Just now
The development of low-carbon fuels has been identified as a critical step towards the decarbonization of transportation. E-fuels, currently produced with renewable energy, captured carbon dioxide (CO₂), and green hydrogen, provide a cleaner alternative to oil and gas, and require little to no modifications to the infrastructure or legacy combustion engines. These low-emission fuels are an important option for hard-to-abate sectors dominated by fossil fuels, such as aviation, shipping, and heavy-duty vehicles.
The challenge is that e-fuel production is projected to be two to six times more expensive than fossil and biofuels even in the long term, due to the high cost of energy associated with the process. Increased availability of renewable energy and declining prices for renewables can help to narrow this cost gap. However, a similar pathway for lowering the costs of producing hydrogen via electrolysis remains a bit more elusive, even as innovations in electrolyzers pave the way towards important cost reductions in the long term. We believe there’s potential in an approach that eliminates the need for hydrogenation in producing e-fuels. This is why we are excited to announce Toyota Ventures’ investment in Oxylus Energy.
Based in New Haven, Connecticut, Oxylus Energy was founded in 2023 by CEO Perry Bakas, CTO Conor Rooney, and COO Harrison Meyer while they were graduate students at Yale University. The company is commercializing a catalyst developed by Professor Hailiang Wang at Yale’s Energy Science Institute for direct electrochemical conversion of CO₂ to methanol. With experience across climate tech commercialization, chemistry, carbon capture, and biofuels, the team’s mission is to make CO₂ utilization competitive, scalable, and circular for a decarbonized future. Through the direct electrochemical conversion of CO₂ at low temperatures and pressures, Oxylus Energy aims to cut the cost of e-methanol, offering a path to lowering emissions in sectors that have been traditionally difficult to decarbonize.
Oxylus Energy’s e-fuel technology is differentiated in that it eliminates the need for hydrogen as an input. In a single step, the company’s electrolyzer stack directly converts captured CO₂ into e-methanol at near room temperature and pressure. The e-methanol can then be used as a drop-in fuel, or upgraded to jet fuel and other green chemicals.
“We are thrilled to support the team at Oxylus Energy as they work to scale this cost-effective process for e-fuel production. Eliminating the need for hydrogen as an input is a significant innovation in the green energy space that has the potential to dramatically reduce production costs and unlock numerous decarbonization pathways.”
-Lisa Coca, Climate Fund partner, Toyota Ventures
Oxylus Energy’s proprietary catalyst demonstrates a high selectivity towards methanol, and the system exhibits a high process energy efficiency, metrics of which meet or exceed that of competing technologies on the market today. The simplicity of Oxylus Energy’s process compared with incumbents signals a potential to scale, a compelling breakthrough in e-fuel technology. Additionally, the ability to bypass the production, storage, and transportation of hydrogen inputs significantly lowers the risks associated with the scale-up of production.
Toyota Ventures is proud to co-lead Oxylus Energy’s $4.5 million over-subscribed seed funding round alongside Azolla Ventures, with participation from Earth Foundry and Connecticut Innovations. Climate Fund partner Lisa Coca and analyst Jay Patel drove Toyota Ventures’ investment in the round.
To learn more about Oxylus Energy, visit the company’s website or the Toyota Ventures portfolio page.