KEY POINTS
- The U.S. government approves nearly $3 billion in loan guarantees for sustainable aviation fuel projects.
- Calumet and Gevo will receive funding for biofuel facilities in Montana and South Dakota.
- These projects align with the U.S. goal of meeting aviation fuel demand with SAF by 2050.
The U.S. Department of Energy has approved conditional loan guarantees worth nearly $3 billion to support two major sustainable aviation fuel (SAF) projects. The funding will help scale biofuel production, aligning with the U.S. government’s target of meeting all domestic aviation fuel demand with SAF by 2050.
Funding for biofuel facilities in Montana and South Dakota
One of the projects, receiving up to $1.44 billion, will fund the expansion of Calumet’s Montana facility. The plant will convert vegetable oils, fats, and greases into renewable biofuels, including SAF, renewable diesel, and naphtha.
Upon reaching full capacity, the Montana facility is expected to produce 315 million gallons of biofuels annually, with most of it being SAF. This output represents 10 percent of the government’s SAF goal for 2030, according to the Department of Energy (DOE).
The second loan guarantee, worth up to $1.46 billion, will go to Gevo Inc. for the construction of the first commercial-scale facility in the U.S. to convert corn starch into jet fuel. Located in Lake Preston, South Dakota, the facility will use carbon capture and renewable power technologies to produce SAF.
U.S. aims for SAF to power aviation sector
The White House has set an ambitious goal to supply 3 billion gallons of SAF annually by 2030. These projects are critical steps in meeting that target. The DOE anticipates that SAF production will contribute significantly to reducing the aviation industry’s carbon footprint, which is essential to achieving broader climate goals.
Additionally, the U.S. Energy Information Administration projects a 50 percent increase in biofuel production in 2024, driven by the rising demand for SAF.
Both Calumet and Gevo’s projects are part of a larger effort to develop renewable energy solutions and reduce reliance on traditional fossil fuels. According to Reuters, the expansion of SAF production is a key component of the Biden administration’s climate strategy, which focuses on cutting carbon emissions in high-impact sectors like aviation.
Loan guarantees to fuel green growth
The conditional loan guarantees mark a significant investment in the future of sustainable aviation. As biofuel technologies evolve and demand for SAF grows, the U.S. aims to become a leader in clean energy for aviation.
These developments not only support the administration’s environmental goals but also position the country as a hub for green aviation technology.
With growing interest in sustainable energy, these projects demonstrate the government’s commitment to fostering innovation in the renewable energy sector. The DOE expects the facilities to play a key role in meeting national sustainability targets.
