Waste to Value: On Emvolon and Green Methanol

Hi there,

We’re Overview Capital and we invest in the mitigation of methane and other super pollutants at the earliest stages. Welcome to the thirteenth edition of our newsletter, The Overview: Our biweekly dispatch on the world of methane and other super pollutants.

Today’s newsletter offers a deeper dive on Emvolon, an Overview Capital portfolio company. In a sentence, Emvolon takes otherwise wasted energy resources that warm the planet and pollute the environment and turns them into valuable chemicals, like methanol and ammonia.

Chemical manufacturing accounts for ~5% of carbon dioxide emissions worldwide. If you include fuel production for aviation, maritime shipping, and heavy-duty road transport, that figure rises to ~15%. 

While carbon dioxide is a highly important greenhouse gas for humanity to address, as we often discuss, methane has driven approximately 1/3 of the warming the world has experienced since the Industrial Revolution. If there were a way to reduce emissions from chemical manufacturing and reduce methane emissions, that would be a win-win!

Fortunately, there’s Emvolon—an Overview Capital portfolio company based out of Woburn, Massachusetts, that spun out of MIT. Emvolon has now raised a total of $10.5 million in equity and grant funding, including a $2.3 million ARPA-E grant from the Department of Energy announced in July. The company makes modular containerized systems that transform methane into valuable liquid fuels like green methanol and ammonia. Emvolon’s engines were also covered in Axios last quarter after the company announced an agreement with biogas developer Montauk Renewables to install a demonstration methanol production system at a landfill in Humble, Texas.

Why is this consequential? In the atmosphere, methane is a more potent greenhouse gas than carbon dioxide, especially over shorter time frames. On Earth, it has a high energy content that lends itself to a range of versatile, high-value applications. We often say we should keep more methane on Earth and out of the atmosphere, which is exactly what Emvolon helps accomplish.

Meet methanol

Emvolon offers an excellent example of an equally economically and environmentally promising business. Its core technology takes typical combustion engines–not dissimilar to those found in cars–and converts them to modular, easy-to-deploy chemical processing plants that use methane to make methanol. While future use cases could include the production of other foundational chemicals, like ammonia—essential for fertilizer production and alone responsible for almost ~2% of global carbon dioxide emissions today—methanol is Emvolon’s first focus.

While methanol sounds a lot like methane, there are significant differences. Like methane, methanol is a high-energy density, versatile hydrocarbon fuel used for a variety of applications, such as making plastics, synthetic fabrics and fibers for clothing, adhesives, paint, plywood for construction, as well as pharmaceuticals and other chemicals. Like methane, it already represents a sizable global market (estimated to grow to around $40 billion by 2028, though estimates vary). Major industrial players like Methanex, Proman, and BASF produce many millions of tonnes of methanol annually. 

Compared to methane, methanol is easier to handle and transport, and it burns relatively cleaner. Unlike methane, methanol is liquid at ambient temperature and pressure, which is a positive for transportation and handling as methanol offers a higher energy density per unit volume. Conversely, methane is typically stored and transported as a liquid under high pressure or at cryogenic temperatures (hence the term liquefied natural gas, or 'LNG'). Methanol 'likes' to be liquid already.

Because of its desirable storage and transportation characteristics and the fact that it burns cleaner, methanol is also a leading candidate for a variety of decarbonization applications, which could grow the overall methanol market.  Methanol burns cleaner than conventional fuels for maritime shipping from both a carbon dioxide perspective and an air pollution perspective (fewer nitrogen oxides and other air pollutants), especially if you produce it with methane that would otherwise enter the atmosphere.

That’s a lot of benefits. The challenge? Methanol doesn’t exist abundantly in nature like methane. And for it to be effective as a more environmentally friendly solution, methanol needs to be produced efficiently from low—or no or even negative-emission—energy sources. Today, most methanol production is powered in some capacity by burning natural gas or coal, whether via steam methane reforming, where natural gas reacts with steam to produce syngas, or coal gasification, which uses coal to make syngas (with even higher carbon dioxide emissions).

Emmanuel Kasseris, PhD, co-founder and CEO of Emvolon, and a mechanical engineer by training, laid this out in a recent conversation with us as follows:

The same could be said of other chemicals and fuels touted as solutions for decarbonization, like hydrogen. Today, 90%+ of hydrogen is still produced with natural gas or coal, creating greenhouse gas emissions. The same is true for methanol (90%+ production is fossil fuel-based).

Emvolon’s differentiation: Mass conversion efficiency 

Suffice it to say that making ‘green’ methanol from stranded methane assets is a substantial opportunity, both economically and environmentally. In fact, it’s such an attractive concept that many companies have entered the space. Some have scaled considerably. For instance, Crusoe Energy, which recently raised $500 million in equity funding at a $3 billion valuation, takes stranded methane assets and uses them for data center power generation. Other noteworthy startups here include Aether Fuels, Greyrock, Velocys, and Verde Clean Fuels.

The foundation of Emvolon's business is taking 'stranded' methane and feeding it into its modified automobile engines to create synthesis gas ('syngas'), which is needed to make green methanol or ammonia. The range of potential methane sources for Emovolon to use, whether from oil and gas to biogenic sources across agriculture, animal waste, and landfills, means the pipeline of potential pilots and, eventually, commercial customers is diverse, as is the range of potential off-takers for green methanol. Emvolon works with operators of these types of sites to source methane that is often an environmental liability to the operator; many of them dispose of it directly into the atmosphere, burn it (flaring), or build expensive infrastructure to move it somewhere else or sell it. Given a better option, they'll listen.

Emvolon’s most distinct differentiation lies in the efficiency of its engine reactors. Emmanuel described Emvolon's engine 'reactors' as significantly more efficient than much of anything else on the market. The reactors are ‘fed’ limited air, which means that the combustion of methane in them doesn't generate H2O and CO2. Instead, they predominantly produce carbon monoxide (CO) and hydrogen (H2), the combination of which is the syngas needed to make methanol. Emmanuel notes the engines can produce up to 65% hydrogen, which can also be used to power the reactors themselves, driving greater efficiencies.

Emvolon’s engines offer a mass conversion efficiency in the 60 to 65% range (8 tonnes of methanol for 300 thousand standard cubic feet of methane). This efficiency is enabled by Emvolon’s IP, which was originated by its founders working at MIT and has been further developed since.

Today, Emvolon can build fifteen of its 40-foot containers per month, each of which can produce 8 tons of methanol per day. The company is ready to scale up as its pilots get built and results roll in. The scalability and modularity of Emvolon’s engines help lower production and operating costs via mass manufacturing and speed deployment.

Emmanuel put it succinctly:

The bottom line

Emvolon's technology and business model offer excellent examples of the win-win impact on both environmental and economic fronts inherent to working with methane, especially when you’re already selling the end product into established markets (like methanol’s market).

Right now, Emmanuel and Emvolon are laser-focused on delivering a successful pilot project based on the agreement they have with Montauk Renewables for their landfill site in Texas. As we speak, Emvolon is building the capacity to create up to 2,400,000 gallons in 2025 at the site. A successful pilot is what will, in turn, help secure other pilots and scale to commercial agreements.

Of course, all the sources of methane Emvolon can make use of to create valuable products often otherwise drive global warming, making Emvolon's work all the more urgent and attractive.

We look forward to watching their continued success.

News and policy

• In addition to the Tanager-1 spacecraft, which monitors methane and other greenhouse gas emissions from space, the EDF’s MethaneSAT satellite, launched earlier this year, is now publishing its data on methane releases from oil and gas operations and other sources.

• The Supreme Court recently rejected a stay request levied against a specific EPA rule designed to regulate methane emissions from oil and gas facilities.

• Greenhouse gas emissions across methane and carbon dioxide from upstream flaring and venting are still rising globally: Rysted Energy estimates upstream emissions close to 1 gigatonne of CO2-equivalent emissions in 2023, up 7% from 2022.

• For more reading on methane in general, see this recent article from Bloomberg on how pledges from major international players are not yet translating into methane emissions. Much more work and resource allocation in this field are critical.

Fundraising

• Crusoe Energy announced a $500 million capital raise at a $3 billion valuation and a $3.4 billion joint venture with investors Blue Owl Capital and Primary Digital Infrastructure to develop a 206 MW data center in Abilene, Texas. Crusoe Energy develops more sustainably powered data centers by diverting methane that would otherwise be flared to generate electricity with a higher combustion efficiency, which reduces methane emissions. The data center will be leased to Oracle, though the final customer is OpenAI, with Microsoft acting as a middleman (per Data Center Dynamics).

• The DOE closed a $162.4 million loan guarantee for LongPath Technologies to expand its methane monitoring for oil and gas-producing basins. The capital will help LongPath deploy more than 1,000 remote monitoring towers for real-time tracking across basins in Texas, Colorado, and more. 

• Ruminant BioTech, based out of Auckland, New Zealand, raised ~$3.6 million in equity funding from AgriZeroNZ and New Zealand Green Investment Finance and also received ~$2 million in grant funding for its methane-inhibiting bolus targeted at reducing livestock emissions from enteric fermentation.

Thanks for reading the thirteenth edition of The Overview. If you are a methane or super pollutant-focused company or want to connect on our investment work, please reach out to [email protected]. We appreciate you taking the time to read and engage.

– Team Overview