Big Hopes, Big Questions For Proposed SAF Plants

Big Hopes, Big Questions For Proposed SAF Plants DG Fuels has created a lot of excitement with plans to produce sustainable aviation fuel (SAF) from crop residue and woody biomass. Plans have been announced for plants in Louisiana, Nebraska and Minnesota. The Louisiana plant is projected to produce 178 million gal. of SAF, with the other two projected at 193 million gal. each. The potential for creating thousands of new jobs in the construction and operation of the three plants has local and state officials salivating. DG Fuels estimates the economic impact of the Minnesota plant, situated near the border of Minnesota and North Dakota, to be $50 billion. Similar benefits are projected for other host states. Producers are excited about the potential for new markets for crop residue and wood biomass. The Nebraska plant alone projects $140 million in annual premiums to area farmers. The only thing standing in the way of all the hope is money. DG Fuels has been working on the plans for the Louisiana plant for four years. They’re waiting for the U.S. Department of Transportation (DOT) loan approval. When interviewed in late March, Chris Chaput, president and CFO of DG Fuels, expected to get word from the DOT by the end of April. The next step will be a major engineering report in late August. “We could have financial flows by the end of this year,” says Chaput. “Our investors are waiting. They and the bankers we’re working with agree this isn’t difficult technology, so there’s little risk. We have tremendous political support in all three states.” As Chaput notes, the technology is well-proven, so much so that neither the political nor financial backers have required a pilot plant. What isn’t proven is the company’s ability to produce up to 3.6 barrels of fuel per ton of feedstock, compared to industry standards of 1.1 to 1.3 barrels per ton. “We’ve come up with a superior way of assembling the major components,” says Chaput. Supplying the feedstock may be another challenge. At 3.6 gal. per ton of biomass, the Minnesota and Nebraska plants will require 53.6 million tons of biomass each. In public statements in Nebraska, DG Fuels indicated that they’d pay an estimated $150 per dry ton for corn stover. The plant, to be located in Phelps County, Neb., is expected to draw on farms within a 75-mile radius. Shane Westcott, president of the Phelps County Development Corporation and a farmer’s advisory panel leader, is confident there’ll be no shortage of stover. “We see multiple opportunities for the farmers, whether it be catching the chaff off of the combine or raking and baling the stover post-harvest,” says Westcott. While Westcott expects the plant to handle the biomass storage, it’s clear the farmers won’t deliver bales of corn stalks. According to Chaput, the feedstock must be pelletized and dried down to 10% moisture. “Our gasifier is pretty inflexible in terms of what type of biomass,” says Chaput. “Pellets are also more efficient for transportation.” Chaput suggests farmers set up a co-op to handle pelletizing. “It doesn’t make sense to do it at each farm,” he says. “It could be a contractor who’d be the aggregator and then sell us pelletized corn stover.” What’s unclear is how much of the estimated $150 per ton would be needed for transport to a pelletizing plant, pelletizing, storage and transport to the DG Fuels plant. Added to that are possible supplementary fertilizer needs as crop residue is removed. Similar questions remain to be worked out for the other plants. What happens when and if the Louisiana plant is built will likely offer many answers. It’ll be the template DG Fuels hopes to follow in Nebraska, Minnesota and elsewhere. According to Chaput, the company is already working with six or seven other states and may consider licensing the technology. “The goal was to come up with a template and then use the same technology and approach,” says Chaput. “We’re focused on the first plant in Louisiana. Nebraska will be number two, and Minnesota will be number three. If everything goes right, the Louisiana plant will deliver SAF in 2030.” Contact: FARM SHOW Followup, Chris Chaput, DG Fuels, 1025 Connecticut Ave. NW, Suite 507, Washington, D.C. 20036 (ph 202-649-0145; info@dgfuels.com; www.dgfuels.com) or Phelps County Development Corporation, P.O. Box 522, Holdrege, Neb. 68949 (ph 308-995-4148; pcdc@phelpscountyne.com; www.phelpscountyne.com).

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