Government funding from the Department of Energy’s Loan Programs Office (LPO) is available for more than just energy projects, as the latest $214 million commitment to a Minnesota chemical plant reveals.
Funding from the DOE will support the development of a facility in Marshall, Minn. to manufacture bio-based organic acids, which were previously imported from other countries (like China).
The new government financing is the single largest U.S. government investment in bioindustrial manufacturing and will reduce emissions and fossil fuel consumption in the chemicals industry.
Solugen, the company building the new chemical plant, has been operating a smaller version of the planned Minnesota facility for three years at a site just outside of Houston.
This financing emphasizes the breadth of support available to companies across the industrial and energy spectrum which face challenges to decarbonization.
As the Department of Energy notes, the project will reduce emissions by up to 18,000 metric tons of CO2e per year (equivalent to the emissions associated with powering nearly ~3,500 American homes annually)—compared to status quo fermentation or petrochemical production methods for similar organic acids.
The DOE attributes the emissions savings to both the biogenic uptake of carbon (e.g., absorbed by plants and soil) from the agricultural feedstock as well as the low-emissions production process. Experts at the energy department also expect additional emissions reductions to accrue from eliminating the need for trans-oceanic shipping when sourcing petroleum feedstock internationally.
Solugen received the funding for its facility through the DOE LPO Title 17 Clean Energy Financing Program, which funds projects in the U.S. for the deployment of not just innovative energy technologies, but technologies that reduce greenhouse gas emissions or air pollution and the reduction in fossil fuel demand.
In a statement, the DOE said that the project is a first-of-its-kind scale-up of a novel technology, leveraging biomass to meet clean energy and climate goals.
Solugen’s project also checks the box for adhering to the Biden Administration’s Justice40 Initiative, which set the goal that 40% of overall benefits of certain federal investments flow to communities that are marginalized by underinvestment and overburdened by legacy pollution, as DOE notes. The city of Marshall includes disadvantaged communities as identified by the Climate and Economic Justice Screening Tool.
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