GenZero, a decarbonisation-focused investment platform wholly owned by Temasek, has backed the $50-million investment round in CleanJoule, a US-based startup focused on the production of sustainable aviation fuel (SAF).
The funding round was led by US private equity firm Indigo Partners and also participated by PE investor Cleanhill Partners and three airlines – Frontier Airlines, Wizz Air, and Volaris.
CleanJoule, headquartered in Salt Lake City, Utah, said it will use the fresh funding to produce high-performance SAF from agricultural residues and other waste biomass more cost-effectively.
The three investing airlines have agreed to purchase up to 90 million gallons of SAF, a biofuel used to power commercial aircraft but with a smaller carbon footprint from, CleanJoule, according to the announcement.
The principals of Indigo Partners will also receive a board seat on CleanJoule’s Board of Directors as part of the investment.
Decarbonising aviation requires solutions that can be adopted at scale, according to GenZero CEO Frederick Teo.
“CleanJoule’s fuel technology relies on widely available feedstock – agricultural waste – to produce a sustainable biofuel that could be cost-effective at scale with better fuel economy,” Teo said.
GenZero was launched by Temasek in June last year as an investment platform dedicated to accelerating decarbonisation globally. Temasek committed an initial amount of S$5 billion (about $3.6 billion) to establish the company.
The platform is looking to developments in green energy such as sustainable aviation fuels. GenZero also invests with third-party funds and collaborate with like-minded partners to expand its network. It is currently working with Decarbonization Partners, a Temasek-BlackRock partnership.
GenZero has invested in Newlight, a US-based manufacturer of biomaterial produced from methane to displace plastics. Through a joint investment with C-Quest Capital, GenZero is funding the deployment of clean, energy-efficient cookstoves to rural households in Southeast Asia to reduce carbon emissions.
GenZero is also working with Climate Impact X, a marketplace and exchange for carbon credits, to spur the use of sustainable aviation fuel credits.
The platform itself is a joint venture by the Singapore Exchange and Temasek, as well as lenders DBS Group Holdings and Standard Chartered. Temasek’s stake in the platform has since been transferred to GenZero.