Sumitomo Corp. of Americas (SCOA), a subsidiary of Tokyo-based Sumitomo Corp. , has signed on as a transferee partner for the joint development of Strategic Biofuels LLC’s subsidiary, Louisiana Green Fuels LLC (LGF), previously announced, for the baseload biorefinery and adjacent bioenergy with CCS. (BECCS) under structure at Columbia Harbor in Caldwell Parish in northeastern Louisiana, about 25 miles south of Monroe (OGJ Online, Sept. 4, 2023).
As part of the Feb. 7 agreement, SCOA will take an anchor position and lead the formation of a Japan-based investment consortium to fund the majority of the progression capital that Strategic Biofuels wishes to pursue through the Financial Investment Decision (FID). And it will take off in early 2025, the corporations said.
At the time of taking the IDF, the SCOA stated that it would obtain equity rights for a portion of the total equity required for the project.
In announcing the partnership, Strategic Biofuels revealed that it would upgrade LGF’s number one renewable fuel product with sustainable aviation fuel (SAF), from an initially planned blend of renewable diesel and renewable naphtha, to help meet the growing demand for the announcement. Aviation industry on the road to decarbonization.
“The transition to SAF is an exciting time for us and our partners, for Louisiana’s energy landscape, and for the energy transition as a whole,” said Dr. Paul Schubert, CEO of Strategic Biofuels.
As part of the partnership agreement, SCOA announced its goal to offer a 20-year abatement for the nearly 640 million gallons per year of renewable fuels produced through LGF, as well as all state and federal credits for renewable fuels.
In addition to reducing emissions from the aviation sector, the transfer of LGF production to SAF will also increase the operator’s carbon footprint.
“Although we have a lot of work ahead of us, our team is fully prepared to advance the project to FID and supply SCOA with SAF,” Schubert said.
In addition to the planned carbon rebates starting in 2029, LGF’s plant will use:
The announcement of the new partnership for LGF comes after the U. S. Environmental Protection Agency (EPA) granted the Louisiana Department of Natural Resources (LDNR) the right to factor Class VI permits for the geological sequestration of CO2 by the end of December 2023, making Louisiana one of only 3 states to receive this authority.
The partners stated that they expect the primacy of the NDA in this domain to accelerate the timeline for regulatory review and the issuance of Class VI permits for the FMA project.
“Our partnership with Strategic Biofuels is just one example of our commitment to supporting the energy transition in the Americas,” said Sandro Hasegawa, Executive Director of SCOA’s Americas Energy Innovation Initiative. “We look to the future to lead investments with our partners in Japan and demonstrate what can be achieved when global players work together. “
In late June 2023, Strategic Biofuels revealed that SLB would provide on-site threat relief and initial engineering and design (FEED) for LGF’s Carbon Capture and Sequestration Complex (CCS), which will be built in and around the adjacent BECCS biofuels refinery and power plant. The scope of SLB’s paints also covers long-term provisioning in targeted injection operations and long-term CO2 tracking.
The mid-2023 contract follows LGF’s April 2022 agreement with Koch Project Solutions, a subsidiary of Koch Engineered Solutions, to structure the renewable fuels plant on a turnkey lump sum basis with subsidized pledges through from the parent company, adding damages for any functionality and schedule delays. As part of the contract, KPS will provide engineering, procurement, structure, commissioning and commissioning of the biorefinery.
In the past, Strategic Biofuels decided to have Hatch Ltd. carry out the engineering of the LGF project.
In early 2023, Strategic Biofuels awarded a contract to Johnson Matthey (JM) and bp PLC to license their jointly developed CANS Fischer Tropsch (FT) generation for LGF’s biorefinery, which will use the generation to convert syngas generated from its 1 million tonnes/year. (tpa) biomass feedstock in an initial volume of 31. 8 million gal/year of biofuels, as well as long-term SAF production.
Strategic Biofuels, which first won a $200 million tax-free bond allocation from the state of Louisiana to help advance estimated $700 million development, has won money and ongoing legislation from the state to promote it as part of Louisiana’s broader commitment to achieve net-zero emissions statewide through 2050.
In February 2022, Louisiana Governor John Bel Edwards granted LGF’s allocation a $250 million bond allocation designed to be an integral component of debt financing of structure costs. For the 2021 personal trading bond year, LGF earned $250 million of the $393 million available. of the government. The allocation gave the right to factor tax-free bonds to fund the allocation, which is qualified to obtain them because it is a waste-to-energy allocation.
Due to the positive monetary effects resulting from the U. S. Inflation Reduction Act regarding tax credits for sequestration projects, the Executive Committee of the Louisiana Community Development Authority (LCDA) voted unanimously in September of 2022 to approve a solution that grants final approval for an amount of up to $1. 1 billion. Tax-exempt obligations to finance a portion of the LGF project.
As a factor in state-level tax obligations, the LCDA is legal to factor bonds to finance economic, industrial, and production progression projects on behalf of Louisiana’s local government entities. In addition to the bond allocations to date, Strategic Biofuels said it expects to get really ample additional allocations over the next two years.
Louisiana also enacted a Caldwell Parish-specific law on Aug. 1, 2022, which extended the acquisition of eminent domain of pore rights for the underground CO2 garage, prohibiting third-party drilling through Strategic Biofuels’ garage tank. The legislated drilling ban aligns the allocation of LGFs with the carbon sequestration needs of the California Air Resources Board’s Low Carbon Fuel Standard (LCFS) and allows credits for fuel delivered to the state. These credits, along with credits under the Federal Renewable Fuel Standard and federal sequestration tax credits, are intended to contribute to long-term commission income.