Trafigura-Backed Startup Seeks $240 Million for Green Fuel Plan

Hy2gen AG, a German startup partly owned by oil trading giant Trafigura Group, aims to raise at least 200 million euros ($240 million) this year to launch the construction of six plants that will produce renewable aviation and marine fuels.

Projects to make green ammonia and other so-called e-fuels with clean hydrogen are rising in Europe and around the world as regulators, investors and consumers push airlines, shippers and other transportation companies to reduce carbon emissions over growing concerns about global warming.

Hy2gen has hired Nomura Greentech as a financial adviser with the view to complete its capital increase in the fourth quarter, Chief Executive Officer Cyril Dufau-Sansot said in an interview Thursday. The funds will allow the company to retain a majority stake in six projects for which final investment decisions are planned in late 2021 and early 2022, he said.

“We’re looking for a combination of financial and strategic investors” to take a minority stake in Hy2gen, said Dufau-Sansot, who co-founded the company in 2017. Investors might include engineering groups, independent power producers and energy majors which would bring their know-how to the company, he said.

The six plants under development in Germany, Norway, France and Canada will require an overall investment of about 1.5 billion euros, according to the CEO. They will have a capacity of 1 gigawatt of electrolizers to produce clean hydrogen, and to transform it into e-fuels for shipping and commercial planes.

Demand for sustainable aviation fuels, which are much more expensive than fossil-fuel jet, is set to grow in the coming years, with several countries such as France having passed legislation calling for aircraft to use a rising proportion of renewable jet fuel.

Outlook for Sustainable Aviation Fuel Demand by Region

Trafigura-Backed Startup Seeks $240 Million for Green Fuel Plan

Trafigura recently urged the International Maritime Organization to act quickly developing regulations to cut carbon emissions in the shipping industry.

Green ammonia could be used as a shipping fuel from the middle of the decade, Dufau-Sansot said, as the infrastructure to liquefy it and transport it around the world at large scale already exists.

Hy2gen, which is poised to start the construction of a green hydrogen plant in Southeastern France, has a pipeline of more than 10 gigawatts of e-fuel projects to be developed by 2030, the CEO added.

“We want to build a global distribution network of green ammonia with Trafigura on the main maritime routes,” Dufau-Sansot said. “With a project pipeline of more than 10 gigawatts, we’ll need more capital increases in the future.”

©2021 Bloomberg L.P.

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