US Government Proposes $1.46 Billion in Financing to Gevo for Clean Fuel Initiative
The Biden administration has proposed a conditional loan guarantee of $1.46 billion to Gevo Inc., aimed at funding a large-scale facility in Lake Preston, South Dakota, that will convert corn starch into sustainable aviation fuel (SAF).
This announcement, made by the US Energy Department on Wednesday, is part of the administration’s efforts to boost the production of renewable energy sources.
Gevo’s Net-Zero 1 project is expected to help increase the output of sustainable aviation fuel, renewable diesel, and renewable naphtha, further aligning with the government’s climate goals. The initiative reflects a broader strategy to reduce greenhouse gas emissions and enhance energy independence through sustainable biofuels.
In addition to Gevo’s funding, the Energy Department also revealed a $1.44 billion conditional loan guarantee to Montana Renewables LLC, a subsidiary of Calumet Inc. This funding is designated for expanding a renewable fuels facility in Great Falls, Montana, which will utilize vegetable oils, fats, and greases to produce similar sustainable fuels.
The two projects collectively represent a significant commitment to advancing the US biofuel industry, with the potential to create approximately 450 construction jobs and up to 40 operational positions at their peak. Once operational, Montana Renewables is projected to become one of the largest producers of sustainable aviation fuel globally, capable of producing about 315 million gallons annually.
The White House has set ambitious targets for sustainable aviation fuel production, aiming to meet 3 billion gallons of annual demand by 2030 and ultimately achieving 35 billion gallons by 2050. According to the US Energy Information Administration, domestic biofuel production is expected to increase by around 50% in 2024, primarily driven by growing SAF production.
Gevo’s facility will be the first of its kind in the US to integrate carbon capture and renewable power technologies into the process of converting corn starch to jet fuel. This innovation is part of a broader movement to enhance sustainability in aviation, which accounts for a significant portion of US transportation emissions.
Bloomberg, Market Watch, Reuters, and US Department of Energy contributed to this report.
