Greenearth Energy enters agreement to develop CO2 to fuel conversion technology

Greenearth Energy (ASX:GER) has secured an exclusive worldwide research and licence agreement with Yeda Research and Development Co. Ltd. for a revolutionary technology that has the ability to convert carbon dioxide emissions into fuel.

The company has concluded negotiations with Yeda, the commercial arm of Israel’s Weizmann Institute of Science, and will assign the licence to subsidiary company NewCo2Fuels Ltd.

Greenearth Energy’s CO2 to fuel conversion technology has the potential to reduce emissions substantially utilising low cost generation facilities and resources while at the same time potentially offsetting substantial future power cost increases.

The technology concept, developed in Israel by Professor Jacob Karni and his group at the Weizmann Institute of Science, has been proven in laboratory trials.

Mark Miller, managing director of Greenearth Energy, said "We have been working with Professor Karni and the Weizmann Institute's commercialisation arm Yeda for the past 12 months to bring this project collaboration to fruition.

"We are both excited by the obvious and substantial potential that this project holds and honoured to work alongside a world class institute and team."

Greenearth believes the potential to turn global CO2 emissions into an opportunity by way of producing commercially viable fuel represents "a paradigm shift in the way society views and deals with one of our greatest challenges."

The technology has the potential to be "a viable alternative to CO2 sequestration and shift our thinking and approach to global CO2 emissions."

Greenearth Energy has taken the initiative to invest in the development of this breakthrough technology at a time when Australia is hotly debating a carbon tax.

Victoria’s energy mix is dominated by brown coal generation accounting for more that 90% of the States power and over 50% of its CO2 emissions.

The transaction documentation executed includes the research and licence agreement, an investment agreement for the establishment of a company in Israel to help develop the technology (to which the worldwide licence will be transferred) and a funding and option agreement with Erdi Fuels Pty Ltd.

The Technology 

The technology involves a new method of using concentrated solar energy for the dissociation of carbon dioxide (CO2) to carbon monoxide (CO) and oxygen (O2). The same system can also dissociate water (H2O) to hydrogen (H2) and oxygen (O2), at the same time it dissociates the CO2.

The CO, or the mixture of CO and H2 called Syngas, can then be used as gaseous fuel in power plants, or converted to liquid fuel such as methanol.

Impressively, the fuel has the potential to be stored, transported and used in motor vehicles and the oxygen produced can be used in the combustion of the clean fuel, or elsewhere.

Greenearth said the key to delivering low cost clean fuel is a highly efficient process of converting solar radiation to chemical potential in the form of fuel.

The technology process is aimed at achieving this goal. The source of carbon dioxide for the process could be existing power plants, cement factories and other emitting industries.

The fuel produced could potentially be recycled back into the plant from which it was created or be utilized as transportation fuel. By doing this the plants could substantially reduce the CO2 emissions.

Funding

Greenearth Energy's subsidiary company NewCo2Fuels Pty Ltd will fund the development of the project from the laboratory into the field.

Research will be performed under the supervision of Professor Karni, utilizing the Weizmann Institute’s world class solar tower and solar field facilities to generate fuel with the energy input being concentrated solar energy.

Funding for the initial stage of the project (US$5.5 million) will be generated by way of a combination of a placement in Greenearth Energy to Erdi Fuels Pty Ltd for 10% of the company's issued capital (being 8,093,297 shares at $0.1171 each, representing a $0.0511 or 77.42% premium to the share price as at 29 June 2011) and an option payment by Erdi Fuels Pty Ltd.

The option is for the acquisition of the shares of NewCo2Fuels, the licensee (following assignment) of the worldwide rights to the technology, should the project prove commercially viable, in return for which Greenearth Energy and its subsidiaries will receive a substantial capital sum and an ongoing royalty stream from future product sales.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/17528/greenearth-energy-enters-agreement-to-develop-co2-to-fuel-conversion-technology-17528.html