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Strategic Biofuels secures SCOA investment for LGF

Strategic Biofuels secures SCOA investment for LGF
An artist's rendering of Strategic Biofuels LLC Louisiana Green Fuels (LGF) project that has moved into the Front End Engineering Design (FEED) stage (image courtesy Strategic Biofuels).

In the United States (US), renewable fuel project developer Strategic Biofuels LLC, and Sumitomo Corporation of Americas (SCOA), a subsidiary of Japan-headed Sumitomo Corporation, a leading Fortune 500 global trading and business investment company have announced that they have entered into a Joint Development Agreement (JDA) for the Louisiana Green Fuels (LGF) project at the Port of Columbia in Caldwell Parish, Louisiana (LA).

SCOA will take an anchor position and lead the formation of a Japanese-based investment consortium aimed at funding the majority of development capital needed to carry the project to the Financial Investment Decision (FID) and commencement of construction in early 2025.

As part of the agreement, SCOA will also acquire rights at FID to participate in a portion of the full project equity requirement.

Louisiana Green Fuels project shifting gears

In a decisive strategic shift related to the investment, Strategic Biofuels also unveiled plans to change its primary renewable fuel product from renewable diesel to sustainable aviation fuel (SAF).

SCOA intends to provide a 20-year offtake for the approximately 640 million (US) gallons (≈ 2.42 billion litres) of renewable fuels produced as well as all state and federal renewable fuel credits.

Our goal has always been to bring online a fuels plant contributing to a sustainable future, and we are thrilled to have SCOA as our partner in our LGF endeavor. The shift to SAF is an exciting moment for us and our partners, for the energy landscape in Louisiana, and for the greater global energy transition overall. 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, said Dr Paul Schubert, CEO of Strategic Biofuels.

Exceptionally low SAF footprint

When the LGF project was first announced, Strategic Biofuels garnered recognition for the extraordinarily low carbon footprint of the planned renewable diesel fuel product.

The footprint of SAF that will now be produced is expected to be so low that just one gallon of it blended with three gallons of fossil-derived jet fuel will reduce the dependency on carbon in the future.

To achieve this carbon reduction in 2029, the LGF plant will utilize:

  • Approximately 1 million tonnes per year of forestry waste as the feedstock for the biorefinery;
  • Green energy from an integrated biomass-fired power plant that will take nearly 1 million tonnes of sawmill waste annually to produce 86 MWe of power; and
  • Geologic carbon sequestration of 1.36 million tonnes per year of carbon dioxide (CO2) produced from both of those operations to create this fuel.

Rapid project progression

Our partnership with Strategic Biofuels is just another example of our commitment to supporting the energy transition within the Americas. Supporting the LGF project means bringing groundbreaking technology to the Port of Columbia that enables the local economy and sustains the natural environment. We look forward to leading the investment with our partners in Japan and demonstrating what can be accomplished when global players work together, said Sandro Hasegawa, General Manager of Energy Innovation Initiative Americas at SCOA.

This investment commitment from SCOA continues the path from 2023, which was a year of rapid project advancement for LGF.

Most recently, Strategic Biofuels announced that the Louisiana Department of Environmental Quality (LDEQ) had issued an Air Permit for the integrated LGF facility, an industry “first-of-its-kind” in Louisiana and a major step forward for the project.

This followed an agreement with SLB, a global technology company, to provide its industry-leading technical services for the company’s planned carbon sequestration complex.

Earlier in the year, the US Environmental Protection Agency (EPA) deemed the project’s Class VI permit application for carbon sequestration as “administratively complete,” which included extensive geologic data collected from LGF’s 2021 Class V stratigraphic test well.

Furthermore, the EPA announced on December 29, 2023, that it was awarding “primacy” to the State of Louisiana, conveying to the state’s Department of Natural Resources the right to issue Class VI permits for geologic CO2 sequestration.

Louisiana is only the third state to be granted this authority. As has occurred in the only two other states granted primacy, that action is expected to accelerate the schedule for regulatory review and Class VI permit issuance.

Local economy driver

Once complete, the LGF plant will create approximately 151 direct jobs on site with an average annual income of US$70,000 per year, excluding benefits; while five to six times as many indirect job opportunities are expected.

During peak construction times, an estimated 1,500 jobs will need to be filled to further the plant toward operations.

As a result, Strategic Biofuels will substantially improve the local quality of life in the nation’s seventh poorest US Congressional District (LA-5) and tenth poorest Parish in Louisiana, which has an average household income of just US$41,000 per year.

The team is also actively involved with Caldwell Parish School District and has helped support several programs championing career and personal development.

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