AM Green plans $1 billion investment in 2G biofuels, acquisitions: Report

AM Green aims to be a significant player across green hydrogen, green ammonia, biofuels, e-methanol, sustainable aviation fuels, and downstream high-value chemicals, amid India's green energy transition.

AM Green is set to invest $1 billion in second-generation (2G) biofuels by setting up two bio-ethanol plants, marking a significant expansion for the renewable energy company, Mint has reported.

The company also plans to acquire a 50 percent stake in Assam Bio Refinery Pvt Ltd from Finnish companies Fortum Oyj and Chempolis Oy, the report quoted sources as saying.

Currently, Oil India Ltd subsidiary Numaligarh Refinery Ltd (NRL) holds a 50 percent stake in Assam Bio Refinery, while Fortum and Chempolis hold 40 percent and 10 percent, respectively.

AM Green also aims to acquire the Finland-based biotechnology firm Chempolis Oy, in which Fortum, a Finnish state-run power utility, holds a stake.

Founded by Mahesh Kolli and Anil Kumar Chalamalasetty of the Greenko Group, AM Green, has signed exclusivity agreements for these transactions.

"The exclusivity agreements for acquiring Fortum Oyj and Chempolis Oy's stake in Assam Bio Refinery Pvt. Ltd, and also Chempolis Oy, have been inked by AM Green. AM Green plans to expand in this space and in addition to Assam Bio Refinery, set up two more such plants in the country," the report quoted a source as saying.

The company plans to manufacture 2G biofuels from non-food biomass such as plant materials and animal waste.

Unlike first-generation biofuels, which are produced from sugar, starch, corn, wheat, and broken rice, and third-generation biofuels from microorganisms like bacteria and algae, the Assam JV will use 300,000 tonnes of bamboo annually to produce 50,000 tonnes of bioethanol, 19,000 tonnes of organic compound furfural, 11,000 tonnes of acetic acid, and 144 gigawatt-hours of green energy.

Chempolis is the licensor of the 2G biofuel technology for the world's first plant producing cellulosic ethanol and bio-based chemicals from bamboo. Investors in Chempolis include Finnish investment and asset management group Taaleri Plc.

Kolli and Fortum India President Sanjay Aggarwal declined to comment, Mint said. Moneycontrol couldn’t verify the report independently.

In August, Fortum announced that it would assess strategic options, including potential divestments of its Circular Solutions businesses, which include recycling and waste assets, battery recycling, turbine and generator services, and bio-based solutions. "There is no certainty whether the assessment will result in any transaction," a Fortum Oyj spokesperson told Mint.

"Please note that we have no views to share on the development," an NRL spokesperson said. Queries sent to AM Green, Chempolis Oy, and Taaleri Plc remained unanswered, the report said.

AM Green aims to be a significant player across green hydrogen, green ammonia, biofuels, e-methanol, sustainable aviation fuels, and downstream high-value chemicals, amid India's green energy transition.

Gentari Sdn Bhd, a unit of Malaysia's Petronas, plans to invest $1.5 billion for a 30 percent stake in AM Green Ammonia Holdings, which will produce 5 million tonnes per annum (mtpa) of green ammonia.

AM Green has also signed a term sheet with Yara Clean Ammonia for supplies from its green ammonia plant in Kakinada, Andhra Pradesh.

India's national biofuel policy targets a 20 percent ethanol blending in petrol by 2025-26, advancing the initial deadline of 2030.