Exclusive: Inside TES’s ambitious plan to catalyse the energy transition with e-NG

Tree Energy Solutions (TES) is on a mission to drive the green transition and accelerate full global decarbonisation. Electric natural gas, e-NG for short, is a large part of this mission, and it hopes to generate one million tonnes of the product per annum by 2030.

What exactly is eNG? It’s a synthetic, ultra-low-carbon natural gas produced by combining renewable hydrogen and recycled CO2 through methanation. One of the major perks of e-NG is that it uses mature, proven technologies. No major upgrades are required, and the infrastructure, ships, pipes, and factories can all remain the same.

In light of the gasworld’s upcoming CO2 Summit, the CO2 utilisation in e-NG is of high interest here. TES says to think of the CO2 it uses to create e-NG like old-fashioned milk bottles that are dropped off at your door and collected again once you are done. TESy uses CO2 to carry and deliver the green hydrogen, and once its customers are finished, it recycles it within the company system.

Here, in this exclusive interview, TES’ Director of Climate Solutions, Tyler Cole, tells us all about e-NG and its benefits and gives a tease of his upcoming presentation in Nashville that will focus on CO2 utilisation and 45Q.

Thank you for taking the time to speak to gasworld today, Tyler. Why don’t you start by telling us more about the innovative technologies and solutions TES offers to address CO2 emissions?

Our core strength is our people. We have assembled a prolific team of experienced clean energy project developers to engineer and optimise existing technologies, such as electrolysers and Sabatier reactors, to produce eNG. As a drop-in solution, eNG demonstrates a greater than 85% reduction in lifecycle emissions compared to fossil natural gas. TES believes that eNG is the smartest use of available technologies because it can be deployed immediately to existing gas networks and pipelines, meaning e-NG can meet demand for green molecules and slash emissions without waiting for major infrastructure upgrades or conversion costs. e-NG also supports the scaling up of advanced technologies needed for the energy transition, such as electrolysis and CO2 capture, transport, and storage. It is a solution for today that is flexible enough to meet the demands of tomorrow.

At gasworld’s upcoming CO2 Summit, you will highlight both 45Q and CO2 utilisation. With that in mind, can you briefly explain what 45Q is and its significance in the context of CO2 utilisation and sequestration?

Section 45Q of the US Tax Code provides performance-based tax credits for carbon management projects that capture or utilise carbon monoxide and carbon dioxide. First implemented in 2008, expanded in 2018 and again in 2022 with passage of the Inflation Reduction Act, 45Q provides up to a maximum of $85 per tonne for sequestration and $60 per tonne for utilisation, when prevailing wage requirements are met. It also includes up to $180 per tonne for direct air capture (DAC) sequestration and $130 for DAC utilisation. Additional changes make this credit appealing to developers, including direct pay option and credit transferability. It’s clearly the most significant factor when evaluating CCUS project viability.

Howhas the implementation of 45Q impacted the CO2 capture and utilisation industry?

Project development interest remains at an all-time high, but implementation has been slowed by lengthy permitting cycles, a lack of dedicated CO2 transport and storage infrastructure, and uncertainty around other tax credit guidance, such as the 45V Clean Hydrogen Tax Credit. 

Does TES engage with policymakers to promote favourable conditions for CO2 reduction technologies? If so, how?

Yes, TES has actively engaged with federal and state lawmakers to maximise value of 45Q. In visits to Congressional offices, TES helped garner support for the CCU Parity Act, which aims to increase the value of utilisation to $85 per ton. In addition, TES is actively engaged in various industry associations to offer support for policies that reduce costs and support carbon capture projects.

What are some of the biggest challenges and opportunities you see in the North American CO2 market?

The tremendous amount of interest in new CCUS projects has created a lot of noise in the space, which is not always helpful to emitters looking to develop new projects. We frequently find ourselves educating CO2 suppliers and policymakers on the benefits of CO2 utilisation compared to sequestration. While CCS will be an important and large market moving forward, emitters without access to transport and permanent storage are equally numerous and deserve the opportunity to monetise their emissions through utilization. These projects are essential to support existing and future CO2 market demand.

Finally, what key message would you like to convey to the attendees of the North American CO2 Summit 2024?

The CO2 market is on the cusp of disruption, with new sources of supply and demand quickly emerging. TES hopes to work with the industry to support responsible scaling of the CCUS supply chain while urging policymakers to provide needed guidance and clarity around key issues such as permitting, oversight, and environmental impacts.