LAKE PRESTON, S.D. — The first-of-its-kind sustainable aviation fuel facility project in South Dakota recently received a big kick in funding from the U.S. Department of Energy.
Gevo, a renewable fuels company with headquarters in Colorado, was recently awarded a $1.46 billion loan, excluding capitalized interest during construction, from the U.S. Department of Energy to build a large-scale corn starch-to-jet fuel facility near Lake Preston.
According to an Oct. 16 press release from the company, this project is the first-ever large-scale alcohol-to-jet project to receive a Department of Energy Loan Programs Office conditional commitment. With capitalized interest during construction, the Department of Energy loan facility has a borrowing capacity of $1.63 billion.
“This marks a watershed moment for the Net-Zero 1 project and a critical step forward in Gevo’s mission to transform the aviation industry by providing a scalable, sustainable, and economical renewable-carbon-based jet fuel — sustainable aviation fuel,” Patrick Gruber, chief executive officer of Gevo, said in a press release.
Gruber also believes this commitment has the potential to attract other capital investments to help advance sustainable aviation fuel commercialization.
“The due diligence work by the Department of Energy has been incredibly detailed and thorough, and the benefit is a substantially reduced execution risk profile for the project,” he said in a press release. “We are grateful for the support from the Department of Energy’s Loan Programs Office.”
In September 2022, the company broke ground on the 245-acre facility which will use 100% U.S.-sourced feedstocks and is designed to produce approximately 60 million gallons of sustainable aviation fuel, approximately 1.3 billion pounds of protein and animal feed products, and approximately 30 million pounds of corn oil per year.
This project aims to bring new opportunities to South Dakota and advance sustainable fuels while helping reduce emissions and in turn, create healthier communities, according to a press release from the U.S. Department of Energy.
Part of the criteria for the funding is based on developing and implementing a comprehensive plan to benefit the community and labor groups. The U.S. Department of Energy said that Gevo’s project outlines strong community and labor engagement. They said the Lake Preston facility is also located near disadvantaged communities that face high rates of expected population loss.
Additionally, the U.S. Department of Energy said Gevo has reached out to numerous local farmers in the area 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 utilizes USDA funding to incentivize farmers to implement climate-smart agricultural practices that lower the carbon intensity of their crops.
Gevo has also held meetings with numerous parties, such as Mitchell Technical Institute, Lake Area Technical College, South Dakota State University, the Minnekota Agribuilders Association and the SD Sioux Valley District government.
“NZ1 is the largest economic development project in South Dakota history,” Lindsay Fitzgerald, senior vice president of public affairs for Gevo, said in a press release. “We expect that NZ1 will kickstart new growth in the economy, create jobs, and present additional opportunities for the agricultural community in the region around Lake Preston, across South Dakota, and even reaching other states.”
The sustainable aviation fuels market is expected to grow rapidly in the coming years, as 38 of the top 50 airlines have committed to achieve net zero by 2050. The U.S. Department of Energy said sustainable aviation fuel 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.
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