USDA closes on $105M loan guarantee to Fulcrum for biorefinery converting municipal waste to renewable jet fuel; first USDA loan for biojet
The US Department of Agriculture (USDA) has closed on a $105-million Biorefinery Assistance Program loan guarantee through Bank of America, N.A. to Fulcrum Sierra Biofuels, LLC to build a biorefinery to produce jet fuel from municipal solid waste (MSW) via a proprietary two-stage thermochemical process. (Earlier post.)
USDA Rural Development’s loan guarantee represents less than half of the $266 million project cost. The plant is expected to produce 11 million gallons of fuel annually. This is the first loan guarantee USDA has made for the production of bio jet fuel.
Fulcrum will gasify 147,000 tons of municipal solid waste to produce synthesis gas which it then will catalytically convert to synthetic paraffinic kerosene/jet fuel via a Fischer-Tropsch (FT) process.
Fulcrum licensed its gasification system from ThermoChem Recovery International. During the gasification process, the prepared MSW feedstock rapidly heats up upon entry into the steam-reforming gasifier and almost immediately converts to syngas. A venturi scrubber captures and removes any entrained particulate, and the syngas is further cooled in a packed gas cooler scrubber. The cleaned syngas is them processed through an amine system to capture and remove sulfur and carbon dioxide. The syngas then enters the secondary gas clean-up section that contains compression to increase syngas to the pressure required by the FT process. The end syngas product is very clean with zero sulfur content.
The FT portion of the process is an adaptation of the well-established Fischer-Tropsch process. The purified syngas is processed through a fixed-bed tubular reactor where it reacts with a proprietary catalyst to form three intermediate FT products: a Heavy Fraction FT Liquids (HFTL) product; a Medium Fraction FT Liquids (MFTL) product; and a Light Fraction FT Liquids (LFTL) product, commonly called Naphtha. The Naphtha is recycled to the partial oxidation unit with remaining tail gas to be reformed to hydrogen and carbon monoxide.
Hydrotreating, hydrocracking and hydroisomerization upgrading steps are used to upgrade the combined HFTL and MFTL products into jet fuel.
The plant will be the first of what the company expects to be several bio jet fuel plants throughout the country.
In 2013, Fulcrum was awarded a $4.7-million grant by the US Department of Defense (DoD) to begin engineering and development on a plant to produce jet fuel. Fulcrum matched this DoD grant with $4.7 million of its own capital to provide funding to complete the engineering and development.
Last month, Cathay Pacific Airways announced that it is investing in Fulcrum Bioenergy Inc., the parent company of Fulcrum Sierra BioFuels, LLC, and has negotiated a long-term supply agreement with Fulcrum for 375 million gallons of sustainable aviation fuel over 10 years. This would represent about 2% of the airline’s annual fuel consumption. (Earlier post.)
USDA Biorefinery Assistance Program. USDA awarded the first loan guarantee in 2009 to Sapphire Energy in New Mexico. Sapphire has already paid off its $54.5-million loan guarantee. The program’s current portfolio includes Fremont Community Digester, located in Fremont, Mich., which received a $12.8-million loan in 2011 to convert food and agricultural waste to biogas that is used as fuel to generate electricity. INEOS New Plant Bioenergy, located in Vero Beach, Fla., received a $75-million loan in 2011 to produce cellulosic ethanol from woody biomass and municipal solid waste.
USDA is negotiating three additional loans for biorefineries in Iowa, North Carolina and Oregon. These loans would provide financing to produce renewable fuels from woody biomass, municipal solid waste and energy grasses such as switch grass, miscanthus and arundo donax. One of these ventures will retrofit an existing corn ethanol facility to produce cellulosic ethanol.
Congress established the Biorefinery Assistance Program in the 2008 Farm Bill. It reauthorized and extended the program in the 2014 Farm Bill. The 2014 Bill expands the program to include bio-based renewable chemicals and bio-based product manufacturing. USDA staff are working on regulations to set forth upcoming application terms for additional loan guarantees under the program.