DOE conditionally supports proposed Gevo SAF plant with $1.5B loan

The U.S. Department of Energy gave a conditional commitment for a $1.46 billion loan to net-zero hydrocarbon fuels and chemicals producer Gevo. The funding will support Englewood, Colo.-based Gevo’s Net-Zero 1 project (NZ1) to build a sustainable aviation fuel (SAF) plant in Lake Preston, S.D., “the heart of corn country,” Gevo told Cargo Facts . [caption id="attachment_57146497" align="aligncenter" width="1005"] Gevo plans to build a sustainable aviation fuel plant in South Dakota. (Courtesy/Gevo)[/caption] With capitalized interest during construction, the Department of Energy (DOE) Loan Programs Office has a borrowing capacity of $1.63 billion, according to an Oct. 16 release from Gevo. NZ1 is the first large-scale alcohol-to-jet fuel project to receive a Loan Programs Office conditional commitment. Corn becomes SAF The NZ1 facility will use feedstocks from the United States to each year produce about: 60 million gallons of SAF; 1.3 billion pounds of protein and animal feed products; and 30 million pounds of corn oil. Gevo will turn field corn, inedible for people, into SAF using an alcohol-to-jet synthetic paraffinic kerosene pathway, Gevo told Cargo Facts . This type of corn, typically grown for animal feed, contains carbohydrates, protein and oil, which Gevo will separate. The protein and oil will be directed into the livestock food chain, while the carbohydrates will be used to produce SAF. The carbohydrates, though non-nutritive, are rich in carbon, hydrogen and electrons, which makes corn “ideal SAF feedstock,” Gevo said. “Gevo’s process yields over three times more nutritional products by weight than [SAF], efficiently meeting energy needs while still producing valuable corn oil and protein,” the company told Cargo Facts . [caption id="attachment_57146496" align="aligncenter" width="626"] (Courtesy/Gevo)[/caption] Gevo’s SAF could block creation of more than 600,000 tonnes of CO2 equivalent annually, according to a DOE release. Gevo’s SAF meets or exceeds ASTM standards for a blend of traditional jet fuel and up to 50% SAF, though Gevo has successfully flown test aircraft on 100% SAF, Gevo said. The company has also worked with the U.S. Department of Agriculture (USDA) Climate-Smart Commodities Grant Program to support farmers in adopting sustainable farming practices. “Producing renewable SAF isn’t enough — it must also be cost-effective,” Gevo told Cargo Facts . “Gevo’s proprietary plant designs minimize both production costs and carbon intensity scores, aiming to achieve market-relevant carbon abatement with cash costs comparable to petroleum-based jet fuel.” Decarbonizing aviation The Biden-Harris administration aims to increase U.S. SAF production to 3 billion gallons per year by 2030 and 35 billion gallons per year by 2050, as outlined in the SAF Grand Challenge. The SAF Grand Challenge is a joint initiative of the DOE, Department of Transportation and USDA to increase SAF production , lower costs and encourage commercialization. Current U.S. SAF production is about 2,000 barrels per day, or about 30 million gallons per year, according to the DOE release. Once the NZ1 facility reaches full capacity, its output will represent more than double the 2023 U.S. SAF capacity, according to the DOE. Global SAF production is on track to reach 1.9 billion liters this year, according to IATA. The industry must produce 450 billion liters of SAF annually to reach net zero by the 2050 deadline, according to TIACA. NZ1 also supports carbon capture and storage, a method that captures greenhouse gas emissions from industrial applications and stores the carbon in the ground rather than releasing it into the atmosphere, according to Gevo. The DOE will support this process with its loan, which will close after an environmental review by the DOE and pending Gevo’s acceptance of loan conditions, Gevo told Cargo Facts . The DOE loan, once finalized, will likely attract other capital investments “to unlock SAF commercialization,” Gevo Chief Executive Patrick Gruber said in the release. Gevo plans to track and verify the sustainability and carbon intensity of its products through its subsidiary, Verity Holdings.

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