Q&A: Oberon Looks Ahead to 2023 after 'Exciting' 2022

(Argus Media) California-based Oberon Fuels became the first company to produce and start selling the first-ever commercial volumes of renewable DME over the past two years. The company has grand plans to expand and help the LPG industry to decarbonise in the coming years, either by offering renewable DME as an alternative to LPG or as a hydrogen carrier utilising existing LPG infrastructure. Argus' Waldemar Jaszczyk spoke with Oberon's president and chief executive Rebecca Boudreaux to discuss an eventful past year for the company and its plans for 2023:

Last year was a very exciting year for Oberon Fuels. We have been on this journey for 12 years now. All of the foundational work has been laid in technology, regulatory and market development, leading to some exciting milestones in 2022. Three years ago, we won our first investment from California, which catalysed the global adoption of DME to decarbonise the LPG industry.

In 2020, Suburban Propane became the first company in the world to invest in renewable DME production through Oberon. And then, in 2021, Oberon started producing renewable DME for the first time in the US, and we also announced the first global partnership with Lipigas in Chile. So that all led to 2022, when we saw the first commercial sales of Oberon's renewable DME.

This blended product has been sold and used in forklifts as well as on-road vehicles in California. And we are looking forward to seeing more production milestones in other global partnerships in the next few months.

Our production facility, the Maverick Innovation Centre, has a nameplate capacity of 4,500 USG/d of renewable DME. And we will be deploying the first renewable DME to renewable hydrogen reformer in the world in 2023, also at our Maverick Innovation Centre.

We expect to announce the location of three to five more production facilities this year. This is a journey of not just making renewable DME but also continuing to drive down the carbon intensity of the product. Today, our renewable DME is ultra-low carbon, but we are starting to make carbon-neutral or even carbon-negative renewable DME. We are very excited as we continue to drive down the carbon content of our product.

When we started 12 years ago, there was no regulatory framework for DME as a fuel because it had not been used before for that purpose. That is where we began our journey because it was not just about developing our technology. We needed the regulations in place to be able to legally sell it and utilise it as well as create a market for it in multiple areas. In 2015, California changed the code of regulations to include DME to be legally sold in the state. Oberon led that effort by creating a consensus standard with [US-based technical standards body] ASTM International. In 2020, California passed legislation to give equal tax treatment to DME as to LPG. We have worked closely with the regulatory agencies to navigate these issues.

Has your international visibility resulted in new overseas LPG partnerships?

In 2021, we announced our partnership with Lipigas. We are shipping renewable DME to them and looking for opportunities to work with them. There is ongoing testing for home appliances and forklifts. We just sent another batch of fuel to them. So stay tuned — in the next three months, we will be making more announcements on the global front.

Why do you think renewable DME will allow the LPG industry to enter the hydrogen market?

The LPG industry is really a compressed gas industry that has safely handled and transported LPG for about a century. So it has the ability to utilise its existing infrastructure, safety protocols and a global workforce of millions to move renewable DME, and by moving that product, moving renewable hydrogen. Leveraging the global LPG infrastructure to move renewable DME, and therefore renewable hydrogen, is a very cost-effective way. We do not have to reinvent the wheel, we can leverage the knowledge of the entire industry and workforce to accelerate renewable hydrogen deployment.

Our first renewable DME to renewable hydrogen reformer will come on line this year, and it will produce 1 t/d of renewable hydrogen. That reformer is in fabrication right now. This gives us an opportunity to [move into off-grid areas] and find other ways to make renewable hydrogen wherever it is needed. You can have renewable hydrogen production via DME, which is easy to transport and store. As we look at the future of renewable hydrogen production, we anticipate that our reformers will produce 5-10 t/d. And that will increase as the market for heavy-duty vehicle hydrogen fuel cell electric takes off. We also aim to increase renewable DME production to 500,000 t/yr by 2027.

Governments, particularly in the US and Europe, have been very supportive of hydrogen. In the US, the Inflation Reduction Act provided additional incentives for hydrogen production. So there is support at both the federal level and state level in California with the low-carbon fuel standard, which supports renewable fuels that reduce the carbon intensity of the product.

Yes. As we go into 2023, we will be bringing in new investment partners. So we look forward to announcing who those partners are later in the year. READ MORE