Strategic Biofuels, the developer of a renewable fuel plant in Louisiana, and Sumitomo Corporation of Americas (SCOA), a subsidiary of Sumitomo Corporation, have entered into a Joint Development Agreement for the Louisiana Green Fuels (LGF) project at the Port of Columbia in Caldwell Parish, Louisiana.
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 Financial Investment Decision (FID) and commencement of construction in early 2025, according to a news release.
As part of the agreement, SCOA will also acquire rights at FID to participate for a portion of the full project equity requirement. In a decisive strategic shift related to the investment, Strategic Biofuels also unveiled plans to change its primary renewable fuel product to sustainable aviation fuel (SAF). SCOA intends to provide a 20-year offtake for the approximately 640 million gallons 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,” said Dr. Paul Schubert, CEO of Strategic Biofuels. “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.”
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 tons 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 tons of sawmill waste annually to produce 86 megawatts of power; and
- Geologic carbon sequestration of 1.36 million metric tons per year of CO2 produced from both of those operations to create this fuel which is equivalent to removing nearly 300,000 passenger cars from the road, making it a product much in demand by the aviation industry.
“Our partnership with Strategic Biofuels is just another example of our commitment to support the energy transition within the Americas,” said Sandro Hasegawa, General Manager, Energy Innovation Initiative Americas at SCOA. “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.”
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 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 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.
