PIERRE, S.D. (DRGNEWS)

The United States Department of Energy Loan Programs Office has made a conditional commitment (Oct. 16, 2024) for a $1.46 billion loan guarantee to a company building a large-scale, corn starch based jet fuel production facility in South Dakota.

Gevo NZ1 is building the first-of-its-kind-facility in the United States in Lake Preston. It will use 100% U.S.-sourced feedstocks and is designed to produce approximately 60 million gallons of sustainable aviation fuel (“SAF”), approximately 1.3 billion pounds of protein and animal feed products, and approximately 30 million pounds of corn oil per year. Ultimately, the plant is expected to produce SAF with a net-zero carbon footprint on a lifecycle basis, including through the burning of the fuel.

According to a recent report from Charles River Associates, Net-Zero 1 is projected to generate significant economic and climate benefits. Specifically, the plant is expected to create more than 1,300 indirect jobs during its construction phase and 100 permanent jobs at the plant itself. This is in addition to hundreds of local indirect jobs created across the agricultural, manufacturing and transportation industries, generating an annual economic impact of over $100 million.

Gevo NZ1 says the site in Lake Preston provides access to a wide base of local farmers and growers offering U.S.-grown, low-cost, low-carbon field corn. The facility would use this low-carbon feedstock to produce sustainable aviation fuel (SAF), renewable diesel, and renewable naphtha, and also use carbon capture and sequestration and renewable power to lower emissions. Annually, Gevo NZ-1 would also produce approximately 1.3 billion pounds of high-value protein products, used in animal feed, and approximately 30 million pounds of corn oil. Gevo would be the first integrated, commercial-scale facility in the United States to convert corn starch to SAF with carbon capture and renewable power. The announcement will help unlock exciting new economic opportunities in South Dakota while helping advance sustainable fuels to cut harmful emissions and deliver healthier communities across the nation.

As the aviation sector aims to meet its decarbonization goals, SAF will become increasingly vital. SAF is the only viable near-term option to decarbonize the airline industry, which is responsible for 11% of U.S. transportation emissions or 3.3% of total U.S. emissions. The SAF Grand Challenge targets a lifecycle emission reduction of at least 50% compared to jet fuel made from petroleum.

As part of its community engagement, Gevo has reached out to numerous local farmers in the immediate vicinity of the project location who, in total, farm approximately 995 fields and 65,800 acres. These farmers were included in Gevo’s GROWERS program, which uses U.S. Department of Agriculture funding to incentivize farmers to implement climate-smart agricultural practices that lower the carbon intensity of their crops. Gevo has also held meetings with such as Mitchell Technical Institute, Lake Area Technical College, South Dakota State University, the Minnekota Agribuilders Association and the SD Sioux Valley District government.

The loan guarantee would be offered through LPO’s Title 17 Clean Energy Financing Program, which includes financing opportunities for innovative energy and supply chain projects and projects that reinvest in existing energy infrastructure. Corn starch-to-SAF is eligible under the Renewable Energy Systems technology classification with biomass as an allowable input.

While this conditional commitment indicates DOE’s intent to finance the project, DOE must complete an environmental review, and the company must satisfy certain technical, legal, environmental, commercial, and financial conditions before the Department can decide whether to enter into definitive financing documents and fund the loan guarantee.