Louisiana Green Fuels Project Gets Financial Support

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Louisiana Community Development Authority (LCDA) recently approved the issuance of up to $1.1 billion in revenue bonds to finance a portion of Strategic Biofuels' (Columbia, Louisiana) Louisiana Green Fuels (LGF) low-carbon renewable fuels project at the Port of Columbia. This comes after other positive developments in support of the project throughout 2022.

"Over the course of 2022 we have aggressively advanced the LGF project across multiple dimensions. This latest bond cap approval substantially enhances the project financing structure," Strategic Biofuels Chief Executive Officer Paul Schubert said in a press release.

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The plant would process forestry waste feedstocks to produce 33 million gallons per year of renewable fuels--consisting of 29 million gallons per year of renewable diesel (88%) and 4 million gallons per year of renewable naphtha. The project also entails constructing a unit to capture carbon dioxide (CO2) generated during production, to be stored on site. Strategic Biofuels has picked Koch Project Solutions, a subsidiary of Koch Industries Incorporated (Wichita, Kansas), to provide engineering, procurement and construction services at the alternative fuel production plant. The project is in the planning stage, and a final investment decision is expected in the first quarter of 2023. Construction is expected to kick off later in the year, while the LCDA plans to issue the bonds in late 2023, according to the press release.

In February, Louisiana Governor John Bel Edwards allocated $250 million in private activity bonds (PABs) for the project, in addition to the $200 million allocated in 2021. According to the Congressional Research Service, "the federal tax code allows state and local governments to use tax-exempt bonds to finance certain projects that are considered private activities."

"We are excited about the rapid advancement towards construction of Strategic Biofuel's Louisiana Green Fuels project in Caldwell Parish," Edwards said in a press release. "The project's negative carbon footprint fuel production continues to keep Louisiana at the forefront of innovation in the renewable fuel industry. Furthermore, it illustrates what is practical and achievable on the path to meet our Climate Initiatives Task Force goal of net zero greenhouse gas emissions by 2050."

In terms of the LGF project site, the Port of Columbia recently secured a $1 million grant from the Department of Homeland Security (DHS) and Federal Emergency Management Agency (FEMA) that will enhance the port's security infrastructure in support of the project.

"This funding commitment from DHS and FEMA recognizes our deeply carbon negative footprint LGF project as a key contributor to our country's energy transition and worthy of federal investment into its security," Schubert said.

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