(Bloomberg) -- Brookfield Asset Management Ltd. is investing up to $1.1 billion in the low-carbon e-fuels startup Infinium.
The Canadian asset manager agreed to invest more than $200 million into Infinium’s Project Roadrunner that’s under development in West Texas and up to $850 million in other Infinium projects around the world, according to a statement Tuesday.
The deal marks Brookfield’s first direct investment in sustainable aviation fuel. California-based Infinium produces its fuels through a process that combines water, waste carbon dioxide and renewable energy. They can be used in place of fossil fuels in planes, ships, trucks and manufacturing.
While climate-tech investing dropped significantly from its recent highs in 2023, sustainable aviation fuel startups have continued to rake in funding as demand for the fuel has increased. In the first half of 2024, Infinium and its competitor LanzaJet Inc. both raised significant venture funding to finance their production facilities.
The interest in sustainable aviation fuel, or SAF, is in large part driven by policy support, particularly in the European Union and the US, which have stimulated demand.
The EU now mandates that a certain percentage of aircraft fuel be sustainable. In the US, an incentive in the Inflation Reduction Act helps subsidize SAF production. Corporate commitments have increased, too, with companies including United Airlines and Delta Airlines committing to purchase the fuel.
Demand for the fuel already far exceeds available supply, and it’s forecast to grow even more. The Environmental Protection Agency predicts that SAF use needs to grow 122-fold by 2030 in order to fulfill industry commitments.
Brookfield will make the investment through its Global Transition Fund. The company will also serve as lead in Infinium’s series C preferred stock offering.
(Updates with additional context on sustainable aviation fuel investments)
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