Emvolon, a biomethanol startup, signs financing and purchasing deals with Freepoint

Emvolon, a biomethanol startup, has signed a 7-year agreement?under the terms of which Freepoint Commodities is given a first purchase option on liquid fuels as well as a right of first refusal to invest in Emvolon's projects.

Emvolon valued the purchase option at $450 Million.

Emvolon could benefit from the deal by overcoming one of its biggest challenges in alternative fuel projects. Investors and financiers are reluctant to bet on new technologies, as they do not know if there will be a market for them.

Freepoint in Stamford (Connecticut) has a guaranteed and preferential supply of the commodity, which is expected to be a key component of the decarbonization process for the shipping, aviation, and other industries that are heavily polluting.

Emvolon's model is to repurpose car engines into biomethanol and produce it at sites that generate methane from waste. These include landfills, agricultural waste processors, and fossil fuel production facilities. It claims this is "more cost-effective" than building large chemical factories.

The adoption of low-carbon, wood-fiber methanol is slower than anticipated due to the high cost of supplies and regulatory uncertainty. SunGas Renewables was forced to abandon a low-carbon, wood-fiber methanol plant in Louisiana earlier this year. SunGas cited the lack of clarity regarding financing.

Emvolon Chief Executive Officer Emmanuel Kasseris said in an interview that placing?production near the feedstock – waste gas – helps reduce transportation costs and other logistic costs.

Kasseris stated that "a lot of feedstock in the United States is wasted because there's no way to get it into chemical plants." "We solve this problem by bringing the production directly to the feedstock instead of having to aggregate it and transport it."

Kasseris said that Emvolon’s first production site is expected to start producing in the first quarter of next year. Production will then scale up to 4,000 to 5,000 metric tonnes per year.

Kasseris stated that the company plans to increase its total production to 300,000 tonnes annually by increasing output at a Montauk Renewables plant in Humble (Texas) and opening additional sites. (Reporting and editing by Cynthia Osterman in New York, Shariq Khan)

(source: Reuters)