1 November 2021
An Englewood, Colorado based company called simply Gevo makes sustainable, low-carbon biofuel and chemicals. After ten years of research and development to manufacture biofuels, Gevo is jumping into the biofuel business with both feet.
Gevo recently announced a joint venture with ADM to make about 500 million gallons of jet fuel using about 900 million gallons of ethanol supplied by ADM’s dry mills in Columbus, Nebraska, and Cedar Rapids, Iowa, and its Decatur, Illinois complex. A residual product will be other types renewable hydrocarbons.
Gevo announced last Wednesday is will spend $800 million to build a facility in Lake Preston, South Dakota to make 45 million gallons of Sustainable Aviation Fuel (SAF) a year, along with 350 million pounds of animal feed.
To keep its carbon footprint low, the plant will run on electricity from a nearby wind farm. Depending on the feed stock and whose research you believe, the carbon foot print of SAF is 62 to 80% less than petro-based jet fuel. That is a very big deal for airlines trying to meet pollution regulations and big city airports measuring their jet exhaust pollution daily.
How big is the SAF market potential?
United Airlines burns four billion gallons of jet fuel a year; only one million gallons of it is SAF.
United Airlines test pilot Ryan Smith took off from Houston in early October for a 90-minute flight over the Gulf of Mexico with a Boeing 737 powered by two different fuels. One engine was burning standard petroleum-based jet fuel while the other was running on fuel produced entirely from leftover cooking oil and grease.
"We have demonstrated commercial aircraft can operate in the same capacity with sustainable fuel as with blended fuel. This is a true step in the path of de-carbonization", said Lauren Riley, United Airlines’ Managing Director for Global Environmental Affairs and Sustainability.
The Houston test flight (with no passengers) was the first time a commercial aircraft ran at least one engine on 100 percent SAF. Currently, the maximum SAF blend is limited to a 50/50 blend on passenger flights.
SAF is a drop-in fuel, meaning it can be used without making any modifications to existing jet engines. In order to reach their carbon reduction goals, SAF manufacturers have to keep track of the energy used in each step of the process, and they even hire auditors to certify their carbon footprint.
The EPA is encouraging airlines to use more SAF, but there is just not enough SAF to meet the demand. Only two plants in the United States make SAF: World Energy waste oil plant in Paramount, California, and the Gevo facility in Silsbee, Texas.
Because SAF is so scarce and the demand to reduce the carbon footprint is so strong, SAF costs two to four times as much as regular aviation fuel. Gevo is aggressively working to resolve that problem.
1 November 2022 Update
So far in 2022, there are at least 13 new soybean crush plants that have recently been completed or are under construction. All of these plants will be on line by 2026 and they will crush 640 million bushels of soybeans every year. It will take 12 million acres to grow 640 million acres of beans. Where are we going to get that many acres to produce those beans?
Cargill, Bunge, ADM, Zeeland, Bartlett, AGP and several startup companies are not building these crush plants to look at or run at 50% capacity. They will crush 640 million bushels of beans, not matter the price.
Why? Because the airlines are will to pay more than double… more than triple the price of petroleum jet fuel for SAF.
In a few years, the USA will not be exporting soybeans because all the soybeans grown in the USA will be crushed domestically and we will become the world leading exporter of soybean meal.