FREQUENTLY ASKED QUESTIONS

Q: What is the challenge of our time?

A: To decarbonize our society. It is disrupting all industrial sectors from transport to energy to heavy industries like cement and steel. It is not only a technology challenge, an industrial footprint challenge but also a financial challenge. And, it is the balancing of all those three which is the biggest challenge!

Q: Why are you launching this Project during this Pandemic?

A: The global pandemic Covid-19 has revealed just how interconnected and fragile how our life, our economy and our environment are. Human activity has altered virtually every part of the planet. As we pave over, build, pollute, we are destroying vital ecosystems including the air we breathe and the oceans – both critical to sustaining life on Earth.

Billions of people, helpless and fearful, around the world, continue to remain in the “greatest lockdown” in history, while millions suffer and die from the virus. But as we slowly emerge from this tragedy, we must understand that the better we manage our environment, energy needs, and economy, the better we will manage our health to prevent future pandemic. We need a circular economy that sustains the health of our planet and people. SGH2’s game changing economy provides the missing link: pollution free hydrogen from waste.

There is clear and compelling evidence of the direct connection between air pollution and higher Covid-19 death rates. In an analysis of 3, 080 counties in the United States, researchers at Harvard University’s School of Public Health found that higher levels of the tiny, dangerous particles known as PM 2.5 caused by burning fossil fuels, and contained in industrial and transport emissions, were associated with higher rates of death from the disease. These are also the emissions that are warming our planet. With the exponential rise of greenhouse gases like carbon dioxide and methane created by the power and transport sector, our health is being attacked by the air we breathe, the food we eat, and the extreme weather changes inducing drought, hurricanes and ocean acidification affecting our food supply.

As a physician and a biophysicist, I also recognize that reducing waste, and plastics in particular which are non-degradable, pollute our oceans and waterways, and threaten our health and ecosystems, is critical to creating a healthy circular economy.

I have spent my life researching and developing technical solutions to address these two seemingly disconnected problems: decarbonizing our energy sources and managing our waste & plastic pollution. And it now appears that we have found the missing link: hydrogen. With energy density that is 5 X that of coal and 3X that of natural gas, hydrogen can be used to decarbonize even the hardest-to-abate sectors. Hydrogen can replace gasoline and diesel in the transport sector, replace natural gas in pipelines for home heating and power generation, as well as replace coal in cement kilns and steel electric arc furnaces. It is a ubiquitous source of energy that can be used without production of green house gases, but, best of all, it can be produced from the gasification of waste and plastics providing a PERFECT Circular Economy. And it is economically viable. It is cost competitive with the dirtiest hydrogen on the market today.

During lockdown, we all watched as the skies cleared. People in Los Angeles saw the mountains for the first time in decades. The effects of not burning fossil fuels were immediate. I create SGH2 Energy in order to launch the world’s largest green hydrogen facility in California. This facility will showcase a perfect circular economy, and prove we can clean up our air, reduce waste, decarbonize our world and grow our economy at the same time.

Q: What is the origin of SGH2 technology?

A: This IS rocket science. Our technology was invented by NASA scientist Dr. Salvador Camacho, “the father of plasma technology;” and Dr. Robert T. Do, a biophysicist, medical doctor and entrepreneur. Dr. Camacho developed the high-temperature plasma torch to test heat shields at NASA. Without his invention, there would have been no way to guarantee the safe re-entry of NASA astronauts into Earth’s atmosphere.

Dr. Do and Dr. Camacho originally created Solena Group to use their proprietary Plasma Pyrolysis Vitrification (PPV) technology for the treatment and safe disposal of hazardous waste. This technology was subsequently improved and optimized by Dr. Do and Dr. Sylvain Motycka, SGH2 Chief Technology Officer, into SGH2’s Solena Plasma Enhanced Gasification (SPEG) process to produce green hydrogen from waste feedstocks.

Over three decades, we have developed a unique, energy efficient patented technology that uses very high-temperature (3500-4000 C) plasma torches, which we optimize by mixing in oxygen-enriched gas. The high temperature causes the complete molecular dissociation of all hydrocarbons. The molecules bound into a quality hydrogen-rich biosyngas free of tar, soot and heavy metal. The syngas then goes through a Pressure Swing Absorber (PSA) system resulting in hydrogen at 99.9999% purity as required for use in Proton Exchange Membrane (PEM) fuel cell vehicles. Our process extracts all carbon from the waste feedstock, removes all particulates and acid gases, and produces no toxins or pollution. The end result is high purity hydrogen and a small amount of biogenic carbon dioxide, which is not additive to greenhouse gas emissions.

Q: Can SGH2 technology use any waste?

A: Our very high (3500 °C - 4000 °C) operating temperature means we can process any kind of waste – from plastic to car tires to hazardous medical waste. In fact, we originally developed this technology to deal with medical waste. However, as our objective is to produce the maximum amount of green hydrogen, we pre-select our feedstock to ensure the highest amount of biogenic hydrocarbons with maximum energy content in order to produce 100% renewable hydrogen. We need a minimum of 4000° kcal/kg (or 16 mj/kg) with less than 25% moisture content to have the desired syngas and hydrogen content, which is consistent with recycled mixed paper or post sorted municipal solid waste, typically referred to as refuse derived fuel (RDF).

Q: Does the waste SGH2 uses need to be preprocessed?

A: Our technology can process all solid waste materials – without any presorting or processing. However, to ensure stable operational functioning of the plant and the production of green hydrogen, we will have the materials shredded before feeding into the gasifier.

For our Lancaster project, we will use recycled mixed paper waste. This material will already have been sorted at the source — that is, put in recycling bins in homes and businesses — and then taken to a material recovery facility, where it will have been further sorted, shredded, and baled. This is the standard process for recycled materials. Those bales used to be shipped to China, but in 2018, China banned the import of recycled waste materials. As a result, countless bales of recycled material across the country — and the world — have nowhere to go, and are being stored or dumped back into landfills, undermining recycling efforts.

In Lancaster, the city will deliver these baled materials to our facility. We will not charge the city for disposing of these materials. The Lancaster plant will process 40,000 tons of waste annually, saving the city between $50 to $75 per ton annually in landfilling and landfill space costs.

Q: Can your production process be qualified as totally emissions- and carbon-free?

A: The short answer is yes. We are totally green — totally carbon free. In fact our process is greener than green because our hydrogen has a negative carbon intensity (CI): -188 kg CO2eq/kg of hydrogen). Our hydrogen generates more carbon dioxide and Low Carbon Fuel Standard credits than hydrogen produced from the electrolysis of water by 100% renewable power. The Lancaster plant is carbon neutral, and is clean and free of toxic emissions, as well.

There are two types of pollution: greenhouse gas emissions that cause global warming, and standard emissions that cause air pollution. We don’t produce either. In fact, we do the opposite.

Our production process actually removes greenhouse gas emissions from the Earth. Because the feedstocks we use to produce hydrogen come from a biogenic source (e.g. recycled mixed paper), our hydrogen has a negative carbon intensity of -188 kgCO2eq/kg of hydrogen (explained below). We are greener than green!

We are classified as a net-zero-carbon plant.

We are cleaner than clean! Because our plant is a closed-loop gasification plant that converts waste feedstocks into reusable gas that is collected, there are no emissions of pollution. We produce no carcinogens (semi-volatile organic compounds like flue gas, fly ash, toxic bottom ash, dioxins or furans) and no sulfur dioxides or nitrogen oxides (SOx or NOx).

Q: What does “biogenic” mean?

A: The California Air Resources Board, which is the state’s preeminent governmental agency when it comes to carbon emissions, has determined that our carbon emissions are not additive, because this carbon is not new carbon. We are not digging up fossil fuels and burning them; that would add to carbon emissions. Rather, we are gasifying carbon that is already part of the ecosystem. It is carbon that is already released; we are just reusing it. In addition, because our process removes the very potent greenhouse gas methane from the ecosystem by gasifying waste, it serves as a carbon sink, because our hydrogen has a negative carbon intensity.

Q: What are the useful outputs from the SGH2 process?

A: The principal output is green hydrogen, which can be used as a zero-carbon fuel for fuel cell cars, buses and trains, among other uses.

The plant will generate a small amount of:

Renewable power: Extra biosyngas from the process will produce approximately 3.5 MW of renewable power on site, to ensure that the facility does not need to import power.
Inert slag: Generated from any inorganic waste in the feedstocks (like glass, metal or dirt, which should be less than 0.5% of our recycled mixed paper feedstocks), this slag can be used or sold as construction aggregate.
Steam: Heat generated in the plant will be used internally to support the operation of the gasifier oxygen absorber units, which do not require electricity to operate.
Sulfur cake/salt: Chemicals generated in small quantities will be sold.

Q: Most waste incinerators or gasifiers produce toxic byproducts and gases. How does SGH2 differ?

A: We have a closed-loop system that gasifies waste instead of burning it. This is an important distinction. And unlike other methods, our process gasifies at such high operating temperatures (3500°- 4000° C) that it breaks materials into individual molecular compounds, which then bound into a very high quality hydrogen-rich biosyngas free of tar, soot and heavy metals. Our process extracts all carbon from the waste feedstock, removes all particulates and acid gases, and produces no toxins or pollution. Other companies gasifying waste use a much lower temperature, and, as a result, they produce toxins like flue gas, fly ask, toxic bottom ash, dioxins and furans, as well as NOx and SOx and a very low quality syngas.

When our process uses feedstock containing plastic, tires, or any other waste containing chlorine or sulfur, then once the syngas leaves the gasifier, any chlorine or sulfur will bind with hydrogen to form hydrogen chloride or hydrogen sulphide. These acid gases can be scrubbed out as NACL (salt) or sulfur cake to be sold.

No other waste gasifier is specifically designed and optimized to produce large amounts of hydrogen at competitive pricing. Other systems result in dirty syngas laden with tars, and produce noxious gases and air pollution.

After we purify the hydrogen, any carbon dioxide generated in off-gassing will be released. But as it is biogenic, it is net-zero carbon. This differentiates it from carbon dioxide generated by burning fossil fuels (natural gas, coal and oil), which adds to carbon dioxide accumulating in the atmosphere and contributes to climate warming.

Q: Waste and landfills are a huge global problem. How can SGH2 help?

A: SGH2 facilities are considered zero-landfill solutions. Once waste is processed in an SGH2 facility, there is no resulting waste that needs to be taken to landfills. In contrast, standard waste incinerators generally end up turning about 20% of their waste into toxic bottom ash, which is sent to landfills for disposal.

As demand for green hydrogen increases globally, more and more SGH2 facilities can be built on a distributed modular basis near major towns and cities, where they can reduce the amount of waste sent to landfills while also providing carbon-free fuel.

Q: Waste companies have been recycling for years now. Why is waste upcycling better?

A: Recycling materials – whether paper or plastics – must be shipped as raw materials to large-scale manufacturers to make new products. Most major developed countries have stopped manufacturing these products, and for years outsourced the job to countries like China. When China banned the import of recycled materials in 2018, the market for recycled waste collapsed. As a result, millions of tons of recycled materials are being stored or landfilled.

Upcycling — using recycled materials to produce higher-value products such as hydrogen — is one promising way to help the recycling industry utilize millions of tons of recycled materials now stuck throughout the world with nowhere to go.

Q: Waste recycling is big business. What are the economics of upcycling vs. recycling?

A: Waste recycling business used to be a big business, but since China banned the import of recycled materials with over 0.5% contamination — a standard which is very hard for recyclers to achieve — the market has fallen off a cliff. Nonetheless, recyclers get paid by municipalities to collect recycled bins of mixed paper and mixed plastics, sort them into bales, and either store the bales until a buyer can be found or landfill them when their storage areas fill up. Recyclers are losing about 50% of their revenues normally generated from the sale of materials. Landfills typically charge a gate or tipping fee for every ton of waste landfilled. This covers all waste, and often recyclers and/or municipalities are charged to landfill bales of recycled materials.

Our process is a win-win for municipalities, recyclers, citizens and the world. We take waste at no charge, save cities landfilling costs, and sell clean, carbon-free fuel, which can provide cities with additional revenue.

Q: You say you are the largest green hydrogen production facility in the world, but didn’t Japan just open the largest green hydrogen production facility in the world? What about Australia’s recent announcement? And what about the Netherlands offshore wind-to-green-hydrogen project that seems much larger than yours?

A: All three projects use electrolysis and renewable energy to produce green hydrogen. That means they can only operate at up to 30% capacity, because renewable energy is intermittent. Our plant operates at 96 percent capacity. That means we will operate three times more hours per year, producing three times as much hydrogen. In addition, green hydrogen produced with electrolysis and renewable energy cannot compete with our hydrogen in price or carbon reductions.

The Asian Renewable Energy Hub is a series of plants, not one facility, which together they say will produce an enormous amount (12 GW) of green hydrogen annually. There are several serious barriers to the realization of this very aspirational project and its promised output. 1) It requires an enormous amount of purified water, which is expensive and a scarce resource; 2) It requires an enormous amount of renewable energy, which is expensive and intermittent; 3)It requires an enormous amount of land; 4) It requires enormous and complicated engineering, permitting and other time consuming and costly steps.; 5)It requires billions of dollars in investment. Ours requires only waste, a small footprint (5 acres) and 55 million investment. Our plant produces the energy it requires, does not use water, and has the funding partners at the table.

We hope they can realize their dream - but having worked in this field for over a decade, we know that there is a big difference between a dream and reality. That’s why we have developed, vetted and are building facilities that produce outsized results. Our plants, modularly designed to scale, annually produce more hydrogen than any other green hydrogen plant anywhere in the world.. We can easily put hundreds of them together, call it a project, and beat the Asian Renewable Hub project's multiple plants output. The difference between theirs and ours, is that we can get it done. And we can get it done quickly, and cheaply

Q: What are the specific terms of the MOU? What does the City of Lancaster get out of it?

A: It is a win-win for Lancaster. The city supplies all the waste feedstock, and will no longer have to pay to landfill that waste or to ship it to China. We do not charge tipping fees. Lancaster’s goal is to be the world’s first net-zero city, and this project will take Lancaster a long way toward achieving that goal. The plant will employ 600 people during construction and 35 people to operate it, many of whom will come from the low-income neighborhood surrounding the plant.

Q: You say the city has joint ownership. Will it receive revenue generated from the project?

A: Yes, the City of Lancaster is joint owner and will receive revenue.

Q: What is your plant’s capacity with regard to fuel cell buses and cars?

A: We will produce 11 tons of green hydrogen per day, which will fuel 2200 fuel cell vehicles (FCVs) per day. Each FCV car will require five kilograms per fill-up, while each FCV bus will require 35 to 60 kg per fill-up.

Q: What is the unit size of each plant? Are the plants expandable?

A: The Lancaster plant capacity will use 120 tons (six trucks) of waste feedstock a day, or five tons per hour, operating 24/7/330 days per year and producing 40,000 tons of green hydrogen annually. The plant’s expected life is 20 years.

Our green hydrogen facilities are modular for easy on-site assembly. Additional modules can be added to increase capacity. Ideally, additional modules will be built near a waste source, decreasing transportation costs and truck traffic and providing a distributed network of sustainable green hydrogen facilities.

Q: Who are your target customers?

A: The Lancaster plant will produce hydrogen for the transportation sector. California has an existing and growing hydrogen infrastructure, with increasing hydrogen demand. We are in negotiations with the largest owners and operators of hydrogen refueling stations in California.

But the potential for hydrogen is huge, with a wide range of possible customers. We are exploring additional plants and future sales to utilities (including SoCalGas, a California natural gas company) that would replace natural gas with hydrogen; cement plants (including Heidelberg), and others. In addition, various transit agencies in the Los Angeles area have announced they will purchase up to 1000 new hydrogen buses for a 100% zero-emissions fleet. And San Bernardino just announced the commission of its first hydrogen train.

Q: Are you planning to scale Lancaster to meet demand?

A: Our hydrogen vision is to commission multiple distributed plants. The Lancaster plant will not expand production, but our consortium has secured a second five-acre site for our second plant in Palmdale. In addition to hydrogen vehicle-fueling customers, we will target cement plants and other heavy industries, which can substitute our hydrogen for the highly carbon-intensive fuels they usually use. We will also talk to natural gas companies, which can inject hydrogen into their pipelines.

Q: What is the timeline for the Lancaster project?

Pre-feed and feed phase (including permitting) - 12 months
Engineering procurement construction - 18 months
Start up & commissioning - 3 months
Anticipated operation start - Q1 2023

Q: Isn’t hydrogen dangerous?

A: This is a widely held misconception, perhaps because of the Hindenburg airship disaster in 1937. But that tragic event was the result of the extremely flammable material used for the dirigible skin, not the hydrogen itself. The hydrogen burned off above the passengers.

The fact is that hydrogen is safer than natural gas – which is ubiquitous in our homes and businesses. Hydrogen burns seven percent cooler than natural gas, and is four times more diffusive. Hydrogen has one-tenth the radiant heat of a hydrocarbon fire, and is 14 times lighter than air, so if it leaks, it disperses quickly.

Q: Isn’t hydrogen used in nuclear bombs?

A: That is a different molecule. Nuclear fission bombs use the rare isotope tritium. Hydrogen fuel is made of the common isotope protium. And nuclear fission bombs require tritium to reach 100 million degrees to explode.

Q: Isn’t transporting hydrogen the biggest challenge? How are you proposing to solve that?

A: Moving hydrogen is not easy. Hydrogen is a gas, and therefore faces the same challenges that natural gas faced originally. Like natural gas, hydrogen can be transported as compressed gas in tube trailers/tankers, or liquified (like liquefied natural gas), or transported in dedicated hydrogen pipelines, like those built in Louisiana.

Currently, for distances of less than 100 miles, hydrogen can be transported efficiently in compressed gas form in tube trailers. This cost is estimated at U.S. $3 per kilogram. At the Lancaster plant, the customer will transport our green hydrogen to its southern California refueling stations in compressed gas tube trailers. Each trailer today can carry 1.5 tons at 500 bar pressure.

For hydrogen to become as ubiquitous as natural gas is today, there needs to be a coordinated program of infrastructure upgrades and construction to reduce the costs of liquefaction to make liquefied hydrogen for long-distance transport. Alternatively, hydrogen can be transported using the existing natural gas network; hydrogen can be injected into natural gas pipelines and recovered downstream where the hydrogen is needed. Both these technologies currently exist industrially, and will be lower in cost with increased scale and demand.

Q: How does hydrogen fuel cell car (FCV) fueling compare with fast-charging battery electric vehicles (BEVs)?

A: Hydrogen fuel cell cars (FCV) are refueled in the same amount of time as gasoline vehicles. Today, fast-charging BEVs take 45 minutes to recharge.

With the advancement and commercialization of fuel-cell-based transportation systems, hydrogen is becoming the fuel of choice for major car manufacturers due to its (1) compact and lightweight nature, (2) fast fueling in a matter of a few minutes, and (3) capacity to provide enough electric power to support ranges of up to 500 miles.

As an energy carrier, hydrogen has an energy density of 40 kWh/kg, while diesel and liquefied petroleum gas have energy densities of 13 kWh/kg and battery-based systems are at 0.05 kWh/kg. This factor makes battery-based systems 800 times less favorable than hydrogen per kilogram as an energy carrier, and the difference becomes more pronounced in medium- and heavy-transportation loads.

Q: Elon Musk claims that fuel cell vehicles will not be able to compete with battery electric vehicles. Considering his experience and expertise, is he wrong?

A: Transportation represents 23% of carbon dioxide emissions globally. Tesla has made great advances in the electrification of light-duty vehicles. However, there are serious challenges (heavy battery weight, limited range, etc.) to battery electrification of heavy transportation like long-range trucks, buses, trains and shipping. There is a gap that can and must be filled by hydrogen, which does not have the same challenges.

Fuel cell vehicles (FCVs) are now being developed specifically for the heavy transportation sectors, with large FCVs for trucking (NIKOLA, Hyundai and Toyota), trains (Alstom), buses (numerous companies from Poland, France, China to UK and Japan) and shipping (Norway). In all these cases, battery electric vehicles are not being considered as viable options.

As for light-duty transport, there will be a need for both BEVs and FCVs due to the limitations of the electrical grid. Some of the largest carmakers (Toyota, Hyundai, BMW, VW) are moving aggressively into both markets. With the rollout of hydrogen refueling station infrastructure in many countries (Germany, Japan, Korea, US/California), the popularity of FCVs will increase dramatically. California is forecasted to have 100,000 FCVs on its roads by 2030.

Q: Cleantech technologies often have scale-up risk. How will SGH2 address this?

A: SGH2’s patented Solena Plasma Enhanced Gasification (SPEG) technology was successfully demonstrated at full commercial scale at a demo facility in Madison, PA, for several years, treating and processing all types of waste feedstocks. The Lancaster plant will deploy a SPEG plant of the same size as the demo plant, with a capacity of five tons per hour. So there is no scale-up risk. All upstream and downstream equipment is standard industrial equipment. In addition, our stacked modular design is built for rapid scale and linear distributed expansion, at lower capital costs, and on a fraction of the land size required by other green hydrogen facilities reliant on large scale solar and wind farms. All engineering and construction is standardized and quality assured, performed through collaboration with the largest engineering, procuring and construction (EPC) companies in the world such as Fluor Group.

Q: Who are SGH2’s funders?

A: SGH2‘s holding company, Solena Group, Inc., raised over U.S. $50 million to develop the SPEG technology over two decades. The technology is licensed to SGH2 exclusively.

Q: Who is funding the Lancaster plant?

A: Our plans for financing are still in progress but will likely include SGH2 Energy seeking project financing from lenders active in the renewables market in the US.

Q: What is Solena Group’s corporate structure? How is SGH2 structured?

A: Solena Group, Inc., is a privately owned corporation registered in Delaware, and its shareholders include its management team and a few institutional investors. SGH2 Energy Global LLC is a limited liability corporation registered in Florida and in California, and is majority owned by Solena Group along with a few individual shareholders/investors. SGH2 Energy has the exclusive license to develop, build and own green hydrogen projects globally, and will own the Lancaster facility via a Special Purpose Entity called SGH2 Lancaster LLC with third party investors.

Q: What are your expansion plans?

A: Our global rollout plans are focused initially on Australia, the E.U. and Asia. In the U.S., we may launch more plants in California in the near term, including projects in Palmdale and Richmond.

Q: You had a deal with British Airways that fell through. Why?

A: After conducting a yearlong technical and financial feasibility study, British Airways signed a $600 million dollar contract with us to supply jet fuel using SPEG technology; the syngas would be used to produce bio jet fuel utilizing a Fischer-Tropsch system. The project was vetted and approved by the US Export-Import Bank, which issued a letter of intent to provide a U.S. $475 million loan. But the contract was contingent on a high West Texas Intermediate (WTI) benchmark oil price of $100 per barrel, and was voided when the WTI dropped below $25 per barrel.

Q: You say ocean plastics are preventing the oceans from absorbing greenhouse gases -- how?

A: As reported in Green Biz, microscopic plants and animals called phytoplankton and zooplankton live in the ocean and perform a critical service for human survival: they sequester carbon dioxide. These plankton have an appetite for plastic and the petrochemicals in them. But plastic interferes with plankton’s metabolism, reproductive abilities, and survival, and diminishes its ability to act as a carbon sink.

Q: Oil prices are plummeting. How does that affect your price point?

A: Green hydrogen is not a traded commodity, like jet fuel and oil, and therefore is not subject to the volatility of oil. The recent oil price crash demonstrates oil’s volatility and underscores the stable and growing value of hydrogen.

There are a number of reasons why the fossil fuel sector will have difficulty seeking the financing even when prices rebound:

Worldwide forces for decarbonization are strong and growing stronger, as evidenced by BlackRock and other major institutions in the process of divesting.
Carbon-free energy has decoupled from the oil and gas sector.
The oil and gas sector is recognizing the need to accelerate the transition to carbon-free energy and the prospect of stranded assets.
Oil and gas exploration assets are too expensive at prices below U.S. $30 a barrel.
Shareholder pressure and public opinion are focusing executives’ attention on future liability issues.

Hydrogen – especially SGH2’s hydrogen, which is greener and cheaper than any other green hydrogen – is ideally positioned to move into this space.