Decarbonization | Wilson Sonsini

According to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), total anthropogenic emissions continue to rise in all major groups of greenhouse gases, reaching the highest ten-year average record from 2010 to 2019. Despite this alarming trend, year-over-year emissions growth has slowed in the past decade compared to the previous decade, in part due to advances and deployment of technologies low, zero or net negative carbon.

In the second half of 2020 and the first half of 2021, venture capital and private equity investors invested more than $87 billion in Climatetech, according to PwC, a 210% increase from the 12 immediately preceding month. Governments have responded by adopting a multitude of climate-related policies, budgetary authorities, credits and loan guarantees, as well as injecting decarbonization priorities into various programs.

While the explosion of interest in decarbonization efforts is recent, for more than 15 years Wilson Sonsini has been helping companies, investors and lenders seeking value-added legal services to structure, negotiate and close deals. breakthroughs to develop, commercialize, finance and deploy technologies and projects that decarbonize businesses and various sectors of the global economy, including industrial facilities, farms, the built environment and transportation.

In keeping with the firm’s pedigree of supporting promising and innovative companies throughout their life cycle and bringing an entrepreneurial and hands-on approach to the practice of law, our interdisciplinary, dedicated and mission-driven team supports clients in the vanguard of the energy transition, the sustainability revolution and the development of the climate economy.

Strategic joint ventures to decarbonize industry, transport fuel and agriculture

Wilson Sonsini has advised and supported clients decarbonizing industrial facilities, transportation fuel and agriculture in some of the largest and most groundbreaking transactions of the past decade. For example:

  • In 2011, we advised LanzaTech, a developer of proprietary technology for converting flue gases from industrial facilities into liquid transportation fuels and chemicals, through its joint venture with Baosteel. This first commercial technology deployment paved the way for the company’s continued success and the production of sustainable aviation fuels and various chemicals through carbon recycling.
  • In 2012, we helped POET, LLCa leading producer of advanced biofuels, in the formation of a $250 million 50-50 joint venture with Royal DSM to develop Project Liberty, one of the first cellulosic ethanol plants in the commercial scale in the world.

Building on these agreements, today we leverage our extensive expertise in project development, project financing (including 45Q tax equity financing), DOE loan guarantees, joint ventures, co -industrial settlements and the ethanol and CCUS industries in our work in several United States. -projects based on zero-emission industrial facilities using new technologies are co-located with industrial facilities. These projects will generate clean energy, industrial outputs or green chemicals; capture all the CO2 from the process; and sequester CO2 in class VI wells.

Additionally, Wilson Sonsini supports clients at the crossroads of decarbonizing transportation fuels and agricultural processes, as exemplified by our assistance to some of the early developers of anaerobic digestion projects that produce ultra-low renewable natural gas (RNG). carbon intensity. This includes our representation of Chevron in its strategic joint venture with Luminous mark to fund dozens of projects nationwide and purchase the RNG levy for use as transportation fuel in California, facilitating compliance with the Federal Renewable Fuel Standard and the California Low Carbon Fuel Standard.

Financing and deployment of new technologies for industrial decarbonization

Our attorneys have helped clients structure and finance first-of-its-kind carbon capture and utilization projects co-located with existing industrial facilities, as evidenced by our work as project and capital finance advisors. -risk for Skyonic (now CarbonFree Chemicals), where we advised on an $80 million sale-leaseback financing for the company’s first commercial project incorporating its proprietary SkyMine® process and co-located with Capitol Aggregates cement in San Antonio, Texas . The project captures approximately 50,000 tonnes of CO2 from cement fumes and recycles it into sodium bicarbonate.

We provide similar assistance to technology start-ups by advising on business, project structuring, tax (including 45Q project structuring) and intellectual property issues as part of the initial deployment of proprietary technologies that capture the carbon dioxide generated during the industrial production process. The captured CO2 can be sequestered or used in various applications, resulting in a carbon-free product with the same chemical composition and performance characteristics as their carbon-based counterparts. In some cases, these products can also capture CO2 from combustion gases or directly from the atmosphere.

Representation on the investor side

Wilson Sonsini has extensive experience representing venture capital, private equity, family office and strategic investors in the valuation of existing business, technology and project assets, and this extends investors in climate technology and decarbonization projects. Examples include:

  • Advising a venture capital fund affiliated with a major foreign gas company in its investment and joint business development agreement with a direct air capture (DAC) start-up; and
  • Representing SDCL Energy Efficiency Income Trust (SEEIT) in connection with its acquisition of a 50% interest in a portfolio of approximately 290 MW of behind-the-fence base load generation assets located at two Indiana steel mills, which significantly reduce GHG emissions from factories and generate environmental attributes equivalent to more than 530 MW a solar installation and a wind installation of more than 370 MW.

Business decarbonization

Wilson Sonsini’s unrivaled track record advising over 300 public companies includes advising on implementing ESG policies and adapting to new SEC rules on climate risk disclosure. To help them achieve their decarbonization goals, we have also advised numerous public companies, including Google, Amazon, and Selling power—on their early renewable energy supply strategies, corporate power purchase agreements, and obtaining market-based rate authority from FERC.

  • We have worked with clients on groundbreaking onsite solar and energy storage projects, offsite power purchase agreements, “virtual” power purchase agreements, renewable energy certificates and carbon offset transactions, green pricing transactions and tax fairness investments.
  • Since 2010, we have worked hand-in-hand with our clients’ ESG and energy sourcing teams as they use their buying power to create economically viable contracting approaches, overcome regulatory hurdles and drive the market to create energy products aligned with companies’ ESG implementation needs.

Risk financing

Wilson Sonsini is synonymous with venture capital-backed decarbonization new technology start-ups, where our attorneys provide the full range of legal services to our clients, including advice on new and innovative business deals to support their businesses.

This is evidenced by our representation of Legacy, a direct air capture company, in one of the largest private financings of a direct air capture startup to date, a $53 million Series A funding round dollars co-led by Carbon Direct Capital Management, Ahren Innovation Capital, Breakthrough Energy Ventures and The Microsoft Climate Innovation Fund as an additional participant. We’ve also advised one-off carbon-off deals with companies such as Shopify.

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