable natural gas industry. They have expressed their support for the Company and our strategy in achieving our next phase of growth. Further, the recent commissioning of our BC Organics project is a tremendous milestone for Dynamic, and we look forward to completing additional projects this year for our strategic partners.”

“We are thrilled to partner with Dynamic, and our investment is aligned with Ares’ commitment to accelerate the transition to a lower-carbon economy through the Company’s innovative waste management and anaerobic digestion capabilities,” said Andy Pike, partner and co-head of Ares Infrastructure Opportunities. “Dynamic has a demonstrated track record of leadership in the rapidly growing renewable fuels sector, and we look forward to working together to build out its pipeline while supporting local communities in delivering more sustainable waste management practices.”

“We are pleased to further our existing relationship with Dynamic with this minority investment in the Company,” said Brian Bird, president and chief executive officer of NorthWestern. “The investment in Dynamic is a positive step for NorthWestern in meeting its net zero goals and a great opportunity to expand the RNG production capabilities of our service territory and its surrounding area. We are excited about the growth of the RNG industry, the carbon negative fuel that Dynamic’s assets will generate, and the complementary nature of this investment with our long-term goals.”

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Quantron kicks off Series B equity raise

The German and American mobility provider is seeking to raise EUR 200m in a Series B equity raise, as the company plans to become a one-stop-shop for hydrogen-powered commercial vehicles, according to a teaser.

Quantron, the Germany and US-based hydrogen trucking manufacturer, is seeking to raise EUR 200m in a Series B capital raise, and has further plans to raise money in a Series C in 2024 or 2025, followed by an anticipated IPO beyond 2025.

The company plans to use proceeds from the Series B accelerate the roll-out of existing production and make additional market entries included expanding its operations in the US, according to a sale teaser seen by The Hydrogen Source. Stifel is leading the capital raise, as previously reported.

By advancing a full-scale zero-emission ecosystem, Quantron is seeking to take part in the sourcing and distribution of green energy and hydrogen, as well as building fuel cell and battery electric vehicles and components and offering customer solutions like aftersales, the teaser notes.

Quantron, which has offices in Augsburg, Germany and Detroit, Michigan, has brought in about EUR 28m in revenues since inception and expects EUR 60m in revenue this year, fueled by a EUR 100m order book and pipeline. The company has put 150 vehicles on the road to date and has 130 employees.

Its Series A capital raise of EUR 45m, completed in September, 2022, implied a EUR 250m pre-money valuation. The ongoing EUR 200m capital raise will come in the form of the Series B financing as well as working capital facilities.

The company recently announced commitments with FirstElement Fuel and Goldstone Technologies Limited. Quantron debuted its Class 8 hydrogen fuel-cell truck in the US at the Advanced Clean Transportation Expo in Anaheim, California in April.

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Exclusive: Hydrogen adoption and production firm prepping capital raise

A decarbonization services provider is in development on multiple utility-owned hydrogen adoption projects in the Northeast, Texas and Georgia and is preparing to launch a capital raise in 3Q24.

Celadyne, a Chicago-based decarbonization and hydrogen solutions company, will launch a Series A this year as it continues its role in the development of several utility-owned hydrogen adoption projects in the US, founder and CEO Gary Ong told ReSource.

A $20m to $30m capital raise will likely launch in 3Q24, Ong said. The company is relying on existing investors from its recent seed round to advise, and the amount could change based on grants.

While the $4.5m seed round allowed the company to focus on transportation mobility, the Series A will be used to do more work on hydrogen production, so the company will be looking for strategics in oil and gas, renewable energy, and utilities.

DLA Piper is the company’s legal advisor, Ong said.

Celadyne has a contract signed with a utility in the Northeast for a small electrolysis demonstration and, following that, a multimillion-dollar project. Discussions on how to finance that latter project are underway.

Additional electrolysis projects in Texas and Georgia are in later discussions, while less mature deals are taking shape with a nuclear customer in Illinois and another project in Southern California, Ong said.

Fuel cell customers (typically OEMs that use hydrogen) to which Celadyne ships equipment are clustered mostly in Vancouver, Michigan and California.

Meanwhile, Celadyne has generated revenues from military contracts of about $1m, Ong said, a source of non-recurring revenue that has prodded the company to look for a fuel cell integration partner specific to the defense application.

‘Blocking hydrogen’

The company, founded in 2019, is focused on solving for the demand and supply issues for which the fledgling US hydrogen market is notorious. Thus, it is split-focused between hydrogen adoption and production.

Celadyne has developed a nanoparticle coating that can be applied to existing fuel cell and electrolyzer membranes.

On the heavy-duty side, such as diesel generators or back-up power, the company improves durability of engines between 3X and 5X, Ong said.

On the electrolysis side, the technology improves rote efficiency by 15%. In production, Celadyne is looking for pilot projects and verification studies.

“We’re very good at blocking hydrogen,” he said. “In a fuel cell or electrolyzer, when you have hydrogen on one side and oxygen on the other side, you need something to make sure the hydrogen never sees the oxygen,” noting that it improves safety, reduces side reaction chemistry and improves efficiency.

Hydrogen adoption now will lead to green proliferation later should the economics prove out, according to Ong. If not, blue hydrogen and other decarbonized sources will still pave the way to climate stability.

The only negative for that is the apparent cost-floor for blue hydrogen in fuel cell technologies, Ong said, as carbon capture can only be so cost efficient.

“So, if the price floor is say, $3.25 or $3.50 per kg, it doesn’t mean that you cannot use it for things like transportation, it just means that it might be hard to use it for things like shipping, where the fuel just has to be cheaper,” Ong said.

Three companies

Celadyne is split into three focus applications: defense, materials, and production. If only one of those wings works, Ong said he could see selling to a strategic at some point.

“If any of those things work out, we ought to become a billion-dollar company,” he said.

If all three work out, Ong will likely seek to do an IPO.

An acquisition could be driven by an acquiror that can help Celadyne commercialize its products faster, he said.

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Exclusive: Coal bed methane producer seeking capital partners

A western US company producing RNG by injecting biomass into coal seams is preparing a Series B and has a line of site to financing and contracting EPC for a series of projects in western coal fields.

Cowboy Clean Fuels, a Wyoming-based RNG producer, is preparing to launch a Series B to reach commercialization, CEO Ryan Waddington told ReSource.

CCF injects biomass feedstock like molasses into the coal seams of spent coal mines about 1,000 ft. below surface, relying on the endogenous microorganisms living in those seams to produce methane, Waddington said. Capex on projects is low, up to $6m each.

The company raised $10m in a Series A and will seek to raise that same amount for a Series B. The company has been assisted by Syren Capital Advisors.

Projects are set up as separate entities under the parent, Waddington said. Six projects, each ranging from 70 to 300 wells, are in the company’s pipeline now in the Powder River Basin of Wyoming and Montana.

“We can replicate this 1,000 times,” Waddington said of the immense number of available wells in the region, which can be acquired cheaply. Additional growth could come in the San Juan region of New Mexico, where coal capacity is being retired quickly.

The fuels could be sold as renewable diesel into markets with incentives, like California’s LCFS, Waddington said. The renewable fuel is significantly (10X) more expensive than natural gas produced as a by-product of oil production. But, CCF is not looking to participate in the LCFS program or the EPA-run RFS program.

“The voluntary market for RNG has really taken off,” he said. A contract for renewable diesel offtake is pending with a Wyoming-based oil and gas company looking to lower its CI score.

CCF’s projects are much larger than a typical RNG project, Waddington said; the first project will produce at some 700 cfpy and include 185 tons of CCS. CCF is looking for EPC providers now.

The executive team of CCF has a minority position of the company, Waddington said. The founders and the management team together have a majority position.

The company’s first 139-well project in Wyoming is awaiting final approval from the federal Bureau of Land Management.

CCF is primarily VC-backed to date. The company received approximately $7.8m through the Energy Matching Funds program of the Wyoming Energy Authority early this year.

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