Investing in sustainable aviation fuel

This week, we look at two companies raising significant capital to scale sustainable aviation fuel (SAF), additional investments in direct air capture and other forms of carbon removal, and new targets for climate action at COP29.

Follow Tectonic on Instagram and LinkedIn for regular updates about the innovators and innovations moving climate ambition into action.

Twelve secures $675 million to scale SAFs: Twelve, a company focused on transforming carbon dioxide into usable products, has secured $645 million in funding to scale operations, including completing its AirPlant One, their first sustainable aviation fuel (SAF) plant in Moses Lake, Washington. The company's patented technology produces SAF from biogenic CO2, water, and renewable energy sources, cutting lifecycle emissions by up to 90% compared to conventional fossil jet fuel. The funding includes up to $400 million in project equity financing from TPG Rise Climate to support the development of future SAF production plants and $200 million in Series C investment from TPG, Capricorn, Fifth Wall, and others. This follows an investment announced last week by Brookfield Asset Management in Infium, a company with a similar approach.

​​SAF startup raises $69 million: Sustainable aviation fuel startup AIR COMPANY raised $69 million in its Series B. The company uses a process that mimics photosynthesis to turn carbon and hydrogen in the air into alcohols that can be used for various products, including perfumes, vodka, and SAFs. The raise included participation from Avfuel, Alaska Airlines, Lowercarbon Capital, and existing investors Toyota and JetBlue. The firm has off-take agreements for more than a billion gallons of SAFs and a contract with the Department of Defense. 

Companies commit $4.5 million to scale carbon removal: Alphabet, H&M Group, Match, Shopify, and Stripe are committing $4.5 million to nine early-stage companies working on carbon removal technology. The start-ups will each receive upfront payments of $500K to help them scale. If they reach certain milestones, they'll be considered for larger commercial contracts from Frontier, the consortium of corporate buyers with over $1 billion in advanced market commitments to purchase permanent carbon removal. The consortium has already contracted 580,000 tons of carbon for $320 million, though only 2,600 tons have been delivered.

Startup raises €14.5M to scale direct air capture: Phlair has raised a €14.5M seed round to scale its direct air capture (DAC) technology to capture carbon at a lower price point. The company's technology uses an acid-based method instead of heat to release captured carbon dioxide from its sorbent, potentially reducing energy consumption and costs. Phlair is currently piloting its technology and plans to have larger plants operational by late 2025, with projects already underway in the Netherlands and Canada and sales of carbon credits to Frontier.

Three Mile Island returns to fuel Microsoft data centers: Constellation Energy Corp. will invest $1.6 billion to revive a nuclear plant on Three Mile Island in Pennsylvania by 2028. When restored, the reactor will have a capacity of 835 megawatts, enough to power more than 700,000 homes. The company will sell all of the output to Microsoft, who agreed to purchase the energy for two decades as it seeks carbon-free electricity for its data centers.

Farmers embrace tech to reduce chemicals: Farmers are using robots with AI-powered cameras to identify and target invasive plants, enabling them to be more targeted in applying liquid weed killers. Farmers use an estimated $37 billion of crop chemicals annually, which have been found to negatively impact human and environmental health. When fully embraced, the new machinery from companies like Deere & Co., Israel's Greeneye, and Brazil's Solinftec can reduce the use of the sprays by as much as 70-90%. 

Energy Department commits $1.56 billion for ammonia: The US Department of Energy committed $1.56 billion for an ammonia project in Indiana. Other recent deals included a $2.35 billion project on the Gulf Coast and investments by Abu Dhabi's national oil company and ammonia producer CF Industries in Texas and Mississippi, respectively. The investments come as ammonia becomes a popular commodity for its use in fertilizer and low-carbon energy. The Indiana project will trap CO2 emissions from the process and bury them underground. Wabash Valley Resources, backed by oil companies and Nikola, plans to repurpose a former coal plant to produce ammonia using a byproduct of oil refining and carbon capture technology, aiming for an 80% reduction in emissions compared to traditional methods.

Norway leads on EVs: Norway became the first country to have more electric vehicles than gas-powered cars. Of the 2.8 million cars in the country, 26.3% are fully electric, and 26.2% are gasoline. Diesel cars still make up the largest share at 34.8%. The growth in EVs followed government incentives, including exemptions from sales and emission taxes, lower tolls and parking fees, and allowing EV drivers to use bus lanes.

BP backs out of wind in the US: BP has put its US onshore wind energy business, bp Wind Energy, estimated to be worth $2 billion, up for sale. Spread across seven states with a combined capacity of 1.7GW, the project includes nine fully-owned wind farms and a share in a tenth in Hawaii. This comes after the company wrote down the value of its offshore US wind business by $1.1 billion after it struggled to make progress. The company will focus on Lightsource bp, a solar energy business it is in the process of buying. 

UK foreign secretary prioritizes climate: The UK's new foreign secretary, David Lammy, said climate action would be "central to all the Foreign Office does" and climate change represented a more pervasive threat than terrorism. While committing to action, Lammy also warned previous funding commitments from the UK would have to be considered given the state of the country's finances. The country's new energy secretary, Ed Miliband, echoed the sentiments in his first major speech this past week.

Report highlights harmful subsidies in developing countries: A new report from ActionAid found more than $650 billion per year in subsidies in developing countries go to fossil fuel companies, intensive agriculture, and other environmentally harmful industries. By contrast, the report found that renewable energy projects in the developing receive 40 times less than those in the fossil fuel sector. The analysts said that while some subsidies were used to benefit poorer communities, many were due to "corporate capture" of government and public institutions.

COP29 presidency outlines targets for this year's meeting: Leadership from the host country Azerbaijan outlined more than a dozen targets for COP29, including a fund with voluntary contributions from fossil fuel-producing countries and companies that can fund climate action climate-related costs in developing countries, increasing global energy storage capacity six times above 2022 levels by the end of the decade, and creating a global market for clean hydrogen.