Waste to Value: On Emvolon and Green Methanol

Hello,

Hope you’re all doing alright out there.

Today’s piece takes me back to my roots of company and technology analysis, which will perhaps be a welcome reprieve for some of you from my unfettered opinion and macro think pieces. This one offers a deep dive on Emvolon, a company that takes otherwise wasted energy resources that warm the planet and pollute the environment and turns them into valuable chemicals like methanol and ammonia. I co-wrote it with Lauren Singer, a Managing Partner at Overview Capital (one of Emvolon’s investors). The piece was originally published in Overview Capital’s newsletter, The Overview, which you all should subscribe to via their website here.

DEEP DIVE

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 net-net

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.

From there, ideally it will expand to take on many more sources of methane that it can make use of to create valuable products. These methane sources often drive global warming otherwise, making Emvolon's work all the more urgent and attractive.

OTHER COOL STUFF

If you still have charge in your battery for more in-person events before 2024 wraps up, join me and 300 bright minds in climate tech at the HackSummit in New York on December 12th to 13th! The event will feature founders of companies from the stealth to Series B stages, partners and principals at some of the most active investment funds in the space, and leaders from corporates and other industry insiders. Attendees and speakers include Clay Dumas at Lowercarbon Capital, Etosha Cave at Twelve, Augustus Doricko at Rainmaker, Guy Vidra at Collaborative Fund, and more.

Save 20% on your pass with code KEEPCOOL. Get your tickets here.

JOBS

🌿 GTM Principal, Ulysses Ecosystem Services 

Ulysses, a startup building automated technologies to restore marine ecosystems, starting with seagrass meadows, is hiring a GTM Principal to join the founding team and lead the company’s go-to-market strategy and revenue growth. Ulysses recently announced a $2 million pre-seed funding round led by Lowercarbon Capital.

The role is based out of San Francisco (in person). More here.

⛏️ Founding Software Engineer, Durin Mining Technologies

Durin Mining Technologies, a startup that aims to modernize mining, make it more efficient, and accelerate critical metal and mineral mining domestically, is hiring a Founding Software Engineer to create its mining software. The role doesn’t require mining experience and will involve working closely with hardware and geological engineers.

The role is based out of El Segundo, CA (in person). More here.

We’ll be back on Sunday, be well.

— Nick