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Chevron, Bunge team up to produce renewable diesel, SAF feedstocks
02 September 2021IHS Markit Energy Expert
Chevron and agribusiness giant Bunge have signed a memorandum of
understanding to create a joint venture that will develop lower
carbon intensity feedstocks for renewable fuels, the companies said
2 September.
Once a final agreement is reached, Bunge and Chevron said the JV
would "establish a reliable supply chain from farmer to fueling
station for both companies."
Bunge will contribute its soybean processing plants in
Destrehan, Louisiana, and Cairo, Illinois, to the 50-50 partnership
and Chevron will contribute about $600 million in cash.
The companies said the JV will double the combined capacity of
Bunge's two facilities to 14,000 metric tons/day by the end of
2024. In addition, they said the JV will pursue other low-carbon
feedstocks and potentially invest in feedstock pretreatment.
Chevron would have offtake rights to use the soybean oil as
feedstock to produce renewable diesel and sustainable aviation
fuel, the companies said. They added that Chevron also would
provide the JV with knowledge of the transportation fuels market
and downstream retail and commercial distribution channels.
"As the world's largest oilseed processor, we are pleased to
expand our partnership with an energy industry leader to increase
our participation in the development of next generation, renewable
fuels," Bunge CEO Greg Hackman said in a statement.
"This relationship with Chevron would enable Bunge to better
serve our farmer customers by accessing demand in the growing
renewable fuels sector," he added.
Chevron said its expansion into the renewable fuel feedstock
value chain is part of a "higher returns, lower carbon
strategy."
As more companies announce expansion plans to begin renewable
diesel production, feedstock supply has become an increasing
concern.
The announcement from Chevron and Bunge comes weeks after
Marathon Petroleum
formed a JV with agricultural processing giant Archer Daniels
Midland (ADM) to produce renewable diesel from soybean oil from
ADM's 600 million lb/year facility in Spiritwood, North Dakota.
And Phillips 66 in April bought a minority stake in a
planned soybean processing plant in Iowa that includes an offtake
agreement for all of the facility's 4,000 b/d output.
The wider decarbonization push at Chevron saw it reveal in March it had reached
2023 upstream carbon intensity reduction targets three years ahead
of schedule, and unveil new carbon reduction and offset initiatives
it plans to implement in the next decade.
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