🌎 Ammonia goes from fertilizer to fuel #180

Happy Tuesday!

From farms to fuel tanks, ammonia is evolving from fertilizer to fuel as a versatile vessel for decarbonization. We break down the latest announcements, from new ships and plants to consolidation plays.

In other news, Hertz shifts gears on its EV strategy, Kerry steps down from his climate envoy post, and AI helps discover promising new battery materials.

In deals, $90m for animal-free dairy, $50m for fusion, and $30m for resi solar and storage.

Want more deals? Join us for a webinar Jan 25th on Sightline Climate’s 2023 investment trends, insights, and discussion. We’re also hiring for an Editor at Sightline Climate, apply here.

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Ammonia mania

Ammonia, the foundation for today’s nitrogen fertilizers, is gaining steam as a multimodal decarbonization pathway. The last few months have brought a slew of major announcements signaling ammonia’s potential future as a low-carbon fuel.

Ship Orders

Yara Eyde, a joint venture between Yara Clean Ammonia and North Sea Container Line, aims to be the world’s first clean ammonia-powered container ship.
Fortescue unveiled a green ammonia dual-fuel ship at COP.
Korean shipbuilders have received preliminary orders for up to 15 very large ammonia carriers (VLACs), including from Maersk Tankers (for 4 ships), Naftomar (for 4 ships), and Samsung Heavy Industries (for 2 ships).

New Plants

8 Rivers Capital announced an ammonia production facility to produce 880,000 tons of clean ammonia using oxy combustion and their novel reformation technology to capture the CO2.
Saudi Arabian ACWA Power outlined a $4bn green hydrogen and ammonia facility in Egypt that could produce up to 600,000 tons of green ammonia per year.

M&A

Abu Dhabi National Oil Company (ADNOC) bought Fertiglobe for $3.6bn, the world’s largest maritime ammonia exporter, as part of its national green hydrogen strategy.

So what’s all the ammonia mania about? Clean hydrogen carrying capacity. Unlike hydrogen, ammonia stores and transports as easily as propane, enabling global clean hydrogen markets alongside other low-carbon uses.

Growing concerns today: Today, most ammonia is used for fertilizer. 70% of production is compounded into molecules that enable almost all crop production. The current Haber Bosch process relies on fossil fuels (~ 70% natural gas, 30% coal) and emits 2.4 tons of CO2 per ton of production—accounting for 1.8% of global emissions.

A fertile future tomorrow: But if and when hydrogen cleans up its act, ammonia’s use cases within the green economy are set to bloom.

Ammonia demand for fertilizer and other existing uses by IEA scenario (Source: IEA)

Shipping fuel: Maritime shipping, which accounts for 3% of CO2 emissions, is betting big on ammonia. Cargo ships are expected to run on majority ammonia fuels by 2050.
Energy storage: Ammonia stores at easily-achievable pressures and temperatures and benefits from existing pipeline networks, tanks, tankers and ships.
Coal co-firing: Ammonia can replace a percentage of fuel in coal plants, lowering their carbon emissions.
Direct use in turbines: Japanese firm IHI and GE are retrofitting liquid natural gas power plant turbines to run on ammonia.
Hydrogen cracking: Though the technology is nascent, green ammonia can be “cracked” back into hydrogen to be used as clean fuel. Air Liquide is building a hydrogen cracking pilot plant in Antwerp. Startup Amogy converts ammonia to hydrogen onboard fuel cell-powered vehicles.

Of course, beyond ammonia innovation, the world will still need fertilizer. The nitrogenous fertilizer market rose 12 percent in 2021 to $193B and is expected to reach $240B by 2030.

It ain’t all roses

But if we don’t get clean ammonia right, there’s no guarantee of positive environmental impact. Princeton scientists recently released a study warning against the perils of poor ammonia management:

Incomplete combustion in ammonia production releases nitrous oxide, a greenhouse gas with 300X the warming potential of CO2. Nitrous oxide also increases smog and acid rain levels.
Coal co-firing is also problematic. A 20% coal co-firing rate emits 5X the greenhouse gas needed to reach IEA’s 2030 net zero scenario.

Also, Ammonia’s high toxicity has led to occupational hazard concerns for seafarers who would face prolonged exposure onboard ammonia-powered vessels and already experience dangerous working conditions.

Emerging technologies can turn nitrous oxides back into nitrogen, but ammonia needs care and attention to stay clean and keep from lengthening the life of existing fossil fuel assets.

Deals of the Week (1/8-1/14)

Late-Stage / Growth

🥩 Perfect Day, a Berkeley, CA-based animal-free dairy developer, raised $90m in Series D funding.

⚡ Tokamak Energy, an Abingdon, UK-based tokamak fusion energy developer, raised $50m in Series C funding.

☀️ Soly Energy, a Groningen, Netherlands-based residential solar and energy storage installation platform, raised €30m ($33m) in Growth funding from ArcTern Ventures, Fifth Wall, Shell Ventures, and ABP.

🌾 FA Bio, a Harpenden, UK-based sustainable agriculture bio-products developer, raised £5.3m ($6.7m) in Series B funding from Clean Growth Fund, Pymwymic, and Ship2B Ventures.

Early-Stage

🚗 Recurrent, a Seattle, WA-based used EV car reports platform, raised $16m in Series A funding from ArcTern Ventures, Automotive Ventures, Goodyear Ventures, Pioneer Square Labs, and Wireframe Ventures.

🥩 Sqim, a Varese, Italy-based mycelium-based technologies developer, raised €11m ($12m) in funding from CDP Venture Capital, ECBF VC, Kering Ventures, and Progress Tech Transfer.

🥩 Mush Foods, a Tel Aviv, Israel-based blended meats developer, raised $6.2m in Seed funding from Viola Ventures, Siddhi Capital, and TKH.

💨 Parallel Carbon, a Manchester, UK-based carbon capture with hydrogen production developer, raised $3.6m in Seed funding from Aramco Ventures, Counteract, Axon Partners, DNX Ventures, Voyagers, and other investors.

⚡ tibo energy, a Eindhoven, Netherlands-based smart energy management system developer, raised €3m ($3.3m) in Seed funding from SET Ventures and Speedinvest.

🔋 Rincell Corporation, a San Francisco, CA-based advanced battery cell developer, raised $1.2m in Seed funding from NextGen Battery Chem Ventures.

🏠 Furbnow, a Birmingham, UK-based energy efficiency and retrofit platform, raised £1.0m ($1.2m) in Pre-Seed funding from SFC Capital and Norrsken Accelerator.

⚡ FLEXeCharge, a Copenhagen, Denmark-based EV load and management solutions developer, raised an undisclosed amount in Seed funding from Greencode Ventures, Link Capital, and Vireo Ventures.

💨 Octavia Carbon, a Nairobi, Kenya-based direct air carbon capture developer, raised an undisclosed amount in Seed funding from Renew Capital.

Other

🔋 Northvolt, a Stockholm, Sweden-based lithium-ion battery manufacturer, raised €902m ($986m) in Grant and Debt funding from The European Commission.

🔋 NineDot Energy, a Brooklyn, NY-based energy storage developer, raised $225m in funding from Manulife Investment Management and Carlyle.

🔋 Cactos, a Helsinki, Finland-based repurposed energy storage systems developer, raised €26m ($28m) in funding from Finnish Climate Fund and OP Finland Infrastructure.

🥩 eniferBio, an Espoo, Finland-based mycoprotein-based protein developer, raised €12m ($13.1m) in Grant funding from NextGenerationEU.

🌬 Aerones, a Riga, Latvia-based robotics for wind turbine maintenance service provider, raised €4.4m ($4.8m) in Grant funding from the EU’s Innovation Fund.

Exits

⚡ Zonduurzaam, a Deventer, Netherlands-based residential solar installer, was acquired by 1Komma5° for an undisclosed amount.

🌱 SupplyShift, a Santa Cruz, CA-based supply chain emission reduction platform, was acquired by Sphera for an undisclosed amount.

New Funds

Carbon13, a Cambridge, UK-based investment firm, announced the first close of its €30m ($33M) fund that invests in early-stage climate companies.

Stepchange, a Seattle, WA-based investment firm, announced the launch of their new fund that invests in software-driven climate solutions.

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In the News

Hertz announced plans to sell a third of its U.S. EV fleet and reinvest in gasoline cars, citing low demand and high repair costs for EVs. CEO Stephen Scherr acknowledged that EVs will become the best rental cars, but they “may have been ahead of ourselves in the context of how quickly that will happen”.

US Climate Envoy John Kerry steps down to support Biden on re-election campaign, saying Biden’s re-election was “single biggest” factor for US climate policy. The former Secretary of State brought gravitas, political experience, and influence to a position typically filled by diplomats.

U.S. emissions decreased by 1.9% from 2022 levels, despite the economy expanding by 2.4%. The decline, primarily driven by reduced coal use in the power sector and lower energy use in buildings, was the first time since COVID-19 that emissions have decreased while the economy has grown.

Microsoft teamed up with Pacific Northwest National Laboratory (PNNL) to unlock new battery materials with AI. The Azure Quantum Elements platform analyzed over 32 million materials to identify 18 top candidates, including a lithium-sodium material promising to reduce lithium usage in batteries by 70%.

BYD began construction of the largest 30 GWh sodium-ion battery facility for small EVs in Xuzhou, China. This follows several Chinese automakers' increased interest in sodium-ion batteries since CATL's 2021 reveal.

Northvolt received $986m in state aid from Germany to build an EV battery plant in Heide, Germany, a decision influenced by matching EU subsidies that prevented a relocation to the U.S. (and its juicy IRA incentives). The plant, with a 60 gigawatt-hour annual capacity, is set to start production in 2026 and reach full capacity by 2029. The state aid package marks the first time the EU has allowed individual state aid to match IRA subsidies.

Uranium prices surged to a 16-year high, as Kazatomprom, the world's largest uranium producer responsible for over a fifth of global output, cited sulphuric acid shortages impacting output. Meanwhile, nuclear demand heightened with the UK Government laying out its plan to quadruple nuclear power by 2050 to 24GW and China approving construction for four new reactors.

Hawaii replaced its final coal-powered facility with a 565 MWh battery. The Kapolei project is equipped with 158 Tesla Megapacks and replaces two critical functions of the former coal plant: providing immediate power on demand (capacity) and ensuring grid stability (grid services).

EPA announced $1bn to replace diesel buses with electric and low-emission buses, fueled by the Bipartisan Infrastructure Law's $5bn allocation for cleaner school buses. In the same week, Martinsville, Texas became the first district in the state to fully electrify their school bus fleet.

UK MP Chris Skidmore resigns over the Government issuing new oil and gas licenses and failing to deliver on their net zero strategy. In a sign climate issues aren't just a left wing concern, the MP stated: “There is now no economy without a green economy… The choice before us is whether to invest in the industries of the future, or to be tied to the industries of the past.”

O&G consolidations keep flowing. Chesapeake Energy merged with Southwestern for $7.4bn to become the largest natural gas producer in the U.S.

Pop-up

CES 2024 featuring Transparent TVs, AI cat flaps, and EVs, EVs, EVs everywhere.

An ‘Oppenheimer’-style feature on Fusion ignition.

Cleantech Group releases their Global Cleantech 100.

Kim unpacks 2023’s climate tech investment trends on Catalyst.

Most startups fail, including these 5 cleantech startups that didn’t make it to 2024.

BCG survey finds consumers are willing to pay for net zero…especially in China.

The inconvenient truth – clean energy requires trade with China.

Our favorite data vis wizard Hannah Ritchie’s new book is Not the end of the world.

Britain is now the world’s fastest-growing wine region.

A cool $500M Stanley Cup, icing down to save the glaciers.

Wildfire smoke is killing killer whales.

Opportunities & Events

💡 IndieBio NYC: Apply to IndieBio NY by Jan 19th to join their upcoming Spring 2024 cohort, and receive support for your early stage biotech startup.

📅 Sightline Climate: Investment Trends 2023 Webinar: Join us on Jan 25th to hear about Sightline Climate's Investment Trends 2023 analysis, insights, and predictions for the year ahead.

💡 NASA MSI Incubator: Apply to NASA’s Wildfire Climate Tech Challenge by Feb 2nd to receive up to $100,000 for your innovative solutions for wildfire prevention.

📅 Climate Career Meetup: Attend MCJ and Climate People’s monthly career advancement meetup on Feb 14th to learn tips and tricks of advancing your career within climate tech.

💡 Venture for Climate Tech: Apply to the fourth cohort of Venture for Climate Tech by Mar 1st to receive customized support, best-practices programming, and up to $50,000 in funding for your startup. Attend info sessions on Jan 17th, 31st, and throughout February.

📅 Distributech: Explore the latest in transmission and distribution, energy efficiency, demand response, and DERs from Feb 27-29 in Orlando, Florida.

💡 Startups For Sustainable Semiconductors: Apply to the Startups for Sustainable Semiconductors initiative by Feb 28th to receive mentorship and the opportunity to pitch to leaders within the semiconductor industry.