Nacero invited by DOE to submit Part II application for loan guarantee to finance Texas SAF facility
Nacero Inc. announced May 5 that its Nacero Texas subsidiary has been invited by the U.S. DOE to submit a Part II application for a loan guarantee through the Loan Programs Office’s Title XVII Innovative Clean Energy Loan Program for 75 percent of the capital needed for its multibillion-dollar flagship sustainable aviation fuel (SAF) facility in Texas.
When Nacero’s facility is completed, it will be the largest single commercial-scale methanol-to-jet facility in the world, the company stated.
“Receiving an invitation to Part II of the DOE’s Title XVII Loan Program through the LPO is a major milestone towards achieving final investment decision (FID) for Nacero’s flagship facility,” said Jess Cole, chief financial officer of Nacero. “We have benefited greatly from the DOE’s guidance and have been impressed by the department’s commitment to the decarbonization of the aviation industry through their support for the development of commercial-scale facilities. Part II success will contribute meaningfully to the overall financeability of our first project under a platform that aims to commercialize new technologies within the clean-energy space to reduce emissions in hard-to-abate industries.”
The DOE’s invitation to submit a Part II application is not an assurance that the DOE will invite the applicant into the due-diligence and term-sheet negotiation process, that DOE will offer a term sheet to the applicant, or that the terms and conditions of a term sheet will be consistent with terms proposed by the applicant.
These are dependent on the results of DOE review and evaluation of a Part II application, and DOE’s determination whether to proceed.
If the project successfully reaches loan closing, the DOE-guaranteed loan would provide approximately 75 percent of the total capital needed to produce 250 million gallons per year (mgy) of zero-sulfur products, including up to 145 mgy of SAF as well as low carbon aviation fuel (LCAF), naphtha, and high-value LPGs utilizing Topsoe’s SynCOR Methanol™ and MTJet™ technologies.
“Moving into Part II of the LPO program significantly de-risks our path to FID by providing approximately 75 percent of the project-level financing needed for our first facility,” added Bruce Selkirk, CEO of Nacero. “We’re excited to continue our relationship with the DOE and working towards a conditional commitment to support our efforts around phase 1. Nacero will submit a Part II application in the coming months with a goal of receiving a commitment from the DOE prior to FID, which is targeted for mid-2024.”
SAF and LCAF will be produced using renewable natural gas (RNG) sourced primarily from dairy farms and landfills, and natural gas from mitigated flared-gas sources located in Texas.
The facility products will contain no sulfur, carbon capture will be integrated into the design, and the plant will utilize 100 percent renewable power.
As a result, the manufacturing process avoids significant emissions and release of particulate matter from jet engines compared to traditional jet-fuel processes.