Verde Clean Fuels Announces Carbon Capture Agreement for Renewable Gasoline Plant in California

Project aims to produce approximately 7MM gallons of renewable gasoline and sequester over 100,000 metric tons of CO2 per annum by 2027

August 01, 2023 08:00 AM Eastern Daylight Time HOUSTON--(BUSINESS WIRE)--Verde Clean Fuels (“Verde”) (Nasdaq: VGAS), a company focused on becoming the leading supplier of gasoline and other fuels derived from renewable feedstocks or natural gas, today announced a Carbon Dioxide Management Agreement (CDMA) between Verde and Carbon TerraVault JV HoldCo, LLC (“CTV JV”), a carbon management partnership focused on carbon capture and sequestration development formed between Carbon TerraVault, a subsidiary of California Resources Corporation (“CRC”) (NYSE: CRC), and Brookfield Renewable (NYSE: BEP).

“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”

Under the terms of the agreement, Verde will construct a new renewable gasoline production facility at CRC’s existing Net Zero Industrial Park in Kern County, California. CTV JV initially plans to sequester a minimum of 100,000 metric tons (MT) per year of carbon dioxide (CO2) from Verde’s facility at the CTV I carbon storage vault. This emissions avoidance is the equivalent of taking nearly 22,000 passenger vehicles off the road. This new facility is expected to produce approximately 21,000 gallons per day of renewable gasoline (fully refined, finished fuel) from biomass and other agricultural waste feedstock to help support the further decarbonization of California’s economy and its transportation sector.

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“Traditional gasoline used today is refined from crude oil and makes up over half of greenhouse gas emissions generated by the U.S. transportation sector, the largest contributor to GHG emissions. We believe our proprietary technology and scientific approach will further enable California’s consumers of gasoline to seamlessly and materially participate in the critical decarbonization of our atmosphere and help achieve California’s climate goals,” said Ernest Miller, Chief Executive Officer of Verde. “Our partnership with CTV marks a significant step towards fulfilling our domestic growth ambitions and represents a concrete pathway to decarbonizing the transportation sector. By teaming up with the leading carbon management business in the U.S., we are poised to make a substantial impact.”

“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,” said Francisco Leon, CRC’s President and Chief Executive Officer. “This new agreement between CTV JV and Verde Clean Fuels provides an innovative approach to renewable fuels at the heart of energy development in the state, and further validates CRC’s decarbonization efforts by a publicly traded company looking to expand in California.”

Project & Agreement Highlights

• The renewable gasoline facility will employ Verde proprietary and innovative liquid fuels technology to convert synthetic gas (syngas) into renewable gasoline. The gasification system is expected to be supplied by InEnTec LLC. (www.inentec.com) The project is expected to produce approximately 7 million gallons per year of renewable gasoline for use as transportation fuel. A minimum of 100,000 MTPA of associated CO2 is expected to be permanently sequestered at CTV I

• Project Final Investment Decision (FID) is targeted for mid-2025, with operations expected to begin in the second half of 2027

• The CDMA also provides Verde with a lease for 50 acres at CRC’s Net Zero Industrial Park at Elk Hills field on which to construct its facility

• CTV JV will provide in-field transportation and a permanent CO2 sequestration site at CTV I in exchange for an injection fee on a per MT basis that fits within the previously disclosed economic type-curve for projects that require a storage-only solution

• The project’s location at the CRC’s Net Zero Industrial Park will eliminate the need for long haul CO2 transportation and reduce certain midstream capital requirements

• CTV JV and Verde are discussing CRC’s possible financial participation in the RG facility, including potentially a significant equity stake

• The CDMA frames the contractual terms between parties by outlining the material economics and terms of the project and includes conditions precedent to close. The CDMA provides a path for the parties to reach final definitive documents and FID

About Verde Clean Fuels, Inc

Verde Clean Fuels, Inc. (Nasdaq: VGAS) (“Verde”) is a renewable energy company focused on the development of commercial production plants to convert syngas, derived from diverse biomass feedstocks, such as yard waste, agricultural waste, and sorted municipal solid waste, as well as stranded or flared natural gas (including renewable natural gas) into gasoline through its innovative and proprietary liquid fuels technology, the STG+® process. Through its STG+® process, Verde converts syngas into fully finished fuels that require no additional refining, such as Reformulated Blend-stock for Oxygenate Blending (“RBOB”) gasoline. To learn more, please visit www.verdecleanfuels.com.

About Carbon TerraVault Joint Venture

Carbon TerraVault Joint Venture (CTV JV) is a carbon management partnership focused on carbon capture and sequestration development, and was formed between Carbon TerraVault, a subsidiary of CRC, and Brookfield Renewable. The CTV JV develops both infrastructure and storage assets required for CCS development in California. CRC owns 51% of the CTV JV with Brookfield Renewable owning the remaining 49% interest.

About California Resources Corporation

California Resources Corporation (CRC) is an independent energy and carbon management company committed to energy transition. CRC has some of the lowest carbon intensity production in the US and it is focused on maximizing the value of its land, mineral and technical resources for decarbonization by developing CCS and other emissions reducing projects. For more information about CRC, please visit www.crc.com.