Enerkem, Nova chart new path from waste plastic to Circularity

April 15, 2022 |

There’s Big Oil, Big Ag, Big Tech, Big Pharma there’s the Big Apple, the Big Easy, and now that Enerkem is joining the ranks of the ever-mightier with news of its latest $255 million capital raise, we better think of a category and Big SynGas might do the trick. The Canadian firm has attracted admirers and investors around the world because it has found a way to unlock municipal solid waste as a feedstock. But the truth is, the trick is not in handling municipal solid waste, it is the finding of technology to make useful products at an affordable price. The secret is in the intermediate phase, Enerkem has mastered the bright arts of renewable syngas and next time you see a landfill somewhere, think of all the product of the future that will come from above the ground instead of below. 

It was something always contemplated in science fiction. The world of Star Trek seems to have little garbage and no landfills. The Planet Krypton had many troubles and came to a bad end, but Jor-El makes no references to a waste crisis, or a greenhouse gas emission build-up. Perhaps there’s an En-Erkem in the Superman backstory somewhere, who realized that one person  throwing away an empty Cheerios box is simply making room on a shelf for tomorrow’s food, 9 billion people throwing waste away is a materials handling crisis of the first magnitude. The old saying, I think it’s corrupted from the Confucius period, is that “when the student is ready, the teacher arrives.” 

Our industrial output has brought us to the point where even a modest waste fraction causes enough problems that we are ready for the solution. And, now at industrial scale, Enerkem has arrived. Four storylines this month compel attention to the useful products now available from renewable syngas. Some are of everyday usefulness, some are stories of meeting urgent need.

The staggering $255 million cap raise

This past week, the news arrived from Canada that Enerkem closed its latest financing round totaling $255 million. Lead investor was Repsol, which invested$17 0 million, of which $75 million is in Enerkem’s equity and $95 million in convertible debt. In addition, Monarch Alternative Capital, a new investor, contributed $30 million to the round while Avenue Capital Group is reinvested with $30 million, both in convertible debt. Finally, there is $25 million reinvested in equity by some existing shareholders. J.P. Morgan Securities LLC served as placement agent.

Repsol, if you haven’t read elsewhere, is is a global multi-energy company operating in 24 countries. The company recently set out a zero net emissions by 2050 goal. 

Since last year, the company has partnered with Enerkem and Agbar to build Ecoplanta Molecular Solutions in El Morrell, near Tarragona, Spain. The plant, scheduled to be operational in 2026, will use Enerkem’s technology to process some 400,000 tonnes of non-recyclable solid waste per year and produce close to 240,000 tonnes of methanol. Among over 300 projects submitted by major European industrial groups last year,  

The SAF frontier

Last week, an independent panel selected Enerkem as the winner of “The Sky’s the Limit Challenge” hosted by Natural Resources Canada, from among the four finalists. The  technology group demonstrated the production of sustainable aviation fuels from forest biomass carbon, with a 93% reduction in GHGs.

The prize won by Enerkem constitutes a $5 million grant to continue commercializing its innovative fuel. As a finalist, the company was selected in 2019 to receive $2 million to develop its technology to compete for the grand prize.

Some of the research was carried out in collaboration with the CanmetENERGY research centre in Ottawa. The work was led by Michel Chornet, Executive Vice-President, Engineering, Innovation and Operations, Enerkem; Stéphane Marie-Rose, Director, Catalytic Processes Group, Enerkem; and Esteban Chornet, cofounder of Enerkem and CRB, and scientific director at CRB Innovations.

“The Sky’s the Limit Challenge” is a national competition focused on developing clean, sustainable and economically viable aviation fuel in Canada that allows the commercial aviation sector to reduce its carbon footprint.  

In partnership with Shell, Enerkem is already working on another project to produce aviation biofuels from sorted urban waste in Rotterdam, the Netherlands, using a process that is slightly different from the forest biomass method. The process to certify aviation fuel produced from forest biomass is already underway in Canadian, U.S. and European jurisdictions.

European Commission awards a key grant to the Ecoplanta project

At the beginning of the month, Ecoplanta signed a grant agreement with the European Commission to carry out a large-scale project under the Innovation Fund. The non-recyclable waste solution project, Ecoplanta, has been recognized for its highly innovative technology and stands out for its contribution to climate change mitigation, making it worthy of the European Commission’s support from among the over 300 projects submitted. 

Ecoplanta Molecular Solutions was one of seven projects selected for financial support from the European Commission, with a confirmed grant of up to €106 million.

Located in a petrochemical complex in El Morell, near the port of Tarragona in Spain, the plant will produce 240 kt/y of methanol and recover 70% of the carbon present in the non-recyclable materials. Based on the Innovation Fund methodology, the project will achieve a reduction of 3.4 Mt CO2eq of greenhouse gas (GHG) emissions over the first ten years of operation. 

The Innovation Fund call for large-scale projects was first launched last year by the European Commission to support breakthrough technologies in energy-intensive industries, renewables, energy storage and carbon capture, use and storage.

The NOVA Chemicals plastics-to-products initiative advances to pilot stage

This week, news arrived that NOVA Chemicals and Enerkem advanced their chemical recycling technology to pilot stage in Edmonton, Alberta, thanks in part to CDN$4.5 million in funding from Alberta Innovates.

The funding, provided through Alberta Innovates’ Technology Innovation and Emissions Reduction (“TIER”) Economic Recovery Program has enabled the companies to expedite construction of a pilot-scale reactor system that converts syngas produced from used, non-recyclable and non-compostable plastics to feedstocks for virgin-grade plastics.

The project leverages the gasification expertise of Enerkem – a world-leading waste to renewable fuels and chemicals producer – and NOVA Chemicals’ petrochemicals and plastic manufacturing experience to position Alberta as a world leader in the development of a circular economy by diverting waste from landfills, creating value-added products, and reducing greenhouse gas emissions.

The Bottom Line

Enerkem’s at the forefront of what the Europeans call the circular economy. As Greg DeKunder, VP, Polyethylene Marketing at NOVA Chemicals put it, “NOVA has a bold ambition to create a plastics circular economy and work to design a low carbon, zero plastic waste future,” said  “Advanced recycling technologies are a game changing component of enabling a circular economy and achieving zero plastic waste in the environment. This joint initiative with Enerkem further demonstrates that industry collaboration will be key to providing economically viable solutions for sustainable, circular plastic production.”

So, urban waste, forest waste, waste plastics — transformed into syngas and into virgin-grade plastics, aviation fuel, and methanol, products that once were almost exclusively the domain of below-the-ground fossil feedstocks such as petroleum and natural gas. What was below in the dark Hades of underground fossil reserves, now can come from the above-ground resources that once were destined for the landfill or the incinerator. 

So, to vary the phrase that Shakespeare gave to Mark Antony, I come not to bury waste, but to praise it. Or, praise the new use of it, which is hastening the death of waste, and now perhaps we have some inkling as to how the Kryptonian achieved the feat in fictional days gone by.

 

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