2025 project would position the company as a top SAF producer globally
Montana Renewables LLC has been producing sustainable aviation fuel in Great Falls, MT since November 2022. Photos courtesy of Calumet Specialty Products Partners L.P.
Montana Renewables LLC (MRL) has received a $1.44 billion conditional commitment for a loan guarantee from the U.S. Department of Energy (DOE) to expand its Great Falls, MT renewable fuels plant to produce 300 million gallons a year of sustainable aviation fuel (SAF).
The expansion will position MRL as one of the largest SAF producers in the world with a combined annual production capacity of 330 million gallons of SAF and renewable diesel, the company said. The expansion effort has been named MaxSAF™, and the company expects to begin work on the project in 2025.
MRL is an unrestricted subsidiary of Calumet, Inc. In its third quarter 2024 earnings report, Calumet stated that Montana Renewables set another SAF production record during the three-month period that ended in September. Calumet manufactures, formulates, and markets a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. It is headquartered in Indianapolis, IN and operates twelve facilities in North America.
In a press release announcing the DOE’s $1.44 billion conditional loan guarantee commitment, the company cautioned that, “while this conditional commitment represents a significant milestone and demonstrates DOE’s intent to finance the project, certain technical, legal, environmental, and financial conditions, including negotiation of definitive financing documents, must be satisfied before funding of the loan guarantee.”
According to the company, MRL is the largest SAF producer in North America. It is supplying SAF to airports in Minneapolis, MN and Detroit, MI produced at its Great Falls plant from distillers’ corn oil, canola oil, used cooking oil, camelina oil, and tallow.
In addition to SAF, Montana Renewables produces renewable diesel, renewable hydrogen, and renewable naphtha at its Great Falls plant.
Expansion Project
Bruce Fleming, CEO of MRL, said the individual projects that make up MaxSAF include:
• Adding a second renewable fuels reactor, which would allow approximately half of the plant’s 300-million-gallon SAF capability to be online by 2026.
• Debottlenecking the plant’s existing renewable fuels and feedstock pretreatment units.
• Installing SAF blending and logistics assets.
• Increasing renewable hydrogen production.
• Adding capabilities for the cogeneration of renewable electricity and steam.
• Enhancing on-site water treatment and recycling capabilities as well as other plant improvements.
Fleming stated that MRL’s MaxSAF planned expansion is fully aligned with the national drive to produce low carbon, sustainable alternatives to fossil fuels. “The expansion will directly replace fossil jet and diesel; reduce MRL’s carbon footprint by producing more renewable hydrogen and electricity; and contribute to regional economic development,” he said.
Two Tranches
The DOE’s conditional commitment contemplates a loan guarantee structured in two tranches, the company said in its announcement. “The first tranche of approximately $778 million is expected to close in the fourth quarter of this year, and the balance of the loan guarantee is to be disbursed through a delayed draw construction facility from the beginning of construction in 2025 through the anticipated completion of the MaxSAF project in 2028,” the announcement explained. “If finalized, the loan will have a 15-year tenor and an annual interest rate at the U.S. Treasury rate plus three-eighths of a percent when issued (currently approximately 4 and 3/8%).
Servicing of principal and interest will be deferred until MaxSAF is commissioned. A $150 million equity investment will be made at the initial closing. Retained earnings from MRL will supplement DOE funds to maintain a 55-to-45 debt-to-equity ratio during the MaxSAF construction sequence. While this conditional commitment represents a significant milestone and demonstrates DOE’s intent to finance the project, certain technical, legal, environmental and financial conditions, including negotiation of definitive financing documents, must be satisfied before funding of the loan guarantee.”
Calumet’s CEO Todd Borgmann said: “Through our collaboration with the U.S. DOE, we are thrilled to continue forward on the leading edge of our nation’s sustainable aviation fuel transition. This investment will allow us to leverage our first-mover advantage and unique renewable hydrogen and pretreatment technologies to transform Montana Renewables into a world-scale SAF producer.”
Through the conditional commitment, he continued, the United States is leading the world in renewable aviation, which is the transportation sphere’s most difficult sector to reduce, and which demonstrates the country’s innovation and technical leadership. “Innovation is at the heart of what we do at Calumet,” Bormann added, “and we are honored that Montana Renewables can help solidify our nation’s position as a global leader in the one of energy’s fastest growing niches.”
SAF Takes Flight
The 7,000 gallons of SAF that MRL shipped to the Minneapolis-Saint Paul International Airport were processed from winter camelina grown on farms in Minnesota and North Dakota, according to Media Oakes, communications and public relations director for Calumet, Inc.
MRL has a contracted off-take agreement for 30 million gallons of SAF with Shell Aviation, which distributes the SAF to a variety of airports and airlines.
The 7,000 gallons of SAF produced by MRL sent to the Minneapolis-Saint Paul airport were blended with petroleum-based jet fuel for Delta Airlines. The Delta flight that burned the blended fuel is believed to be the first commercial airline flight in North America fueled by SAF processed from camelina.
Pure SAF has not yet been approved for use by airplanes, Oakes noted, so any SAF-fueled flight is a mixture of SAF and traditional jet fuel. SAF is a combination of synthetic paraffinic kerosene (SPK) and conventional jet fuel meeting ASTM D7566 and ASTM D1655 specifications, she said, adding that SAF is designed to reduce the aviation industry’s carbon footprint and is drop-in compatible with existing aviation fueling infrastructure and aircraft engine technology.
Fleming, Montana Renewables’ CEO, stated in the announcement of the SAF shipment: “We are pleased to remain at the forefront of the SAF revolution. Montana Renewables is an ISCC-approved SAF producer [...] This demonstrates shorter local supply chains, and pioneers camelina as a viable non-food oil that provides additional cash crop potential for farmers.”
Editor’s note: ISCC is the acronym for the International Sustainability and Carbon Certification, which is an independent certification system for sustainability, including feedstocks.
Delta Air Lines flights departing from the Detroit Metropolitan Airport (DTW) also were fueled by 7,000 gallons of SAF delivered by MRL to the Buckeye Pipeline facility in Dearborn, MI. The SAF was then transported by pipeline to the Detroit airport. “Supplying the SAF to DTW marks another significant milestone in the decarbonization of air travel,” Fleming said. “Not only does it bring SAF to Detroit flights, but we are especially pleased to pioneer camelina oil as a non-food renewable [feedstock] that provides additional cash-crop potential for farmers.”
Jerry Perkins, contributing editor