Investing

Chevron New Energies Partners With Raven, Hyzon to Produce Hydrogen from Organic Waste

Greg Morcroft

Published: January 12, 2023 10:35 pm

Chevron (US:CVX) subsidiary Chevron New Energies unveiled a venture with Raven SR Inc. and Hyzon Motors Inc. to produce hydrogen from organic waste. The facility, Raven SR 1 LLC, will be located in Richmond, California and is expected to come online in early 2024. Chevron New Energies will own a 50% stake in the venture.

Hydrogen is a versatile industrial gas with potential uses in power plants and as a clean transportation fuel. The partners aim to off-take up to 99 wet tons of waste per day as a hydrogen production feedstock sourced from the West Contra Costa Sanitary Landfill. Chevron plans to market the low-to-negative emissions hydrogen to fueling stations in the Bay Area and Northern California. Hyzon will use its 20% stake to provide truck refueling at a hub in Richmond.

The Raven SR technology is a non-combustion thermal, chemical reductive process that converts organic waste and landfill gas to hydrogen and Fischer-Tropsch synthetic fuels. Unlike other hydrogen manufacturing processes, its Steam/CO Reformation does not require fresh water as a feedstock and uses less than half the energy of electrolysis. The process is more efficient than conventional hydrogen production and can deliver fuel with low to negative carbon intensity.

The joint project is well timed as the Biden Administration has implemented new tax credits for low-carbon hydrogen production. The credits are worth up to $3 per kilogram of hydrogen, based on emissions reduced. It’s worth noting that with the current interest in hydrogen technology and the push of governments toward a low carbon economy and zero emission targets, some analysts see hydrogen as a leading alternative energy source in the following decades.

The Raven SR facility could be an exciting investment opportunity for stock traders. With the addition of carbon capture technology, the project could be eligible for tax credits for hydrogen production, reducing costs and increasing profitability.

In a filing with the US Securities and Exchange Commission in December, Chevron and Hyzon detailed the plan to invest in Raven SR S1 LLC to develop, construct, operate and maintain a solid waste-to-hydrogen generation production facility in Richmond, California. Chevron will invest $20 million, while Hyzon will invest $10 million for a 20% stake in the LLC.

It is important to note that a company like Chevron is investing in the low carbon sector and the hydrogen market, which might signify growing interest and potential. Traders should be aware of this development and monitor the project’s progress to assess any potential impact on the company’s stock value.

This article originally appeared on Fintel