Clean Hydrogen Projects Lure Big Investors Like BlackRock

"Big investors are targeting companies that promise to solve the thorniest climate challenges, betting that the winners will reap a windfall.

The newest wager is on a Nebraska startup trying to upend the burgeoning industry of clean hydrogen with a process that uses natural gas but traps carbon by producing an ingredient vital for everyday products like car tires.

Investors including BlackRock Inc. and NextEra Energy Inc. are putting more than $300 million into Monolith, valuing the company at more than $1 billion. The investment adds to a summer flood of money that is trying to turn hydrogen into a pillar of the energy transition.

In the past month, Indian billionaire Gautam Adani's conglomerate said it would partner with TotalEnergies SE to invest $50 billion in green hydrogen over the next decade. BP PLC took a large stake in a more-than $30 billion project in the Australian outback. Shell PLC said it would build Europe's largest renewable hydrogen plant. And startups in the sector raised hundreds of millions from the likes of TPG Inc. and Amazon.com Inc.

Despite this year's stock-market volatility, investors have plowed money into areas seen as vital for minimizing global warming such as removing carbon from the atmosphere and making better batteries. The cash came even though shares of publicly traded companies like battery maker QuantumScape Corp. are down by 50% or more this year.

Analysts have long hoped that hydrogen could be used in sectors that are hard to wean from fossil fuels. These include shipping and trucking, commodity production and aviation. But costs were too high and there wasn't enough renewable energy to produce the needed hydrogen. It continues to mainly come from combining natural gas and steam for uses in chemical refining and to make the ammonia that goes into fertilizers.

Pressure on companies to lower their carbon footprints and falling prices for wind and solar power have shifted the economics of green hydrogen. Fossil-fuel and fertilizer shortages following sanctions on Russia unleashed the recent frenzy.

Many companies use machines to split water into hydrogen and oxygen, eliminating the carbon emissions associated with hydrogen production. That process will remain expensive and inefficient until the industry matures, analysts say.

Monolith aims to avoid those challenges. Instead of splitting water, its plant in Hallam, Neb., runs on renewable electricity to heat natural gas and turn it into hydrogen and carbon black, a material that goes into everyday products like rubber and paints. Making two products uses power efficiently and allows Monolith to be cost competitive, the company says.

Making carbon black rather than burying the carbon underground also makes the process unique. Many energy companies have proposed producing hydrogen from natural gas, then capturing and storing the carbon associated with it. Carbon capture and storage is currently expensive and impractical in many cases.

Monolith's hydrogen is produced with about 95% less emissions than conventional methods. The company hopes to use gas from landfills and animal waste or produced from plants to increase that figure. With enough of that gas, the process could remove more carbon from the atmosphere than it produces.

The hydrogen industry is where wind and solar were several years ago, before technology improved and costs fell, Chief Executive Rob Hanson said. "It's becoming a real sector now," he said. "It is the latest one that has gotten over that real initial phase of acceptance."

Mr. Hanson, a former solar-industry engineer, co-founded Monolith a decade ago, when few companies were producing hydrogen this way. Now, several upstarts and industry giants such as BASF SE are pursuing similar techniques. Monolith's plant near Nebraska's cornfields highlights the connection between farmers and cheap, clean hydrogen, which can be converted into ammonia used in fertilizers, he said." [1]

 

This process with black carbon would be a good fit for Russia, that has a lot of space to produce clean electricity and a lot of natural gas. 

 

1. Banking & Finance: Clean Hydrogen Projects Lure Big Investors Like BlackRock
Ramkumar, Amrith. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 15 July 2022: B.10.