South Dakota invests in non-fossil based renewable fuel facility

News StaffSeptember 16, 2022Agriculture News
Kerry Kulkarni, Watertown Public OpinionLt. Governor Larry Rhoden addresses those attending the groundbreaking for a $1 billion zero-emissions hydrocarbon plant. The Noem administration calls it the biggest investment South Dakota has ever made.

LAKE PRESTON, SD – Funds for a $1 billion zero-emissions hydrocarbon plant is the single, largest investment South Dakota has ever made, according to the Noem administration, who joined officials from Colorado-based Gevo, Inc. in a groundbreaking ceremony this week near Lake Preston.

The news comes as sustainable fuel production gains momentum from recent victories in Congress as well as support from the White House, general and business aviation associations, and major U.S. airlines.

The company aims to eliminate greenhouse gases from transportation fuels, including gasoline and diesel fuel.  Burning sustainable fuel emits significantly fewer greenhouse gas emissions than conventional fossil-based fuel. It’s made by mixing conventional fuel with various renewable materials including cooking oil, plant oils, agricultural residues, and municipal waste.

The liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel that when burned have potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products.

In Lake Preston, “The local availability of low-carbon corn as a feedstock for our process makes Lake Preston a favorable location for this operation,” said Tony Wells, Gevo’s site leader and general manager.

FSA Administrator Zach Ducheneaux, says the Net-Zero 1 facility aligns with the USDA Climate-Smart Commodities Partnership Program.

The sustainable fuel production company is expected to add 1,000 construction jobs and 90 long-term employees. The project is expected to cost $1 billion, company officials said.  “Additionally, the local wind conditions are ideal for the wind power that will provide electricity to our plant, and there is a good local market for the high-protein animal feed product that we will be selling.”

In introducing its first commercial-scale sustainable aviation fuel facility that will cover 245 acres, Gevo’s management team was joined by government officials, representatives from partner companies and customers, business leaders, local farmers, and members of the media.

“South Dakota provides all the elements for success required for our first commercial facility, but we’re actively working to identify and develop our second site since we have supply offtake agreements that require additional capacity beyond Net-Zero 1 (NZ1),” said Dr. Chris Ryan, president and COO. “As we build our production capacity to meet our supply obligations, we know these projects also deliver value to local farmers and communities. We’re excited to move forward and provide that value.”

The project schedule is expected to allow NZ1 to begin delivery of initial volumes of sustainable aviation fuel in 2025 to fulfill a portion of existing supply agreements. Net-Zero 1 is expected to produce 55 MGPY of sustainable aviation fuel, or 65 MGPY of total hydrocarbon volumes.

In 2023, Gevo expects to close the construction financing for the NZ1 project and begin construction.

USDA Farm Service Agency Administrator Zach Ducheneaux told the crowd at the ground breaking that the Net-Zero 1 facility aligns with the USDA Climate-Smart Commodities Partnership Program.  He noted the importance of the project for South Dakota and the agriculture industry across the country.  “This is exactly what Ag Secretary Vilsack envisioned for rural America.”