Microbial decomposition of organic matter in the absence of oxygen for the production of biogas, a roughly 50-50 mixture of carbon dioxide and methane.
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Over the past decades, the alternative fuels industry has significantly evolved from its early days of first-generation ethanol and FAME biodiesel. The industry now comprises a wide variety of feedstocks and an equally diverse set of conversion technologies producing a myriad of fuels. Understanding this complex and evolving landscape is key to identifying unique opportunities both near- and long-term. To identify those opportunities, we analyze each alternative fuel’s pathway in terms of its performance and potential. Given the numerous combinations of feedstock, conversion technology, and fuel, assessing each pathway individually reveals the nuanced differences that must be taken into consideration when strategically entering the alternative fuel industry.
With several of the world’s largest economies and corporations making significant commitments toward decarbonization, a new era of innovation is underway. Interest from corporate venture capitalists (CVC) — among other innovators and venture capitalists — is causing a boom in the development of and investment in transformative technologies.
Being tied to a larger corporation, CVCs prioritize broader corporate business strategy as a metric for success in additional to traditional ROI. While oil and gas CVCs typically prefer later rounds such as a Series C for adoption of more mature technologies, these groups are now pursuing smaller tickets in earlier rounds to nurture the climate tech ecosystem that have more emerging technologies.
Within oil and gas CVC, there are three main types of successes:
Traditional exit: The traditional exit occurs occasionally but is not the main successful outcome for oil and gas CVC. In this scenario, a CVC purchase shares of a startup, the startup receives support or resources from the CVC, and after an approximately five-year time horizon, the CVC exits with a presumably positive ROI. However, the investment often does not have a long-term effect on corporation’s strategy.
Nurture a supplier: In this scenario, a CVC invests and partners with a startup or small-to-medium-size enterprise (SME) that is developing a technology applicable to its business. After helping an SME mature, the corporate can now become a customer to the SME and access products that would have otherwise not been developed. For example, in 2014, Shell invested in Strohm (formerly known as Airborne Oil & Gas, rebranded in 2020); in 2017, Strohm delivered a thermoplastic composite pipe for Shell to use in its manufacturing facility. As such, Shell became Strohm’s customer, while Strohm remained an independent company.
Acquire and integrate: In this scenario, a CVC acquires a startup or SME, integrates it into the business, and expands its footprint. For example, in 2016, TotalEnergies created new divisions to keep abreast of the evolving energy transition, specifically stating that it was to expand into energy storage. Soon after, Total acquired Saft as an avenue for Total to own battery technology and expand into this new market.
The primary motive for oil and gas CVCs is strategic impact on the broader business in a reasonable time span. While a positive ROI is, of course, desirable, it is not as meaningful a metric as annual results. Although metrics for success vary greatly from fund to fund, a common objective is the ability to pursue new avenues of technology that help the business and contribute to company goals.
Develops gasification technology for the conversion of carbonaceous feedstock into syngas; near-term focus is on MSW, plastic waste, and lignocellulosic feedstock
Operates a 10-MG/y methanol and/or ethanol facility in Edmonton, Canada, since 2015
Developing three commercial projects for methanol and drop-in fuels in the Netherlands, Spain, and Canada
Raised approximately USD 915 million since inception; recently announced a USD 685 million commercial project for biofuels production in Montreal, Canada, and a USD 255 million round from Repsol, among others
Partnerships with Nouryon, Nova Chemicals, Port of Rotterdam, Suez, Shell, Suncor Energy, and Repsol, among others
Clients interested in renewable syngas for downstream fuels and chemicals production should engage with Enerkem for project development opportunities, as the company's gasification technology is validated at scale