A billion-dollar bet on RNG

TECH

A billion-dollar bet on RNG

What happened: Toronto’s Woodland Biofuels plans to build the world’s largest carbon-negative renewable natural gas (RNG) plant in Louisiana. The first phase of the $1.8 billion project will focus on RNG for transport, heating and electricity and a second phase will produce carbon-negative hydrogen.

The tech: Renewable natural gas is made from various waste streams like landfills, agriculture, wastewater, food waste and other sources. 

In Woodland’s case, they use a process called gasification where the biomass is burnt in a low oxygen environment. This breaks down the biomass and turns it into a mixture of combustible gases. That mixture is then refined to remove impurities and other gases like CO2, increasing the concentration of methane to a level close to fossil gas.

But how is it carbon negative? 

First, methane emissions that would have happened under typical conditions (for example, agricultural waste might decompose and emit methane) are avoided by converting the biomass to fuel.

Second, Woodland plans to use carbon capture systems to remove CO2 before the refining phase, storing it underground. Woodland says they can deliver up to 283% reduction in emissions vs traditional fuels. 

Yes, but: Like most things in climate, RNG has some big caveats around its role in the energy transition and it’s not always a clear-cut winner for the climate.

• Is the biomass is actual waste, or purpose-grown crops?

• How do underlying assumptions change over time (e.g. evolving practices for methane in landfills)?

• What is the risk of methane leaks along the value chain?

Keys to success: Woodland has already proven the tech at a demonstration plant in Sarnia, Ontario. But the company opted to build in the U.S. to take advantage of US$430M in incentives, existing chemicals infrastructure and talent, access to feedstocks, and suitable geology for carbon storage.

Access to carbon storage may have been a critical factor - Ontario is still rolling out its framework for commercial scale CCS.

The bottom line: Woodland’s ambitious project is a major step for scaling up low-carbon fuels. It also shows the value in getting regulatory frameworks in place for emerging sectors like carbon storage. The role of RNG as a climate solution likely won’t be black or white, but come down to project specifics and the role it plays in specific energy systems.

CLIMATE CAPITAL

🔋 Electra Battery Materials (Toronto, ON) secured a $27 million investment from a strategic battery materials investor to support construction of its cobalt refinery. The plant will be the first of its kind in North America. Electra also launched a joint venture with Indigenous-owned Three Fires Group to recycle lithium-ion batteries.

💸 The B.C. Centre for Innovation and Clean Energy announced $1.25 million in non-dilutive investments in Unilia Fuel Cells, a developer of hydrogen fuel cell trucks, Expander Technologies, a low-carbon biofuels company, and InnoCast, who is developing low-carbon concrete using by-products from hydrogen production.

🧱 Giatec Scientific (Ottawa, ON) will receive $17.5 million from the Strategic Innovation Fund to develop a smart operating system for industry. Giatec offers sensors and software to help construction firms optimize their concrete use.

🤝 ClimateDoor (Vancouver, BC), a climate venture builder, acquired climate marketing firm Cleanramp. The acquisition adds to ClimateDoor’s suite of solutions.

💰 Pangaea Ventures closed a $115 million impact fund to back climate hardtech ventures. Pangaea has already allocated half the fund, including an investment in Vancouver mining tech company pH7 Technologies.

💰 Brookfield Asset Management raised $2.4 billion for the Catalytic Transition Fund which it announced at COP28. The fund is anchored by a $1 billion investment from UAE-based climate fund ALTERRA.

MILESTONES & PRODUCT

🏅 Timezyx, a startup developing digital twin technology to help manage infrastructure climate risk, took home first prize at the New Ventures BC Competition. SkyAcres (indoor farming) and VulcanX (low-carbon hydrogen) also won prizes.

🛍️ Shopify launched Carbon Commerce, an ecommerce offering for carbon credit sellers. The platform aims to simplify the selling process with one-off sales, pre-purchases and long term offtakes. 

💨 CO2 Lock will partner with Ionada Carbon Solutions to combine their mineralization storage solution with Ionada’s carbon capture technology. 

💵 Exterra Carbon Solutions secured a pre-purchase of 1,000 tonnes of carbon from Frontier. Exterra captures CO2 using mineral waste.

⛏️ The Saskatchewan Research Council is building the first commercial facility in North America to make neodymium praseodymium, a key mineral for EVs.

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IN THE NEWS

Canada’s emissions dropped just 1% in 2023 according to early estimates from the Canadian Climate Institute. That’s 8% below 2005 levels - a long way off from the 40% below 2005 that Canada needs to hit by 2030. Oil & gas and aviation offset hard-won progress made in other sectors while emissions from electricity and buildings dropped by ~6% each.

B.C. received proposals for 3x more energy than it needs in a recent call for clean energy generation. Hydro makes up the bulk of power projects in the province, but in this call 70% of projects are for wind farms and 20% are for solar. The province also launched a new program to provide rebates and energy coaching for whole home retrofits aimed at reducing energy use. Electricity demand is expected to increase 15% in B.C. by 2030.

The oil & gas industry is unlikely to reclaim many abandoned oil wells, according to Alberta’s energy minister, and will need to use public funding to fill the gap. Liabilities for abandoned wells are estimated to be between $59 billion and $260 billion. The province recently returned $137 million in federal funding earmarked for well reclamation after letting the clock run out.

Alberta wants to keep old coal-to-gas plants running. The province’s energy operator is proposing long-term contracts for gas power plants to secure “strategic reserves” of energy and avoid blackouts. Alberta has an open energy market, buying power from whoever offers the lowest prices. The contracts would change that model, scaring off investors according to some stakeholders.

The feds will provide a $500 million bailout for Nova Scotia’s electric utility. The utility is in the hole because of energy shortages from the Muskrat Falls hydro project in Labrador. Nova Scotia Power has been using pricier (and more polluting) fuels to close the gap and would need to raise rates by 19% to recover the costs. 

BIG PICTURE

India secured $386B in financing to decarbonize and double clean energy capacity.

Three Mile Island is getting a new lease on life to power Microsoft’s servers.

China adds steel, aluminum and cement to their mandatory carbon market

Renewables now make up 30% of global electricity.

EV batteries are likely to outlive the vehicles they’re in.

The U.S. is putting up $1.8B for direct air carbon capture projects.

Microsoft, Blackrock teamed up to raise a $100B for AI energy infrastructure.

RMI, Deep Science Ventures and Builders Vision launched Mark1, a developer-as-a-service for first-of-a-kind climate projects.

COMMUNITY

🚀 Wind Energy Circular Innovation Challenge: Recyc-Quebec and Cycle Momentum are seeking projects that address the challenges in managing materials from the wind energy sector through a circular economy lens. Apply by October 29th.

🗓️ Nature Based Carbon Removal: Hosted by Climate North, this event explores how policy and entrepreneurship work together to drawdown emissions from the atmosphere. Featuring Carbon Removal Canada, Taking Root, and MyHEAT. October 1st, Toronto.

➡️ Discover more climate events.

💻️ Coastal Carbon is hiring an AI Engineer to build, scale and train large machine learning models for the natural world.

➡️ Find more open roles.