Carbon Capture's First SPAC?

CCUS Intentions for New SPAC

Last week, CO2 Energy Transition Corp filed an S-1 with the intention to acquire a business in the carbon capture, utilization, and storage industry. Many other SPACs have been formed around climate technology and energy transition; however, this is the first for CCUS.

With $80 million in funding from EF Hutton, the company could pursue different types of assets across carbon capture. This could include a wide array of assets, like:

• Capture technology and new ventures collaborating to decarbonize specific industries. The DOE recently announced funding for carbon capture firms focusing on steel, ethanol, hydrogen, and other applications.
• CO2 transportation infrastructure in emerging carbon hubs. CO2 transportation, like pipelines, presents an immediate opportunity in Wyoming, North Dakota, Midwest, Permian, and Gulf Coast regions.
• Utilization techniques that are in the lab or have achieved pilot scale applications. This would be less likely avenue; however, utilization for SAF and other low-carbon fuels gained traction in the last year and investment continues across the value chain.
• Sequestration wells as permitted Class II or Class VI wells. Carbon sequestration permits are at a premium due to the backlog of EPA Class VI well permits. Class II wells with the appropriate MRV plan may allow the company to qualify for 45Q tax credits.
• Land and pore space rights for future carbon sequestration and storage. Each state is unique at the moment but opportunities exist for surface and mineral owners to sell their interests.

We'll come back to CO2 Energy Transition Corp in the coming weeks.

SPAC Success in Energy

Deal sizes for SPACs have gotten smaller in general, according to SPACResearch. Yet, in Energy there have been multiple billion dollar acquisitions. X-energy, NET Power, and Hammerhead Resources are the notable transactions but there have been several others across the energy sector.

Other recent Energy SPACs include:

• BurTech Acquisition Corp announces intent to acquire CleanBay at $330 million valuation
• Rice Acquisition Corp's acquisition of NET Power for US$1,459 million
• ROC Energy Acquisition Corp's acquisition of Drilling Tools International for US$319 million
• HNR Acquisition of Pogo Resources, transaction amount not disclosed
• M3-Brigade Acquisition III Corp. Announced US$950 million business combination with Greenfire Resources Inc
• Ares Acquisition Corporation acquisition of X-Energy for US$2,214 million
• Roth CH Acquisition IV Co. business combination with Tigo Energy for US$599 million
• Industrial Tech Acquisitions II, Inc. combined with NEXT RenewableFuels for US$530 million
• Decarbonization Plus Acquisition Corporation IV US$1,390 million acquisition of Hammerhead Resources

Inside this Issue

🚧 Navigator CO2 Expands Scope of Heartland Greenway with Updated ICC Permit Filing
💰 BurTech Acquisition Corp. and CleanBay Renewables Announce Letter of Intent for a Business Combination
🚢 Chevron Announces Lower Carbon LNG Fleet Modification Project With Sembcorp Marine
🏦 U.S. Department of State, Bezos Earth Fund, and The Rockefeller Foundation Convene Energy Transition Accelerator High-Level Consultative Group