Fulcrum BioEnergy breaks ground on 10.5 million gallon waste to jet fuel Sierra plant
Fri 18 May 2018 – Waste-to-fuels company Fulcrum BioEnergy has broken ground on its Sierra BioFuels Plant in McCarran, Nevada, that is to supply airlines with around 10.5 million gallons of fuel each year when commercial operations start in the first quarter of 2020. Sierra will be the first commercial-scale plant in the United States converting municipal solid waste (MSW) that would otherwise have been sent to landfill into low-carbon renewable transport fuel. Utilising Fulcrum’s proprietary thermochemical process, Sierra will convert around 175,000 tons of household garbage annually. The company is planning similar plants sited near large metropolitan areas where it has already secured long-term supplies of feedstock, fuel logistics and fuel offtake agreements.
“Launching the final construction phase of Sierra is another milestone for Fulcrum, our partners, Northern Nevada and the low-carbon fuels industry,” said CEO Jim Macias at the groundbreaking event. “We’ve spent 10 years developing, designing, testing, improving and demonstrating this new process so that it is now ready for commercial deployment. By converting waste into low-carbon transportation fuel, Fulcrum provides a real solution to the aviation industry’s commitment to reduce carbon emissions.”
Compared to traditional petroleum fuel, Fulcrum says its process will reduce GHG emissions by more than 80%. Around 500 jobs will be created during the construction phase with 120 permanent plant staff and other indirect jobs following when operations begin.
The company says the future projects in development will follow the same approach as Sierra with fixed feedstock costs, fuel offtake prices hedged against oil, guaranteed plant performance and a low cost of production that is expected to provide attractive operating margins. Collectively, these future plants are expected to have the capacity to produce more than 300 million gallons of jet fuel annually.
United Airlines and Cathay Pacific Airways have each entered into equity investment deals and 10-year offtake agreements with Fulcrum. In August 2014, Cathay negotiated a supply agreement for an initial 375 million gallons of biojet over the period, representing around 2% of the airline’s annual fuel consumption (see article). The following year, United announced it had taken an equity stake in Fulcrum valued at $30 million and both parties agreed to jointly develop up to five projects located near United’s hubs that would be expected to produce up to 180 million gallons a year. In addition, United has the opportunity to purchase at least 90 million gallons of Fulcrum fuel a year for 10 years at a price competitive with conventional jet fuel (see article).
In 2016, BP Ventures said it was taking a $30 million equity investment in Fulcrum and a 10-year offtake agreement to purchase 50 million gallons annually for supply into aircraft at Air BP key hubs in North America (see article).