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.
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," 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."
SAF is a renewably produced fuel specifically created to reduce the considerable carbon emissions of commercial aviation. The footprint of SAF that will 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.
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.
Once complete, the LGF plant will create approximately 151 direct jobs onsite with an average annual income of $70,000 per year, excluding benefits; while five to six times as many indirect job opportunities are expected.
During peak construction times, an estimated 1,500 jobs will need to be filled to further the plant to operation. The team is also actively involved with Caldwell Parish School District and has helped support several programs championing career and personal development.