USA BioEnergy and its subsidiary Texas Renewable Fuels are receiving more than $150 million in state and local incentives to develop a $1.7 billion biorefinery in Bon Wier, Texas, where it will convert 1 million green tons of wood waste into 34 million gallons a year (mgy) of sustainable aviation fuel (SAF), renewable diesel and naphtha. According to the companies, future expansion will double the plant’s capacity to 68 mgy. Offtake agreements have been secured with a major trading and logistics company and an airline, details of which the firms will release in the months ahead. The project also intends to capture and sequester 50 million metric tons of CO2 over the life of the biorefinery.

“Biomass gasification is a well-established method of converting any waste stream into synthesis gas, which can readily be converted into hydrocarbon fuels by the Fischer-Tropsch process and upgrading technologies,” said Robert Freerks, vice president of product development with USA BioEnergy. “The fuels produced using carbon capture and storage will have at least three times greater reduction in greenhouse gas emissions than fuels produced using other types of feedstock.”

Forest2Market was hired to conduct an extensive feedstock study to confirm the volumes available and pricing projections for wood waste in the region.

USA BioEnergy is working with Citigroup for permanent debt financing. David Prom, chairman of USA BioEnergy, said, “We’re hedging a portion of our environmental credits to provide lenders with certainty of payment. We do this as a risk-mitigation measure to give comfort to our financial partners.”

USA BioEnergy stated it is committed to delivering more than 100 mgy of sustainable aviation fuel into Los Angeles International Airport.

The company expects the Bon Wier, Texas, biorefinery project to be operational in late 2025.