Danish Company Turns Poop Into Profit via Biochar and Carbon Credits

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To bring its groundbreaking biomass treatment technology to the global market, AquaGreen, a Danish engineering company, received $4.4 million from Nordic Alpha Partners and Swedish FMG Circular Invest.

FMG Circular Invest is a joint investment initiative between Feralco Group and its owner Mellby Gård. The Danish Workers Pension Fund (ATP) also supports AquaGreen.

The company’s revolutionary technology helps in the fight to reduce emissions while paving the way for a circular economy. 

AquaGreen: Pioneering the Circular Economy with Innovative Technology

AquaGreen is at the forefront of the circular economy through its patented technology that transforms biowastes into resources. This innovative technology enables industries to turn biomass and waste like sewage sludge into renewable energy, biochar, and activated carbon. 

The company’s engineers are working closely with scientists and professors from renowned universities, and dedicated partners. Its state-of-the-art technology is patented with the Technical University of Denmark (DTU) and earned the company various innovation awards. 

Noting AquaGreen’s unique solution, co-CEO of Feralco Group Ludovic Huitorel, remarked that:

“The trends related to the circular economy within wastewater treatment are strong… AquaGreen is well-positioned to meet the market’s demand for the elimination of microplastics and medical residues, in wet biomasses.”

An average person discharges around 2 tons of biowaste (or poop) a year. Wastewater treatment facilities either spread the waste on farmlands, store it, or burn it. These options are expensive and are bad for the environment and the climate. 

Carbon Footprint of WWTPs

Source: Wu, Ziping et al. (2022). A comprehensive carbon footprint analysis of different wastewater treatment plant configurations. https://doi.org/10.1016/j.envres.2022.113818.

During their operations, wastewater treatment plants (WWTPs) generate greenhouse gasses like carbon dioxide, methane, and nitrous oxide, including CO2 emissions from the energy production required to run these plants. These gasses are known to exacerbate climate change.

AquaGreen offers a solution to this escalating issue. Its innovative technology eliminates harmful substances in biomass and lowers greenhouse gas emissions.

How Does AquaGreen Biomass Technology Work?

AquaGreen’s biomass treatment technology is a game-changer in waste management. Their continuous, fully automated process (integrated steam-drying and pyrolysis) uses the calorific content of waste to fuel its own system. 

This software-controlled system reduces waste management costs by up to 90% as it requires little manpower for operation. Plus, monitoring the system is possible remotely.

The process not only turns wastes into valuable resources but also eliminates harmful pollutants, cuts GHG emissions, and stores CO₂ in biochar. This significantly contributes to environmental sustainability and climate change mitigation efforts, while generating revenue from waste. 

Here’s how AquaGreen’s technology works, explained in the video.

Impact on Climate and the Environment

AquaGreen’s innovative HECLA® technology runs with an integrated steam dryer and pyrolysis system. Sewage sludge is steam-dried and the remaining biomass is then pyrolyzed in the absence of oxygen at 650°C. 

The technology converts biomass into biochar, which reduces or eliminates the environmentally harmful substances. During this process, essential nutrients and minerals for plants and animals like phosphorus are preserved. 

The process also significantly reduces CO₂ emissions. First, it prevents the sludge from dissolving and releasing planet-warming greenhouse gasses. Second, it binds CO₂ into the biochar.

The system is self-sufficient and circular because the gasses produced during pyrolysis fuels both the steam drying and pyrolysis processes. The excess steam, condensed into hot water, is applicable for district heating grids and other applications. 

With just one AquaGreen HECLA® Setores 1,000 Plant, it can handle the waste from up to 75,000 individuals. More remarkably, the plant is capable of achieving these climate-friendly results:

Reduce GHG emissions by 1,800 tons of CO₂ equivalent
Produce 2,000 MWh of energy
Store 500 tons of carbon in biochar

The resulting biochar is odorless and contains up to 6% plant-accessible phosphorus and other valuable nutrients. 

From Sludge to Biochar to Carbon Credits

Through AquaGreen’s HECLA® technology, sewage sludge can be converted into biochar, which is a stable and effective carbon sequestration method. Biochar produced at temperatures above 600°C has a high stable carbon content of above 90%. 

Studies also show that biochar can sequester up to 2-3 tons of carbon per ton of biochar applied. 

This method offers a long-term mitigation as it can sequester carbon up to thousands of years when added to soil. Plus, it can also improve soil quality by enhancing water retention, nutrient availability, and microbial activity.

Companies or projects that sequester carbon and reduce GHG emissions through biochar are eligible to earn carbon credits. These credits are tradable in the carbon markets and represent certain amounts of carbon removed from the atmosphere. Each credit corresponds to a tonne of atmospheric carbon removed or reduced. 

AquaGreen’s HECLA® technology has shown its capability in providing sustainable wastewater management as well as reducing GHG emissions. 

The EU alone would need around 5,000 HECLA® plants to address its wastewater treatment requirements. This fact, plus the climate benefits of its technology, is the reason for AquaGreen’s new investment.

With AquaGreen’s innovative biomass treatment technology, waste management takes a leap towards sustainability and climate action. By converting biowastes into valuable resources while sequestering carbon through biochar, the company contributes to climate change mitigation.

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Abu Dhabi Asset Management Firm to Build $250M Carbon Fund

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Offset8 Capital, an Abu Dhabi asset management company, plans to raise $250 million for a carbon investment fund as demand goes up for better-regulated carbon credits.

The company aims to close the initial capital for the carbon fund in the third quarter of this year. The firm decided to establish the fund in the Abu Dhabi Global Market (ADGM) to take advantage of its framework that regulates carbon credits. 

Once closed, the carbon investment fund will be the first of its kind in the Middle East.

Offset8’s Carbon Investment Fund 

Offset8 Capital seeks to provide funding to projects and companies that actively engage in reducing global carbon emissions. Its primary goal is to finance carbon removal projects that don’t just cut emissions but also benefit the local communities.

The Abu Dhabi firm believes that the voluntary carbon market needs to become easier to understand to attract more stakeholders to further accelerate the fight against global warming.

With those in mind, the company plans to close a $250 million carbon fund. Proposed investments will target carbon reduction projects in the Middle East, Africa, and Southeast Asia. Its current pipeline of carbon removal projects includes reforestation, mangrove, water purification, biodiversity, and biochar. 

To date, Offset8 identified over 50 projects in 29 countries that it expects will form the fund’s investment pipeline. In evaluating these projects, the firm will depend on the Integrity Council on the Voluntary Carbon Markets’ Core Carbon Principles for high-quality carbon credits.

Offset8’s plans for raising the carbon fund follow the emirate’s launch of its own carbon credit exchange last year. 

Abu Dhabi sovereign fund Mubadala acquired a strategic stake in AirCarbon Exchange (ACX), which established the carbon credits trading exchange and trading house in the UAE capital. This move supports the plan of the oil-rich emirate to allow companies to fund and trade carbon credits. It is part of UAE’s net zero strategies and efforts to offset its emissions. 

According to Offset8 Capital’s co-founder, Abu Dhabi’s regulatory framework considers carbon credits as both a financial instrument and a spot commodity that improves compliance and capital requirements.

These actions are in line with the UAE’s preparation for hosting this year’s premier climate change summit COP28. The climate conference’s president is the CEO of the Abu Dhabi National Oil Company (ADNOC). This, and the fact that the country has been pumping huge amounts of oil and gas, stir criticisms from environmentalists. 

More Demand Comes More Scrutiny

Not only does the major oil-producing country scrutinize climate-related issues. The voluntary carbon markets (VCMs) are also receiving their share of criticisms. These markets have been seeing a swift increase in trading transactions and growing demand from corporate offsetting goals. 

The rapid market growth leads to the creation of new guidelines and calls for stricter regulations. Serious accusations arise pertaining to the swamp of worthless credits. Highlighting this matter, another Offset8’s co-founders, Jules Maitrepierre, said: 

“When demand grows there’s naturally more scrutiny and a lot of projects have not been of a quality standard…Now corporates understand the need for high-quality credits and the projects understand that in order to attract capital they need to follow strict guidelines.”

Indeed, addressing this concern, international carbon standards published better principles and rulebooks governing carbon markets. And despite challenges on limited high-quality supply, corporate demand for carbon offset credits remains strong. 

The overall outlook for the VCM is positive, with more buyers joining the ‘flight to quality’. It means buyers are becoming more involved earlier in projects and focusing more on contribution over mere offsetting.

Currently, Offset8 Capital is a team of 12 individuals bringing in diverse expertise in the areas of carbon markets, commodity trading, investment, and asset management in emerging markets. All of which are relevant to sourcing high-quality carbon projects and generating the corresponding carbon credits. 

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Xpansiv and Puro.earth Partner to Scale Carbon Removal Credits Market

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Puro.earth and Xpansiv to partner to expand the market for carbon removal credits and strengthen net zero programs. 

Nasdaq-backed Puro.earth is the world’s leading carbon crediting platform for engineered carbon removals (CDR) while Xpansiv is the dominant market infrastructure for the global energy transition. 

A Giant Merge to Scale Carbon Removals 

Efforts have been made in ramping up the carbon removals credit market. This very recent tandem between the two leading market platforms marks a significant development in the space. 

The partnership makes Puro.earth CO2 Removal Certificates (CORCs) added to the list for trading on Xpansiv spot marketplace CBL. The market is the largest spot exchange for trading voluntary carbon credits, renewable energy certificates (REC), and other environmental commodities.

Puro.earth’s robust, diverse supplier base provides buyers with a great source of quality carbon removal credits. Its platform currently delivers carbon removal services to some of the world’s giant corporations, such as Shopify and Microsoft.

Puro.earth launched Puro Registry, a public registry dedicated to CORCs last year.

Xpansiv’s CBL offers hundreds of market participants transacting on its centralized and transparent spot exchange and post-trade platform. Xpansiv is the leading provider of registry infrastructure for energy, power, and environmental markets.

Remarking on their partnership, Xpansiv said that participants are eager to include carbon removal credits in their portfolios. 

Highlighting the importance of their collaboration with Xpansiv, Puro.earth’s CEO Antti Vihavainen said that scaling up the market for carbon removal credits is essential in the private sector’s net zero programs. Vihavainen further noted that 

“CBL’s central position in the carbon markets will be critical in enhancing transparent price discovery and liquidity formation, enabling participants to engage with greater certainty and confidence.”

Carbon removals are becoming more important in companies’ decarbonization strategies, particularly for the hard-to-abate sectors of steel and cement.

Credits for Removing Carbon for Good

Puro.earth’s guiding principle is to create undisputable methodologies for engineered carbon removals. The platform’s ecosystem consists of more than 110 suppliers of carbon CORCs with 600 firms in preparation for getting certified.  

Engineered carbon removals are also known as negative emissions technologies. They refer to a set of technologies and methods designed to actively remove CO2 from the atmosphere. Unlike natural carbon removal processes, engineered carbon removals are man-made processes to mitigate the impacts of climate change.

Last year, Nasdaq launched three carbon removal price indexes based on Puro.earth CORCs.

Puro.earth Standard establishes carbon credit methodologies for processes that remove CO2 from the atmosphere for at least 100 years. The company then certifies suppliers that run those processes and issues digital, tradable carbon removal credits into Puro Registry.

The company has recently updated its Terrestrial Storage of Biomass methodology and is reopened for more comments or insights. Initiatives that may certify under this program prevent the escape of carbon from the stored biomass back into the atmosphere. 

The partnership between Xpansiv and Puro.earth plays a crucial role in enhancing transparent price discovery and liquidity formation, enabling a more sustainable and confident engagement with carbon removal efforts and credits.

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Turning CO2 Into SAF Via “Industrial Photosynthesis”

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Breaking new ground in the aviation industry, the startup Twelve is set to revolutionize sustainable aviation fuel (SAF) production in the U.S. It recently broke ground on a commercial-scale facility in Washington state, which it claims will be the country’s first to create SAF from carbon dioxide.

The groundbreaking event, attended by Washington Gov. Jay Inslee, marks a historical milestone for an aviation industry under pressure to decarbonize.

Twelve began producing jet fuel in a Berkeley, California lab in 2021 using electricity, water, and CO2. The company refers to this product as E-Jet, a potential replacement for fossil-based fuel that could significantly reduce airlines’ carbon emissions.

Now, the California-based startup is scaling up efforts to produce more of this cleaner fuel at its commercial-scale facility in Moses Lake, Washington. If operations begin in 2024, the facility will be the first of its kind to convert CO2 into SAF.

Major corporations such as Alaska Airlines, Microsoft, and Shopify have recently signed deals to buy millions of dollars of SAF from Twelve’s new facility. 

Cutting Emissions By 90% 

Last year, aviation was responsible for 2% of global GHG emissions and is growing faster than any other transport modes. This emission will continue rising as more people and airplanes fly. 

In 2022, major U.S. airlines have burned over 17 billion gallons of jet fuel. Only a very small fraction of this consumption, below 0.1% or almost 16 million gallons was SAF.

So cutting further down the sector’s pollution is crucial in the fight against climate change. But substituting the planet-warming kerosene with SAF poses significant challenges. 

Global fuel companies and startups have been finding solutions to make it possible to fully replace fossil-based kerosene. And they are supported by the Biden administration through the Inflation Reduction Act. 

The climate law offers tax credits to producers of clean alternative fuels like SAF with $300 million in grants. The goal is to grow the supply of these fuels to 3 billion gallons annually by 2030.  

Twelve aims to produce 40,000 gallons of E-Jet per year before scaling up production by as much as 10x within the first 5 years of operation, said the chief officer Ram Ramprasad. The startup also plans to construct much larger facilities.

The company said that SAF can reduce the carbon emissions of airplanes by up to 90% versus fossil-based kerosene. Though using E-Jet still emits carbon, it’s much less than petroleum-based fuels. That’s because it recycles CO2 from the wastes of refineries and mills, or captured directly from the air. 

Twelve’s E-Jet From “Industrial Photosynthesis”

Twelve is using a unique method to transform CO2 into juice for jet engines in a process called “industrial photosynthesis”.

The process is pretty much the same as what plants do during photosynthesis. The difference is that Twelve’s electrochemical reactor named Opus performs photosynthesis.  

Opus takes water and CO2 and changes them into new chemicals, materials, or fuels using renewable energy. It splits CO2 molecules into carbon monoxide while in a separate electrolyzer, water molecules break down into hydrogen and oxygen. The result of these processes is called ​“syngas.”

The team is using a multistep reaction process called the Fischer-Tropsch to transform the gas into alternative jet fuel.

The company sources ​“waste” CO2 from industrial facilities. Its modular reactor can be installed in any industrial system, with a “plug-n-play” design.

According to Twelve, they can cut up to 10% of global emissions through Opus. And that’s possible by transforming supply chains from running on fossil fuels to running on waste or captured CO2.

Twelve Carbon Transformation Technology

Other startups are also using carbon to make synthetic jet fuel. For instance, LanzaJet, a spinoff of LanzaTech, is recycling municipal solid wastes, agricultural biomass and residues to make SAF. 

The company, which turned public this year, is constructing what it claims is the first ​“ethanol-based alcohol-to-jet” SAF production. The facility, which is due to finish this year, will make 10 million gallons of sustainable aviation fuel each year.

Air Company, another startup based in New York, is also working in the same space. Its innovative carbon conversion technology combines CO2 and hydrogen to make oily liquids suitable for making SAF. 

The company also makes carbon-negative alcohols and consumer products out of thin air. With its pioneer carbon technology, Air Company made the world’s first alcoholic beverage directly from CO2, Air Vodka.

The Key Challenge to Scaling SAF 

Right now, almost all of the country’s SAF supply is from used cooking oil and animal fats, and scarce feedstocks. This is why Twelve’s carbon transformation technology needs to scale up rapidly to supply the much-needed SAF.

In 2022, SAF production tripled to about 300 million liters or 240,000 tonnes, according to the International Air Transport Association. If renewable energy production hits 69 billion liters by 2028 as projected, the forecast to 100 billion liters (80 million tonnes) by 2030 is possible. If only 30% of that production is achieved, the industry can still have 30 billion liters (24 million tonnes) of SAF by the same year.

To produce E-Jet at its commercial plant, Twelve will first source CO2 from an ethanol refinery in neighboring Oregon. Then it will later get more CO2 supply from pulp and paper mills in Washington. 

The biggest challenge the company has in ramping up its SAF plants is the availability of power. They’re aiming to build their next facility in the American Corn Belt where ethanol facilities and wind farms abound. 

Finding sites where they can source CO2 and access renewable power is critical to scaling up sustainable aviation fuel production. 

Still, by leading the charge in developing cleaner and greener solutions through its innovative industrial photosynthesis, Twelve’s method is showing immense potential in cutting aviation’s carbon emissions. With the growing demand for cleaner fuels, plus government support, flying will be more sustainable in the future.

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Alibaba Cuts Carbon Emissions By 13%, Reveals So-Called Scope 3+

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In a bold stride towards a greener future, Chinese e-commerce titan Alibaba has successfully slashed its net carbon emissions from direct operations by an impressive 13% in the past financial year. This significant reduction is a part of Alibaba’s ambitious goal to achieve carbon neutrality by 2030.

The retail behemoth unveiled this remarkable achievement in its 2023 Environmental, Social, and Governance (ESG) report. The report also highlighted Alibaba’s groundbreaking progress towards its ambitious Scope 3+ goal, which aims to eliminate a whopping 1.5 gigatons of carbon emissions across its digital ecosystem by 2035. This marks the first time the company has reported on this pioneering sustainability effort.

Highlighting this milestone, Alibaba’s outgoing CEO and Chairman, Daniel Zhang Yong noted in the report:

“Despite challenges in the macro environment, geopolitical uncertainties in the post-pandemic era, and new trade-offs between sustainable development and economic growth, we achieved notable progress in our ESG initiatives.”

And one of these achievements is the CO2 emission reduction of almost 23 million metric tons throughout the value chain. This includes Scope 3 emissions. 

Alibaba’s Carbon Emissions and Reductions

In 2021, the Hangzhou-based company made three climate pledges as follows: 

Decarbonize operations (Scopes 1 and 2): achieve carbon neutrality in own operations by 2030.
Green the value chain (Scope 3): cut emission intensity by 50% from 2020 levels in collaboration with value chain partners. Alibaba Cloud will reach Scope 3 carbon neutrality by the same year. 
Enable a low-carbon circular digital ecosystem (Scope 3+): to achieve 1.5 gigatons of carbon reduction over 15 years across the digital ecosystem. Alibaba will leverage its digital platforms to attract more participation from stakeholders in reducing emissions. 

In its 2023 financial year, Alibaba took huge steps toward meeting these targets. 

As shown in the charts, the e-commerce giant emitted around 4.7 million metric tons (Mt) of CO2 equivalent, down 13% from the previous year. By cutting 1.4 million Mt of CO2e with clean energy and smart energy management, carbon reduction increased 129%. 

Alibaba Net Carbon Emissions and Reductions

Alibaba was also able to decrease its Scope 3 emissions by 400,000 MtCO2e through various measures. These include digital optimization, energy transition in logistics, more energy-efficient data centers, and adoption of low-carbon business traveling.

For instance, logistics subsidiary Cainiao has reduced packaging materials by 184,000 tons in 2023 by recycling used packages. Cainiao urged consumers to reuse cardboard boxes at pick-up points resulting in 23 million boxes recycled at Cainiao Posts.

Alibaba teamed up with Nike to do door-to-door recycling across thirty Cainiao campus stations nationwide in China.  

Combining these efforts with the company’s projects on carbon removal and carbon credits, its Scope 3 carbon intensity dropped by almost 6%. Alibaba focuses on supporting nature-based climate solutions.

The So-called Scope 3+

What makes 2023 a groundbreaking year for the Chinese company is the introduction of its initiative called Scope 3+ results. This new effort goes beyond Scopes 1, 2, and 3, which reduced a total of around 23 million MtCO2e.

Under its so-called Scope 3+, Alibaba introduced a group-level carbon ledger, Carbon88, which encourages consumers to adopt low-carbon behaviors on the company’s platforms. More than 187 million users took part in CO2 emission reduction efforts through the carbon ledger program.  

Carbon88 allows users to show the actions they’re taking to reduce their carbon footprint. These include everything from bringing their own cups to using reusable bags.

Similarly, Amap, Alibaba’s navigation platform, has seen over 30 million people opting for low-carbon travel options like walking. This led to a reduction of 215,000 MtCO2e. Moreover, the company’s food delivery platform, Ele.me, helped save resources by allowing users to opt out of cutlery on over 1.4 billion orders. 

Scope 3+ basically refers to a low-carbon circular digital ecosystem with broader cooperation from stakeholders.

A Green Cloud

Alibaba’s cloud computing subsidiary also significantly contributes to its climate goals. The report said that the proportion of clean electricity used in its self-built data centers in China increased from 21% in 2022 to an impressive 54% in 2023.

This remarkable achievement is due to the improved implementation of energy-saving technologies such as liquid-cooling server technology and power management optimization. As a result, total power usage was down to 1.215 in the period from 1.247 a year earlier. 

Alibaba Cloud’s efforts to replace traditional IT with cleaner and greener cloud computing have boosted corporate users’ efficiency. It also reduced its emissions, avoiding a significant 85% of CO2 emissions, as Carbon Trust reported.

Moreover, the cloud’s AI-driven sustainability platform has assisted thousands of enterprises worldwide in monitoring, analyzing, and optimizing their CO2 emissions. 

Overall, Alibaba Cloud realized over 1 million MtCO2e of emission reduction in the company’s own operations (Scopes 1 & 2) and 0.4 million MtCO2e throughout its value chain (Scope 3).

These results stated in its ESG report emphasize Alibaba’s commitment to environmental responsibility. It sets a shining example for other companies to follow in their quest for a greener future. 

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Germany Multination Thyssenkrupp Wins EU Nod for $2.2B Green Steel Subsidy

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Thyssenkrupp AG got the European Union’s approval for a 2 billion euros, or about $2.3 billion, package of state subsidies from the German government for its proposed green steel production.

Currently, Thyssenkrupp Steel division is responsible for 2.5% of Germany’s total carbon emissions. The leading German metals, engineering, and manufacturing company aims to reduce such footprint by producing climate-friendly steel at their Duisburg site. 

Green Deal is Green Steel 

Big businesses across Europe are turning to governments for large subsidies to construct green production facilities. This is in line with the EU’s “Green Deal” that seeks to take a lead in the clean technology sector. 

The bloc hopes to keep pace with the massive aid by other countries to companies to make their businesses green. And green steel is a key driver of a Net Zero industry in the region. 

The steel industry is raking in hundreds of billions of dollars in revenue annually but at the cost of the planet. The industry accounts for up to 9% of global carbon emissions due to its high reliance on coal to make steel. 

The industry is, in fact, the largest emitting manufacturing sector. Cutting its huge footprint is very expensive but using clean technology to make green steel can help lower the cost. 

Green steel production usually involves hydrogen to purify iron ore pellets and melts it to make steel in electric furnaces. This clean technology basically replaces coal used in powering blast furnaces that releases over one ton of CO2 for every ton of steel. 

ThyssenKrupp Steel has tested the viability of this green steel technology as part of its climate strategy. The German industrial company’s goal is to make steel production carbon-neutral by 2045.  

The firm aims to reduce carbon emissions of steel production across three sources – Scope 1, 2, and 3 – by at least 90% by 2050. In the short term, Thyssenkrupp Steel plans to cut Scope 1 and 2 emissions by 30% by 2030 versus 2018 levels. 

Hydrogen for Green Steel Production

A big part of achieving those goals is the construction of a hydrogen-powered direct reduction (DR) plant at Thyssenkrupp’s Duisburg site. It’s a revolutionary concept with a capacity of 2.5 million metric tons of directly reduced iron (DRI). The company calls it “tkH2Steel”, which can reduce over 3.5 million metric tons of CO2. 

Contrary to conventional blast furnaces, DR plants don’t produce hot metal but solid sponge iron, aka “direct reduced iron”. DRI needs further melting to make high-quality steel. 

Thyssenkrupp Steel has been working on this technology to produce green steel. In March this year, the company awarded a contract worth billions of euros to SMS group, a company from North Rhine-Westphalia, for a direct reduction plant. The project marks one of the world’s largest industrial decarbonization initiatives in the industry. 

The project is a groundbreaking initiative for Germany’s largest steelmaker – replacing carbon-intensive steel production with clean technology using hydrogen. The company can continue to boil steel like in the past using proven processes but use hydrogen instead of coal.

To date, the company’s Duisburg production site emits about 20 million metric tons of CO2 a year with its coal-based hot iron production using blast furnaces. With hydrogen-powered direct reduction plants, Thyssenkrupp Steel can significantly slash its emissions and produce carbon-neutral steel. The giant steelmaker plans to avoid as much as 6 million metric tons of CO2 by 2030.

The 2 billion euros subsidy approved by the EU will help Thyssenkrupp achieve its green steel production targets. 

Funding Steel Decarbonization in Europe

The subsidy package is a combination of direct grants and a conditional payment to support the steelmaker’s decarbonization plan and ramp up its hydrogen uptake. 

The EU and Germany have agreed to give Thyssenkrupp financial aid in June. The funding includes around 1.3 billion euros from the federal government and 700 euros from North Rhine-Westphalia’s state government.

The bloc also approved a separate 850 million euros subsidy in France to help fund ArcelorMittal SA‘s steel decarbonization plans.

In Sweden, a green steel startup secured 190 million euros from private investors to start building its green hydrogen-powered steel plant in Boden.

The target date of Thyssenkrupp’s green steel production at its hydrogen-powered DRI plant is the end of 2026. This groundbreaking project winning over European government support shows a business case for the Green Deal’s investment in clean technology.

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Bill Gates Backs Stealth Startup with $91M for Hydrogen Revolution

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A Denver-based startup, Koloma, received $91 million in funding from Bill Gates and other investors to drill natural hydrogen in the U.S. Midwest, a venture that can ramp up the clean energy revolution. 

The hydrogen startup has plans to avail incentives both from the U.S. Bipartisan Infrastructure Law and the Inflation Reduction Act, particularly the hydrogen production tax credit (PTC).

Natural Hydrogen: The Next Global Gold Rush? 

The knowledge of the existence of naturally occuring hydrogen has been around for centuries but is not well understood. With the recent revelation by Koloma, this could be about to change. 

Natural hydrogen, also called gold or white hydrogen, has made headlines as a potential new renewable energy source. It differs from other types of hydrogen in that it’s a primary source of energy like fossil fuels but carbon-free.

Koloma believes that it can tap into a regenerating supply of underground hydrogen through a process called serpentinization. The process breaks down iron- and magnesium-based minerals under the earth’s surface deep in the seafloor to produce hydrogen-rich fluids and other minerals. 

This process of natural hydrogen production can deliver around 23 million tonnes of H2 each year, Koloma said. This amount is equal to almost a quarter of current total global hydrogen demand. 

The company refers to this regenerative gas geologic hydrogen with clean and environmentally-friendly attributes. Coming from iron-rich source rocks and as a primary energy source, geologic hydrogen requires no external energy and water inputs. It also has a low carbon footprint compared to electrolysis and results in minimal surface disruption. 

Koloma’s Geologic Hydrogen Production

SMR – Steam methane reforming, CCS – Carbon capture and sequestration Source: Koloma website

Highlighting these facts about carbon-free hydrogen production, Koloma’s co-founder and CTO, Tom Darrah, said that:

“It’s [Hydrogen] on every continent… The scale of how much there is, is profound.”

Darrah is an Earth sciences professor and an expert in extracting hydrogen who has 16 patents involving H2 extraction. One of them includes the use of AI-assisted laser imaging and satellites to assess sites potentially storing natural hydrogen.

The hydrogen startup analyzes samples from its Midwestern wells in Darrah’s laboratory at the Ohio State University. The tests will help reveal the sites with the best H2 volume and purity.

Koloma, however, didn’t disclose the exact location of their wells and the dates of their commercialization. 

From Secret Mode to Revolutionary Revelation

Koloma, founded in 2021, has been operating in stealth or secret mode but revealed itself in an interview with Forbes magazine. 

The $91 million investment made Koloma the most-funded company in the space. It got the funds from Bill Gates’ Breakthrough Energy Ventures and other big climate investors Energy Impact Partners, Evōk Innovations, Prelude Ventures, and Piva Capital.

The startup didn’t say how much of the funds came from the Microsoft founder Bill Gates. The billionaire himself is a promoter of hydrogen, believing that it is the ‘Swiss Army knife’ of renewable sources. 

The company’s revelation that there are vast reserves of clean, regenerative geologic hydrogen beneath the earth’s surface can help revolutionize the energy transition. It could have never been more timely as the world tackles the climate crisis. 

Using hydrogen though comes with some challenges because of its flammable nature. But when used in fuel cells, H2 can produce clean energy with only water as a byproduct. 

The gas can be used as a carbon-free fuel for vehicles, power generators, and other industrial applications. In fact, Toyota has plans to sell 200,000 hydrogen-powered vehicles by 2030. 

Koloma believes that geologic hydrogen will be a cheaper and less energy-intensive alternative to other types of hydrogen. Though the hydrogen company didn’t reveal its commercial operations, the startup can earn tens of billions of dollars in revenue if its venture becomes successful.  

The $1 Trillion Market by 2050 

Currently, the global hydrogen market is worth over $120 billion, with 100 million metric tons in annual consumption volume. Industry experts think that naturally-occuring geologic hydrogen can potentially ditch fossil fuels. 

According to Goldman Sachs, the market will more than double to $250 billion by 2030 and worth $1 trillion by 2050. This is crucial as hydrogen is becoming an increasingly important piece of the net zero emissions by 2050 puzzle. 

According to the International Energy Agency, strong hydrogen demand growth and the adoption of cleaner technologies for its production will enable H2 and H2-based fuels to have a significant contribution in its Net Zero Emissions Scenario. 

Emissions Reduction by Mitigation Measure in the Net Zero Scenario, 2021-2050

Source: IEA website

Green hydrogen is dubbed as the energy of the future and it begins this 2023 as subsidies start pouring in. 

In the U.S., the government allocated over $9 billion for clean hydrogen projects in the 2021 Bipartisan Infrastructure Law. Plus, President Biden’s Inflation Reduction Act provides a tax credit of $3/kilo for zero-carbon fuel which geologic hydrogen meets. Koloma will apply for subsidies under both programs. 

The EU’s Carbon Contracts for Difference (CCfD) also subsidizes green hydrogen through its Innovation Fund. The UK also has a similar CfD subsidy scheme for clean hydrogen production. 

Germany, Canada, and India also have their own programs to make hydrogen a viable sector of the clean energy market. 

The Bill Gates-backed startup said it will start commercial operations when demand for hydrogen ramps up. And this seems to be near starting this year. Through its geologic hydrogen production, Koloma sets the stage for a sustainable future where drilling clean hydrogen is as common as drilling dirty fossil fuels.

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Toyota to Sell 200,000 Hydrogen-Powered Vehicles, Targets China & Europe Market

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Toyota announced that it will focus on rolling out hydrogen-powered vehicles in Europe and China with the aim of selling 200,000 units by 2030. 

This move is a shift in Toyota’s focus, which revealed its plans to commercialize its revolutionary solid-state battery by 2027.

Toyota’s Hydrogen Fuel-Cell vs. Solid-State Battery

The Japanese carmaker unveiled last month that they’re determined to be a world leader in battery EV energy consumption. And then they presented their solid-state battery breakthrough just last week. This announcement stole the show as the company gave a sneak peek into its next-gen battery technology. 

But Toyota’s latest plan on selling hydrogen fuel-cell vehicles outside its home market is yet another revelation. 

The largest carmaker by sales has long placed a huge bet on hydrogen fuel cells as an alternative to fossil fuels. A fuel cell vehicle is also using an electric motor like an EV but it gets power from a fuel stack where hydrogen is stored.

However, Toyota sales of its hydrogen-powered vehicles weren’t a big hit. Since it launched its fuel-cell Mirai in 2014, the company has only sold less than 22,000 hydrogen cars. 

The automaker also sold only over 3,900 fuel cell vehicles in 2022, which is so insignificant in relation to its 9.5 million vehicles in global sales. That’s mainly because of the expensive cost of hydrogen and the lack of infrastructure, particularly the hydrogen fueling stations.

So to bring down the costs of fuel-cell vehicles, Toyota will focus on Europe and China markets where hydrogen demand and production is much higher than Japan. By selling more volume, it can cut down costs by almost half, the company said.

Europe and the US have plans to supply 25 million tons of hydrogen annually by the end of the decade. China aims to produce much more, 40 million tons while Japan targets only 3 million tons by 2030.

Fuel Cells Better for Heavy-Use Vehicles

Transitioning to clean energy calls for greener power sources and hydrogen is dubbed as the energy of the future. But this happens if trillions of dollars – $15 trillion – are invested into this green technology by 2050.

Government subsidy programs announced this year will help ensure that the hydrogen industry will become a large-scale renewable power source. 

While Toyota seeks to increase sales of its fuel cell vehicles outside Japan, the giant carmaker can still work with the Japanese government which highly considers hydrogen as an energy-security alternative. The company can supply local governments fuel cell ambulances, delivery and garbage trucks. 

Toyota says fuel cells are better for longer-range, heavy-use vehicles because of their higher energy density. They predict that the global market for fuel cells will increase 15x from 2020 levels to $35 billion by 2030.

Other market estimates are much higher at more than $43 billion by the same year. 

The automaker has set up a dedicated hydrogen-focused division, the Hydrogen Factory, to expand the application of fuel cell technology. It started operation with more than 1,300 staff. 

They will help Toyota forge more partnerships on hydrogen technology such as its deal with Daimler Truck Holding to merge their truck businesses. Other automakers also plan to sell tens of thousands of hydrogen-powered transports. 

Honda Motor aims annual sales of 60,000 fuel cell vehicles in collaboration with General Motors in 2030.

For Toyota, its decades-old knowledge in developing fuel cell technology is an edge but it can’t ignore China’s big potential for producing hydrogen-powered vehicles, too. 

Still, tapping opportunities abroad brings confidence to the company as asserted by its Chief Technology Officer, Hiroki Nakajima, remarking that:

“This may be a strange way of putting it, but 200,000 is not a big number… We believe this number and more can be achieved.”

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Tesla’s $413M Power Move: Megapacks to Revolutionize Massachusetts’ Energy Grid

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Tesla has signed a contract worth $413 million to install its Megapack battery energy storage in two facilities in Massachusetts for a total capacity of 800 MWh. 

Megapack is a large-scale, lithium-based battery energy storage designed by Tesla to boost the stability of power grids and avoid outages. Each unit boasts a storage capacity of over 3 MWh, enough to power 3,600 homes for an hour.

Tesla’s Battery Energy Storage Systems

Though Tesla’s energy storage segment is much smaller than its automotive business, it has been growing massively. After sustaining consistent growth, it has significantly accelerated and expanded rapidly.

According to Tesla, its energy generation and storage revenues went up 148% year-over-year to $1.5 billion in Q1 2023, representing 6.6% of the company’s total revenues. The company also reported that its battery energy storage systems (BESS) deployment was up 360% year-over-year for the same period. It hit a new quarterly record of 3,889 MWh or almost 4 GWh. 

BESS includes Powerwall (residential), Powerpack (businesses), and Megapack (large-scale commercial and utilities projects) deployment. All three energy storage systems use lithium-ion batteries. 

Tesla Battery Energy Storage Deployed (in MWh)

Source: INSIDEEVs (https://insideevs.com)

Such tremendous growth has been particularly attributed to ramping up Tesla’s Megapack production capacity in its recently built 40 GWh Megafactory in California. The company aims to produce 10,000 Megapacks each year in this factory. 

Earlier this year, Tesla also revealed plans to construct another 40 GWh Megafactory in Shanghai, China to meet the robust demand for its energy storage systems. Construction will start later this year.

The demand in the U.S. alone has been rising sharply, with the most recent deal with Massachusetts. 

Under the contract approved by the Massachusetts Energy Siting Facilities Board, Tesla Megapacks will power two battery energy storage facilities in the state with 218 units. The decision will allow the state to meet 80% of its 1 GWh energy storage deployment target by 2025. The two facilities’ locations and their corresponding energy storage deployment are as follows:

Cranberry Point Energy Storage – 150 MW/300 MWh BESS with ancillary facilities in Carver, will serve the New England region.
Medway Grid – 140 Tesla Megapacks on site, with a substation including a 300 MVA transformer

Megapack was launched in 2019 and first used in California with PG&E’s Moss Landing project. The agreement included over 400 Tesla lithium-ion Megapack batteries for a massive energy storage system of up to 1.2 GWh.

Large-Scale Renewable Energy Solutions

The smaller BESS, Powerpacks, was first deployed on the small island of Nantucket in 2019. The island is about 30 miles off the coast of Massachusetts. Tesla built a 6 MW/48 MWh battery energy storage system in Nantucket with 234 Powerpacks. 

The Powerpack storage can power half the homes on the island for up to 8 hours. To date, Tesla has deployed Powerwalls and Powerpacks at more than 50,000 sites worldwide. 

The recent $413 million contract with Massachusetts is by far the largest Megapack project of Tesla, delivering a total of 800 MWh energy storage capacity. The previous large Megapack project was the Victoria Big Battery, a 212-unit, 350 MW system.

More Than Just an Electric Carmaker

The rising demand for Tesla’s Megapacks signals that there’s a big market for grid-scale battery energy storage solutions. In fact, this market is expected to grow at over 24% rate through 2027.

According to research, the market will grow to over $15 billion in 2027 as shown below. 

What drives this growth in grid-scale energy storage systems is the transition away from fossil fuels to renewable energy sources. Power from renewable sources is attached to microgrids and this stored energy will be provided later to homes, businesses, and utilities.

The surge in the use and future demand for renewable energy will further lead to global grid-scale BESS market growth. As per the International Energy Agency’s estimates, renewables will account for over 90% of global electricity capacity expansion from 2022-2027.

With that, growth in energy storage systems should be quicker in areas where renewables are also growing faster than average. For Tesla Energy, that means its battery energy storage solutions like Megapack have a big room for growth.

This business, along with its solar panel installations, is part of Tesla’s quest for sustainability. All of these operations, including manufacturing EVs, generate carbon credits by avoiding carbon emissions. Selling these credits provided Tesla with billions of dollars in revenue.

The company’s clean energy segment, though it’s not comparable yet with its electric car production, will be one of its large revenue streams.

Megapack, in particular, offers a powerful grid-scale energy storage capacity that can be recharged using clean and renewable energy sources. It helps stabilize the local grid, promote sustainable energy infrastructure, and create a source of power that’s safe for the people and the planet. 

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