Australia-based clean technology company, Vivid Technologies Limited gets global traction for its technology to convert CO2 into commercially viable fuel sources. It explains the prospective funding opportunity the company has secured from new global partners for commercialisation of its innovative clean technology, NewCO2Fuels.
In the announcement dated 18 March 2019, Vivid Technologies Limited (ASX: VIV) announced that it has inked two-term sheet with partners outside of China who would support the required capital of ~USD$15 million to facilitate the commercialisation of the technology over a 24-month period and get ready for large scale production. As per the company’s information, one term sheet includes a direct equity investment into the NCF entity from a multi-billion-dollar fund while the other sheet has been signed with a subsidiary of an overseas listed entity that would be looking to acquire rights for the technology across specific regions. However, both the term sheets are subject to the satisfaction of several conditions.
These additional commercialisation opportunities are prospective to strengthens the company’s current funding structure that is strongly based on the commercialisation agreement with Sinopec Engineering Group (SEG), signed in 2018. While the near-term commercialisation with SEG remains the heart of its funding strategy, Vivid is progressing technology due diligence with additional commercialisation partner for regions outside of China.
The growing interest of entities in the company’s clean technology solutions underscores the guidelines by global regulators towards the reduction of carbon dioxide (CO2) emission mostly generated by industrial corporations and LNG & gas producers. More importantly, under the Paris Agreement, the per capita reduction of CO2 emissions required for Australia is more substantial than any other developed nation.
NCF is one of the technologies focused on Carbon Capture Utilisation (CCU) that takes excess carbon dioxide from its generating source and turns it into a viable product, be that fuel or other products. NCF’s core technology efficiently produces synthesis gas (‘syngas’) from carbon dioxide (CO2) and water (H2O) by using a one-step high temperature ‘CO2 dissociation’ process. This reaction is a combination of photoelectric, thermal, electric and chemical processes combining heat and electricity.
The technology has the potential to cut down pressures on Australian corporates who involved in the exploration and production of hydrocarbons are required to disclose their commitment to reducing CO2 in alignment with their relevant countries overarching COP21 commitment.
With the global focus significantly increasing on the need for industry on CO2 reduction, particularly fossil fuel-based industries, the company stated that NCF is well placed with its technology to convert CO2 to commercially viable fuel sources.
Vivid Technology holds 50% of NCF Global, which is currently negotiating to lift its stake in NCF from 67% to circa 80% based off prior funding previously provided by NCF Global to NewCO2Fuels Ltd.
VIV last traded at its 52-week low of $0.023. On 18 March 2019, the stock traded flat with a daily volume change of 129,212 shares. Over the past 12 months, the stock has declined by 56.06% including a negative price change of 28.13% in the past three months.