The US Department of Energy (DOE) Loan Programs Office (LPO) announced a conditional commitment for a $1.46-billion loan guarantee to Gevo Net-Zero 1, LLC (Gevo NZ-1), excluding capitalized interest during construction, to help finance a large-scale corn starch-to-jet fuel facility in Lake Preston, South Dakota.

The facility—the first of its kind in the United States—will benefit from significant access to a wide base of local farmers and growers offering US-grown, low-cost, low-carbon field corn. The facility would utilize this low-carbon feedstock to produce sustainable aviation fuel (SAF), renewable diesel, and renewable naphtha, and also use carbon capture and sequestration and renewable power to lower emissions.

Annually, Gevo NZ-1 would also produce approximately 1.3 billion pounds of high-value protein products, used in animal feed, and approximately 30 million pounds of corn oil. Gevo would be the first integrated, commercial-scale facility in the United States to convert corn starch to SAF with carbon capture and renewable power.

The Gevo NZ-1 facility would produce up to 60 million gallons of SAF per year once completed. Based on Gevo’s analysis with the 40BSAF-GREET model, this drop-in replacement fuel will reduce lifecycle emissions compared to fossil jet fuel, enabling the avoidance of over 600,000 metric tons of CO₂e annually.

Current US SAF production is around 2,000 barrels per day, or about 30 million gallons per year. Once the facility reaches full capacity, Gevo’s output alone will represent more than double the 2023 US SAF capacity.

SAF is the only viable near-term option to decarbonize the airline industry, which is responsible for 11% of US transportation emissions or 3.3% of total US emissions.

Other low-carbon alternatives to traditional jet fuel such as hydrogen- and battery-powered aircraft technologies are still early in their development, leaving the aviation industry reliant on sustainable “drop-in” fuels from renewable feedstocks. The International Air Transport Association expects that SAF will contribute 65% of the aviation industry’s 2050 net zero emission efforts, with the remaining 35% coming from a combination of new propulsion technologies, carbon capture and storage, carbon offsets, and efficiency gains.

The SAF 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. Publicly announced SAF offtake agreements doubled between 2021 and 2022. The drop-in nature of Gevo’s renewable fuel facilitates rapid adoption with minimal or no modifications to existing engines or distribution and fueling infrastructure.

The loan guarantee would be offered through LPO’s Title 17 Clean Energy Financing Program, which includes financing opportunities for innovative energy and supply chain projects and projects that reinvest in existing energy infrastructure. Corn starch-to-SAF is eligible under the Renewable Energy Systems technology classification with biomass as an allowable input.

While this conditional commitment indicates DOE’s intent to finance the project, DOE must complete an environmental review, and the company must satisfy certain technical, legal, environmental, commercial, and financial conditions before the Department can decide whether to enter into definitive financing documents and fund the loan guarantee.