🌎 Brookfield's Infinium deal fuels e-SAF momentum #214

Happy Monday!

This week, we’re diving into the new Brookfield Asset Management investment in e-fuels startup Infinium, a deal that’s showing how e-SAF projects are taking off.

In other news, Google and DAC startup Holocene announced a new deal, enhanced geothermal developer Fervo reported exciting new technical findings, and climate change made it to the US presidential debate stage.

In deals, $1bn for e-SAFs, $100m for geothermal, and $62m for biogas power.

And will we see you at New York Climate Week next week? Check out our CTVC X NYCW Event Tracker if you're attending to get a lay of the land.

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E-SAFs find new runway

Green hydrogen-based e-SAF startup Infinium is getting ready for takeoff with a $1.1bn investment from Brookfield Asset Management, announced last week. The major new deal, coming from the heavyweight infrastructure asset manager, signals that SAFs are getting cleared for takeoff and moving from FOAK to NOAK.

What happened?

Brookfield is one of the biggest investors in climate tech infra today, and this investment comes from its first $15bn decarbonization-focused fund, the Brookfield Global Transition Fund ("BGTF I"). Its thesis revolves around decarbonizing carbon-intensive businesses and investing in sustainable solutions. The terms of the deal include:

Brookfield investing over $200m in Infinium at the top-co level, including direct funds for Project Roadrunner
Brookfield committing up to an additional $850 million for future Infinium projects globally
Brookfield serving as lead in Infinium’s Series C Preferred Stock offering

The $850m follow-on differs from previous ones in the BGTF I portfolio, like the $300m investment in two “near-term” projects from carbon capture and storage startup Entropy. But it falls in line with Brookfield’s $500m+ investment in LanzaJet in 2022, which enabled the SAF startup to construct and operate new projects, offering an extra $50m for corporate development and a possible additional $500m if projects meet certain milestones.

*Project Roadrunner. Image via Infinium.*

To get this Brookfield investment, Infinium has checked all the project finance boxes, so to speak. This shows that e-fuels are increasingly viable for PF investors, who look for projects with zero commercial, operating, technical and even manufacturing risks. Infinium already built its FOAK in the US (“Project Pathfinder” in Corpus Christi, TX, which it says is the world’s first drop-in eFuels facility) and several others around the globe.

In the SAFs space, e-SAFs are not the only existing production pathway, as we’ve previously covered. SAFs have been a relatively turbulent market, because airlines have sky-high sustainability goals but limited decarbonization options — and SAFs’ high price point compared to conventional jet fuel has deterred adoption. E-SAFs in particular have high environmental benefits and are scalable, but still rely upon typically pricey early-stage inputs like green hydrogen and captured carbon.

However, Liz Myers, Infinium’s VP of Business Development, told us: “We see a strong path to reduced costs for eFuels in the future as production of this new class of fuels scales globally. Market factors are also expected to contribute to cost reduction as renewable energy costs continue to improve in more locations globally. We also expect efficiency gains and continuous learning from deploying clean hydrogen facilities broadly.”

Myers said that Infinium targets projects in areas near both renewable power sources and waste CO2, and Roadrunner’s planned Texas location can leverage regional wind and solar for its high energy needs, and get cheap(er) CO2 from refineries (Roadrunner’s CO2 is coming from Permian Basin-based gas processor Kinetik). And while Infinium has projects around the world, Myers added that, “Our US-based plants have the opportunity to leverage incentives that came out of the Inflation Reduction Act, including the hydrogen production tax credit and the clean fuel production tax credit, among others.”

Plus, Infinium already has offtake agreements in place — critical for accessing project finance like this — including a recent one with American Airlines, supported by Citi and equity from Breakthrough Energy Catalyst.

Key takeaways

E-fuels are jetting ahead. As a SAF production pathway, e-fuels are an expensive but scalable option. In the US, there are few incentives to specifically encourage them over cheaper types of SAFs, like biofuels. But large-scale projects like Roadrunner finally starting to reach the later stages of development show that this technology is reaching technical maturity, and the deal’s terms, with its extension for future facilities, are a particularly strong endorsement.
Tax credit where it’s due. Still, the IRA has offered strong incentives for carbon capture (45Q), hydrogen production (45V), and sustainable fuels production overall, which may contribute to projects like Roadrunner and other e-fuel player Twelve’s facility in Washington. Blending tax credits and other types of climate capital can make FOAK projects like these more viable.
Project finance for NOAKs. This investment showcases the scalability of climate tech companies as they progress from FOAK (First-of-a-Kind) to NOAK (Nth-of-a-Kind) projects Acceptance into the mature infrastructure market takes time, but when it happens, it enables the rapid and massive scale that wind, solar, and batteries, who were FOAKs 15 years ago, experienced. Infra leaders like Brookfield think in billions, not millions, and the cost of their capital is a fraction of VC.

Deals of the Week (9/9 - 9/15)

Late-Stage / Growth

⚡ Infinium, a Sacramento, CA-based e-fuels project developer, raised $1.1bn in funding from Brookfield.

🥩 Formo, a Berlin, Germany-based alternative cheese manufacturer, raised $61m in Series B funding from EQT Ventures, Elevat3 Capital, FoodLabs, Happiness Capital, Indiposa Investments, and others.

✈️ ZeroAvia, a Hollister, CA-based electric plane developer, raised an additional $34m in Series C funding from Scottish National Investment Bank, American Airlines, IAG, and ITOCHU Corporation.

⚡ Elum Energy, a Paris, France-based energy management system platform, raised $14m in Series B funding from Energize Capital, Alter Equity, and Cota Capital.

Early-Stage

⚡ Reverion, a Munich, Germany-based biogas power plants developer, raised $62m in Series A funding from Energy Impact Partners, Doral Energy-Tech Ventures, European Innovation Council, Extantia, Green Generation Fund and UVC Partners.

🧪 Abolis, a Evry, France-based sustainable, tailor-made bio-based industrial solutions platform, raised $39m in funding from BOLD, Evonik Venture Capital, DeepTech & Climate Fonds, Clay Capital, ICOS Capital, and other investors.

⚡ Battolyser Systems, a Schiedam, Netherlands-based integrated battery and electrolyzer manufacturer, raised $33m in Series A funding from Global Cleantech Capital, Innovation Industries, and Invest-NL.

⚡ Fuse Energy Technologies, a San Leandro, CA-based Magnetized-Liner inertial fusion (MagLIF) technology developer, raised $32m in funding from Buckley Ventures, Tamarack Global, Mantis, and Bracket Capital.

🥩 Novameat, a Barcelona, Spain-based 3D-printed plant-based meat producer, raised $19m in Series A funding from Forbion, Sofinnova Partners, Praesidium, Rubio Impact Ventures, and Unovis Asset Management.

🔋 Allegro Energy, a Newcastle, Australia-based redox energy storage developer, raised $12m in Series A funding from Origin Energy, Melt Ventures and Impact Ventures.

⚡ tem., a London, UK-based clean energy marketplace, raised $16m in Series A funding from Atomico, AlbionVC, and Revent.

💧 Puraffinity, a London, England-based smart materials for wastewater removal service provider, raised $9m in Series A funding from BGF, HG Ventures, Kindred Ventures, Octopus Ventures, Universal Materials Incubator Co, and Verve Ventures.

⚡ OpConnect, a Tigard, OR-based EV charging service, raised $8m in Series A funding from The 22 Fund, Community Development Venture Capital Alliance, E8 Angels, Portland Seed Fund, and Reinventure Capital.

☔ Reask, a Sydney, Australia-based climate risk modeling tools platform, raised $7m in Seed funding from Collaborative Fund, Mastry Ventures, Macdoch Ventures, SV Angel, and Tencent.

🔋 Clean Electric, a Pune, India-based energy storage solutions service provider, raised $6m in Series A funding from Info Edge, Pi Ventures, Kalaari Capital, and Lok Capital.

🥩 Standing Ovation, a Paris, France-based vegan cheese developer, raised $4m in Series A funding from Astanor Ventures, Bel Group, Big Idea Ventures, Bpifrance, and Seventure Partners.

⚡ Ogre AI, a Bucharest, Romania-based energy management system software platform, raised $3m in Seed funding from Verbund X Ventures, Early Game Ventures, MMC VC Fund, Sofia Angels Ventures, and Soulmates Ventures.

📦 Dharaksha Ecosolutions, a New Delhi, India-based biodegradable packaging material manufacturer, raised $3m in Seed funding from Avaana Capital and US India EV Angels.

💨 Brineworks, an Amsterdam, Netherlands-based ocean-based carbon removal technology developer, raised $2m in Pre-Seed funding from Pale Blue Dot.

Other

💨 1PointFive, a Houston, TX-based Direct Air Capture (DAC) developer, was awarded up to $500m in Grant funding from the US Department of Energy’s Office of Clean Energy Demonstrations.

⚡ Fervo Energy, a Houston, TX-based geothermal project developer, raised $100m in Debt funding from X-Caliber Rural Capital.

Exits

🏠 Planon, a Gelderland, Netherlands-based sustainable building management software platform, was acquired by Schneider Electric for an undisclosed amount.

💧 Water Foundry, a Denver, CO-based water quality consulting services provider, was acquired by Earth Finance for an undisclosed amount.

New Funds

Five Point Energy, a Houston, TX-based investment firm, held a $1.4bn final close of its fourth sustainable infrastructure fund.

Energy Impact Partners, a New York, NY-based investment firm, raised $1bn for its latest flagship fund.

The Royal Academy of Engineering, a London, UK-based organization, announced a $196m fellowship fund that invests in UK-based climate innovators.

AENU, a Berlin, Germany-based investment firm, held a $190m final close of its fund that invests primarily in Seed-stage climate tech companies.

WIND, a Paris, France-based investment firm, raised $33m for its second fund from the European Investment Fund (EIF).

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In the News

Google announced a $10m deal with direct air capture (DAC) startup Holocene, to offtake CO2 at the lowest price on record of $100/ton. Google will pay Holocene for its carbon removal credits today, rather than in 2030, the earliest target date for delivery. Holocene is expected to produce 100,000 tons of CO2 by the early 2030s, which is still a ways away.

Enhanced geothermal developer Fervo Energy reported exceptional results in its Utah project, which came in at a 100% well drilling success rate and 18% under budget. Similarly, Forge, deploying projects very close to Fervo, simulated seven new stages similar to the type of simulation Fervo has been using. These promising success stories provide positive signals for clean, firm baseload power coming to market in the coming years.

Similarly, approximately one in four recipients of U.S. battery grants have returned the funds, citing challenges in meeting project timelines and cost requirements. This development reflects the broader difficulties in scaling domestic battery manufacturing, a key priority of the Biden administration’s clean energy agenda.

In nuclear news, South Korea announced the approval of two new nuclear reactors, continuing its trend of global leadership in the space. Over in Europe, Poland announced a $15.6bn investment to develop the country’s first nuclear power plant. Meanwhile, a new report from the US DOE estimated that converting existing coal and nuclear plants could enable the construction of 269GW of new nuclear reactors, significantly expanding the current nuclear capacity.

In the recent US presidential debate, former President Donald Trump and Vice President Kamala Harris clashed over energy policies. Trump criticized Harris’s clean energy agenda, arguing it could harm economic growth, while Harris defended the administration’s climate initiatives, highlighting a 40% reduction in emissions since 2005 — showing that climate could be a defining issue of this election cycle.

Recent reports from the EU, China, and the U.S. reveal a global energy transition marked by significant yet uneven progress and ongoing challenges. The European Commission’s latest report highlights the EU’s advancements in renewables, while calling for faster infrastructure development to meet 2030 targets. China’s sharp reduction in new coal plant approvals demonstrates a strategic pivot towards renewables, though it raises concerns about energy grid stability. Meanwhile, the US struggles to reconcile its reliance on natural gas with increasing pressure for cleaner energy.

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Opportunities & Events

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📅 Tough Tech Week: RSVP to attend a series of events hosted by The Engine from October 7-11th to connect with startups, investors, researchers, and corporate leaders in the transformational science and engineering venture ecosystem.

💡 Brains Research Accelerator: Apply to be a part of the Brains Research Accelerator by October 21st for mentorship and support in pursuing your pre-commercial climate solutions that don’t fit within an academic lab, but are too research-intensive for a startup.

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