Auto supplier BorgWarner Inc. has taken a minority stake in a Tennessee-based company that converts plastic waste and other materials into energy.
The Auburn Hills, Mich.-based supplier of turbochargers and electric motors announced Aug. 23 the $10 million investment in Enexor BioEnergy LLC as part of its plan to achieve carbon neutrality by 2035 and as it gradually reconfigures its business around the electrification of the automotive industry.
Investing in the eco-friendly company, founded in 2015, was a "natural extension" of BorgWarner's technology portfolio, Joseph Fadool, vice president of BorgWarner, said in a news release. Enexor's marquee product, the Bio-CHP system, is powered by BorgWarner components.
"We see immense opportunity for our collaboration with Enexor and are excited to see the impact its solutions, and our investment, will have on the future of renewable power generation and the Earth's carbon footprint," Fadool said.
Enexor uses combustion to convert waste to energy or heat. The systems are packaged inside a 20-foot shipping container that can be deployed at client facilities. One system uses an all-plastics feedstock and the other allows for a mixture of plastics and other waste.
The companies declined to say what ownership percentage came with the investment from BorgWarner, which is a "major A Series investor."
The Bio-CHP system uses BorgWarner's 75-kilowatt turbine generator, which converts hot gas exhaust to electrical energy, according to the company. It also uses an inverter manufactured by BorgWarner subsidiary Cascade Motion.
Enexor says its system can reduce up to 1,000 metric tons of CO2 equivalent emissions each year by reducing landfill emissions, offsetting fossil fuels and reducing emissions from waste disposal transportation.
BorgWarner announced in June plans to eliminate direct and indirect carbon emissions by 2035. The carbon-cutting initiative is being shaped by its intent to boost the company's electric vehicle revenue from less than 3 percent of total revenue, where it stands now, to approximately 45 percent in 2030.
BorgWarner's Series A investment will help Enexor commercialize its system, the companies said. They are also exploring other carbon-reduction technologies and battery pack supply. Lee Jestings, founder and CEO of Enexor, said in an email to Crain's Detroit Business that more details would be available in a few months.
"At Enexor, we all share a mutual passion for technological innovation and leaving a lasting legacy that betters humanity for generations long after we are gone,"Jestings said in the release. "We are thrilled to have a company like BorgWarner, that shares the same passion and is driven by a similar mission, invest so heavily in our company."