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Alternative fuels are gaining ground as more startups dig for ways to power machines and vehicles without fossil fuels, Megan writes.

Why it matters: Investors are clamoring to fund the future of fuel, even though most of the technology and science remains in early stages.

Fuel replacements: Hydrogen and ammonia are both considered drop-in fuels because they can run on lightly retrofitted vehicle engines without major changes. Understandably, oil and gas majors have expressed interest in backing some promising hydrogen startups.

CERAWeek preview: All eyes are on green hydrogen

Novel fuels: Other options, like sustainable aviation fuel, are looking toward entirely new ways to power machinery and vehicles. Though decades-old, novel interpretations of nuclear energy have also been growing in popularity among climate investors.

Air Company inks $65M fuel deal with U.S. Air Force

Renewable Natural Gas maker Divert secures $63M

Electric fuels: For some lighter-weight vehicles and machinery, going all-electric makes the most sense for fossil-fuel alternatives.

At-home battery systems are having their moment

BP buying TravelCenters in huge EV charging push

Energy storage is starting to rival new transmission

1 big thing: Alternative fuels' state of play

Illustration of a gas can with a dollar sign etched on the side. 

Asset manager Baillie Gifford is pouring another $180 million into electric aircraft developer Joby Aviation, as federal regulators are taking new steps to clear the way for the mosquito-like machines, Alan writes.

Why it's the BFD: The reinvestment from a traditionally conservative institutional investor reflects major confidence in a technology that won't reach consumers until next year at the earliest.

Driving the news: Baillie Gifford is buying nearly 44 million newly issued shares at $4.10 per share, Joby announced in its Q1 earnings report. 

The sale is expected to close May 5. Baillie Gifford previously invested $15 million in Joby's $590 million Series C in 2020, plus another $49 million in the PIPE associated with Joby's SPAC merger in 2021.

Meanwhile, the Federal Aviation Administration is planning potential new traffic lanes for the air taxis being developed by Joby and a host of other startups. 

Context: Other developers of electric vertical and takeoff landing, or eVTOL, aircraft include Volocopter, Archer, Beta, and Wisk. 

Of note: Joby is ranked at the top of a "reality index" scorecard maintained by SMG Consulting, which aims to measure progress toward "delivery of a certified product at mass scale production." 

💭 Alan's thought bubble: We always take those types of scorecards with a grain of salt. But Joby in February completed the second of five certification stages with the FAA, is making progress toward the third, and landed another $55 million contract in April with the Department of Defense.

2. The BFD: Air taxis gaining altitude

A Joby Aviation eVTOL on display outside the New York Stock Exchange

A Joby Aviation eVTOL on display outside the New York Stock Exchange for the company’s IPO in 2021. Photo: Michael Nagle/Bloomberg via Getty Images

Online marketplace Hive Brands has signed a deal with one of Comcast's venture arms, Forecast Labs, Alan reports.

What's happening: Comcast will run ads for Hive on affiliated TV channels and streaming services, such as Peacock.

Hive will give Comcast equity and cash for each customer acquired.

How it works: Hive sells sustainable goods, with a focus on "anything and everything shelf-stable," company president Katie Tyson says.

That spans from snacks to soap, paper towels, pet food and bamboo toothbrushes.

Of note: The company is looking at acquisitions.

"It doesn't look like those macroeconomic forces are going to be improving  anytime soon," Tyson says. "Smaller brands maybe are either looking at  an acquisition or just shutting down entirely."

Context: Other online grocers in the sustainability space include Thrive Market, which frames itself more as a health-oriented store; Grove Collaborative, which generally focuses on cleaning and personal care products; and Misfits Market, the meat and produce subscription service that  recently acquired Imperfect Foods.

One fun thing: Hive's top-selling products? Tony’s Chocolonely chocolate bars, Elmhurst nut and oat milks, and Guayakí yerba matte.

3. Hive Brands and Comcast buzz

Illustration of a bag of groceries and money.

🗑️ Plastics cleanup: A coalition of investors managing about $10 trillion in assets issued a statement calling on consumer goods and grocery companies to cut their plastics consumption.

"As responsible investors, we are concerned that companies that do not proactively address these risks... may face higher costs or lose business opportunity, therefore putting long-term value creation and investment returns at risk," the investors said, per Reuters.

 💧Making water into fuel: Boston-based private equity firm Wave Equity Partners committed $30 million to MayMaan, a Hollywood, Fla.-based company developing fuel made from 70% water and 30% ethanol.

MayMaan plans to start small-scale production this year, with mass serial manufacturing slated for Q3 2024, a spokesperson tells Alan.

It’s eyeing an eventual transition from manufacturing to licensing, plus a potential energy-as-a-service play. The company has raised $40 million to date.

4. 🌡️ Temperature check

Illustration of an earth in a roast pan with a meat thermometer.

• A.P. Moller-Maersk, the shipping giant, is selling its remaining stake in Vancouver-based deep-sea mining firm The Metals Company, per WSJ. https://axios.link/3nm3924

• Aspen Power acquired an initial 10 ground-mounted solar projects in northwest Pennsylvania from Sunrise Energy. The sites total 42 MW, the first half of Aspen’s agreement with Sunrise to develop an 84 MW portfolio. https://axios.link/415HE32

• Pyka, an Oakland, Calif.-based developer of electric autonomous aircraft, received a $7m California Competes tax credit to expand manufacturing. https://axios.link/3HAPBq8

• Nel, an Oslo-based electrolyzer manufacturer for hydrogen production, announced plans to build an automated gigawatt-scale factory in Michigan. https://axios.link/3LA99Mn

The company is collaborating with GM, based in Detroit, to drive down hydrogen costs.

• Volkswagen and Bosch nixed plans to launch a joint venture for battery cell factories, per Reuters. https://axios.link/3LSOrsK

• United Airlines announced plans to implement sustainable aviation fuels this year on flights from San Francisco and London, per Reuters. https://axios.link/3HAfhD9

• Westinghouse unveiled a smaller, 300 MW version of its flagship AP1000 nuclear reactor, per CNBC. It’ll be available in 2027. https://axios.link/3VvsIu6

• Lion Electric, a Quebec-based electric truck manufacturer, unveiled a Class 5 electric truck. https://axios.link/422TMU0

5. Hot deals

• Blink Charging, the Miami Beach-based EV charging manufacturer and operator, promoted president Brendan Jones to president and CEO. He succeeds Michael Farkas, who will remain on the board. https://axios.link/3LWnwfm

• Subeca, a Dallas-based developer of advanced water metering systems, hired Patrick Keaney as CEO. Keaney was previously worldwide head of Amazon AWS Water. He succeeds Don Whitson, who is transitioning to executive chairman. https://axios.link/44sl7jQ

• Lineage Logistics, a Novi, Mich.-based temperature-controlled industrial REIT and logistics provider, hired Rob Crisci as CFO. Crisci was previously EVP and CFO of Roper Technologies. https://axios.link/3p47Uxv

• LanzaTech, the Skokie, Ill.-based carbon capture company, hired Aura Cuellar as EVP of growth and strategic projects. Cuellar was previously VP of energy transition for Shell. https://axios.link/3p63bLQ

• Faraday Future Intelligent Electric, the LA-based “ultimate intelligent techluxury” EV developer, hired Rich Schmidt as VP of manufacturing. Schmidt was previously SVP of manufacturing at Canoo and president of Lordstown Motors. https://axios.link/426d0YG

• Ohmium, the Incline Village, Nev.-based electrolyzer manufacturer, appointed Andrea Nicolás to its board. Nicolás was previously a partner at Skadden, Arps, Slate, Meagher & Flom. https://axios.link/3nuD40F

• Compass Minerals, the Overland Park, Kan.-based minerals company, appointed retired financial consultant Jill Gardiner to its board of directors. Gardiner is board chair of Capital Power. https://axios.link/3nylZTx

• Evergreen Action, a group that's proven influential in designing some of the Democrats’ climate law, hired Craig Segall as VP of policy, Axios' Andrew Freedman writes in Generate. Segall is a veteran of California’s powerful Air Resources Board. https://axios.link/3Vxcroo

6. It's personnel

Some personal personnel news: 👋 Hey, Megan here. Tomorrow is my last day on the Axios Climate Deals beat. It’s been an awesome ride, but I'm taking some time off to explore what's next for me. Thanks for reading, and a special thanks to all my talented colleagues. Stay in touch!

🫶🏻 Megan will miss all of her Axios colleagues immensely. She's planning to spend most of her newfound free time outside — as expected — around the desert and in the mountains with her partner and dogs.

👋 Happy trails and best wishes to Megan! She will be missed.

Thanks to Michael Flaherty and Phoebe Neidl for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and former colleagues.

May 04, 2023

1 big thing: Alternative fuels' state of play