Oxylus Energy Raises $4.5 Million Seed Round for Clean Fuel Technology

Toyota Ventures and Azolla Ventures Investments will Boost Development of Cost-Effective Green Methanol Production

NEW HAVEN, Conn., Sept. 3, 2024 /PRNewswire/ -- Oxylus Energy, developer of a novel carbon utilization technology for the production of e-fuels, today announced the close of its $4.5 million Series Seed investment co-led by Toyota Ventures and Azolla Ventures with participation from Earth Foundry and Connecticut Innovations.

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Oxylus' solution is the first low-temperature and low-pressure conversion of carbon dioxide to green methanol, a liquid fuel. This is enabled by commercializing the first-ever catalyst developed at Yale University by Professor Hailiang Wang for direct electrochemical conversion of carbon dioxide to methanol. Building reactors similar to green hydrogen electrolyzers, Oxylus creates methanol using only captured carbon dioxide, water, and electricity. Designed to operate in modular conditions, this approach is a lower-cost technology for carbon conversion into alternative fuels. This funding will accelerate Oxylus' technology development, prototype testing, and pilot deployment.

Oxylus Energy's methanol can be used as a drop-in fuel replacement or upgraded to jet fuel and other green petrochemicals. By uniquely combining carbon conversion and alternative fuel production, this approach can reduce energy expenditures and cut costs for fuel production. "Direct electrochemical conversion of carbon dioxide at low temperatures and pressures is the only way to decrease the cost of green methanol," said Conor Rooney, Co-Founder and CTO of Oxylus. According to Harrison Meyer, Co-Founder and COO of Oxylus, "Without decreasing the price of methanol, it will be difficult to decarbonize the hard-to-abate sectors of aviation, shipping, and petrochemicals that are currently responsible for 11% of global emissions."

The World Economic Forum states that green methanol can reduce carbon dioxide emissions by almost 95%. Furthermore, "green methanol can be blended with traditional gasoline or diesel fuel, offering a seamless transition … minimizing the need for infrastructure upgrades." Current green methanol production is less than 0.2 million tons annually, but according to estimates from the International Renewable Energy Agency (IRENA), this is likely to rise to 500 million tons by 2050. "This is why Oxylus' technology is critical—it can meet the growing market demand for methanol in the net-zero transition at a price that actually works for industry," said Perry Bakas, Co-Founder and CEO of Oxylus.

"We are thrilled to support the team at Oxylus Energy as they work to scale this cost-effective process for e-fuel production," said Lisa Coca, Climate Fund partner at Toyota Ventures. "Eliminating the need for hydrogen as an input is a significant innovation in the green energy space that has the potential to dramatically reduce production costs and unlock numerous decarbonization pathways."

"While green methanol provides a pathway to decarbonize hard-to-abate sectors like shipping, maritime, and aviation, price premiums and limited supply restrict feasibility of adoption. Oxylus Energy's modular single-step CO2 electrolyzer, however, is highly efficient, reduces cost, and can be easily stacked to scale green methanol production," said Amy Duffuor, General Partner at Azolla Ventures. "Oxylus Energy's technical progress combined with the novel catalyst, complementary team, and ability to target multiple market applications, makes it an optimal investment for Azolla. We are incredibly excited to partner with Oxylus Energy on the next phase of their journey."

About Oxylus Energy

Oxylus Energy is a climate technology company developing low-temperature and low-pressure conversion of carbon dioxide into green methanol. Oxylus Energy was founded at Yale by graduate students Harrison Meyer, Conor Rooney, and Perry Bakas and incubated at ClimateHaven. Oxylus converts CO2 into carbon-neutral fuels and chemical feedstocks. Oxylus' electrolyzers are designed to be modular and enable onsite carbon utilization and fuel production. Carbon utilization in green methanol can provide drop-in fuels and chemical feedstocks for the hard-to-abate sectors of shipping, aviation, and petrochemicals. To learn more, go to: https://www.oxylusenergy.com.

About Toyota Ventures

Toyota Ventures is the early-stage venture capital arm of Toyota. Founded in July 2017, its mission is to discover what's next for Toyota by helping startups bring disruptive technologies and business models to market quickly. With more than $800 million in assets under management, the firm is dedicated to investing in talented entrepreneurs around the world who are driving innovation in frontier technologies and climate solutions. For more information about Toyota Ventures and its portfolio companies, please visit www.toyota.ventures.

About Azolla Ventures

Azolla Ventures, launched by Prime Coalition in 2021, is an early-stage investor in climate breakthroughs that could avert catastrophic climate change. At Azolla Ventures, we prioritize impact first: every investment holds the potential for large-scale greenhouse gas reductions and a more just climate for all. The team seeks out bold entrepreneurs from all corners and embraces opportunities outside of venture norms. Azolla Ventures manages the $239MM Azolla Fund I and the $50MM Prime Impact Fund. For more information about Azolla Ventures, please visit https://www.azollaventures.com.