Houston-based Verde Clean Fuels (Nasdaq: VGAS), a supplier of gasoline and other fuels derived from renewable feedstocks or natural gas, announced Monday a carbon dioxide (CO2) management agreement (CDMA) with Carbon TerraVault JV HoldCo, LLC (CTV JV).
CTV JV is a joint venture of Carbon TerraVault, a subsidiary of California Resources Corporation (NYSE: CRC), and Brookfield Renewable (NYSE: BEP).
Under the deal, Verde will get a lease for 50 acres at CRC’s existing Net Zero Industrial Park in Kern County, California, for the construction of a new facility to convert synthetic gas into renewable gasoline using its proprietary and innovative liquid fuels technology.
Production capacity is projected at 21,000 gallons per day of renewable gasoline from biomass and other agricultural waste feedstock.
In turn, CTV JV will initially sequester — for an injection fee per metric ton — a minimum of 100,000 metric tons per year of CO2 from Verde’s facility, which is equivalent to the emissions of 22,000 passenger cars, according to the statement.
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“Our partnership with CTV marks a significant step towards fulfilling our domestic growth ambitions and represents a concrete pathway to decarbonizing the transportation sector,” Verde’s CEO, Ernest Miller, said in a comment to the deal.
“Doubling the CO2 storage opportunities under CDMAs at our Net Zero Industrial Park at Elk Hills in a matter of eight months further underscores CRC’s carbon management strategy and dedication to energy transition in California,” Francisco Leon, President and CEO of CRC, CTV JV’s parent, added.
Project Final Investment Decision (FID) for the plant is expected in mid-2025, and operations are scheduled to start in the second half of 2027.
Since the facility is located at the CRC’s Net Zero Industrial Park there will be no need for long-haul CO2 transportation and certain midstream capital requirements will be limited.
The partners are discussing the possibility of financial participation by CRC in the renewable gasoline plant, including potentially a significant equity stake.
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