Fulcrum Bioenergy, Aiming to Produce ‘Net-Zero’ Jet Fuel From Plastic Waste, Hits Heavy Turbulence

by James Bruggers (Inside Climate News) The California company has defaulted on $289 million in Nevada bonds and put $500 million in financing for a facility in Indiana on hold. Meanwhile, U.S. senators don’t want tax credits financing plastics-to-jet-fuel schemes. -- Six Senate Democrats last month sent a letter to the head of the Internal Revenue Service urging the federal tax agency to prohibit companies that make fuels from plastics and other petroleum products from qualifying for federal tax credits under the Inflation Reduction Act, President Biden’s landmark climate legislation.

The move was the latest in a string of bad developments for Fulcrum Bioenergy, the California firm that is seeking to turn Chicago-area trash and plastic waste into “sustainable” jet fuel at a Gary, Indiana, factory and construct a similar plant near Houston.

Shortly before the senators came out against tax credits for fuels made from dirty, high-energy processes the plastics industry calls “advanced recycling,” Fulcrum told the Indiana Finance Authority that it would delay financing its Gary project, called Centerpoint, with $500 million in bonds that the state authority had previously approved, a Finance Authority spokesperson confirmed.

Word of the delay came just days after Kansas City-based UMB Bank posted a notice on Oct. 17 that Fulcrum had defaulted on $289 million in bonds it used to finance the company’s first trash-to-fuel plant outside Reno, Nevada, called Sierra.

The company has said it is also working to construct a plant about 25 miles east of Houston in Baytown, a city that’s also host to ExxonMobil’s sprawling, 3,400-acre Baytown Compex. Fulcrum has set a 2026 date to begin commercial production of fuel there at what it is calling its Trinity Fuels Plant with a goal of making 31 million gallons of “net-zero carbon jet fuel” each year.

The company is seeking to cash in on the airline industry’s desire to develop “sustainable aviation fuel,” often shortened to SAF, to lower greenhouse gas emissions from aviation. Still early in its development phase, SAF can be made with a variety of non-petroleum-based renewable feedstocks such as food scraps and yard waste, woody biomass, and fats, greases and oils, according to the U.S. Department of Energy.

But experts have said using a waste feedstock containing plastic complicates the fuel-making process in a couple of ways. First, plastic is made from a myriad of chemical mixtures, and gasification systems used to process it function the best with a consistent feedstock. And the more plastic in an SAF plant’s feedstock, the lesser the climate benefits because plastic is made from fossil fuels and emits greenhouse gases and other air pollutants when heated to high temperatures.

Making fuel out of plastic can also increase cancer risks to one in four over a lifetime of exposure to air pollution at production facilities, according to a February report based on a review of Environmental Protection Agency records by ProPublica and the Guardian. That’s 250,000 times the level deemed “acceptable” by the EPA.

In a statement, the United spokesman said that Fulcrum was among several SAF companies that the airline has invested in or has purchase agreements with. On its website, United says SAF “is the fastest and most effective way we’re reducing lifecycle emissions across United’s fleet” and that “investing in and using more SAF across the entire airline industry will help fly us all toward a lower carbon future.”

Fulcrum describes its technology as “part of the solution by providing the aviation industry with net-zero carbon, drop-in transportation fuel while reducing the amount of waste being disposed of in our landfills as we utilize this abundant, low-cost resource as feedstock.”

The Gary project was announced in 2018 and construction was originally supposed to have begun in 2020, with completion within two years. The company’s website now predicts a 2026 completion date.

The plant is planned for a parcel of former industrial land where abandoned concrete silos rise from the remains of a cement factory that helped build the country’s interstate highway system. Fulcrum has proposed to construct a gasification plant and refinery to turn 700,000 tons of Chicago-area municipal solid waste—including as much as 30 percent plastic—into 31 million gallons of jet fuel annually. READ MORE

Fulcrum, a California-based company, has been working to bring a waste-to-jet-fuel plant to Gary for about five years. The proposed plant, dubbed the Gary Centerpoint BioFuels Plant, would occupy the footprint of a former cement factory in the city's Buffington Harbor area. The project has drawn a lot of attention over the past few years, with many residents and environmental advocates saying the development will bring more industrial contamination to Gary's already-polluted lakefront.

The Indiana Department of Environmental Management approved Fulcrum's air permit on Aug. 16 of 2022. GARD originally filed a petition in September 2022 with the Indiana Office of Environmental Adjudication, which acts as the ultimate authority to review IDEM decisions. GARD filed an amended petition in December 2022 after the Environmental Integrity Project's Center for Applied Environmental Science conducted a technical review of the permit. GARD is now working with Kim Ferraro, senior attorney of the Conservation Law Center and Michael Zoeller, senior attorney with the Environmental Law and Policy Center.

Throughout the past year, GARD's attorneys combed through IDEM documents and took depositions. Zoeller said the motion for summary judgement is a "description of the evidence that we've gathered during discovery that supports the three claims" made when they filed the petition last December. Those three claims are that IDEM cannot accurately regulate the plant's emissions because the agency does not know the exact composition of the "feedstock" that will be used to produce the jet fuel, that IDEM did not independently verify Fulcrum's emissions claims and that IDEM cannot confirm Fulcrum's air permit will be protective of human health.

Fulcrum claims that once operational, the Centerpoint plant will divert 700,000 tons of waste from regional landfills and will produce 31 million gallons of aviation fuel annually. Fulcrum's process involves taking municipal waste from the Chicago area and turning it into a fluffy material called "feedstock." The feedstock would be loaded onto trucks and taken to the Gary plant where it would be refined into a low-carbon renewable jet fuel. Before being sold, the fuel would be blended with traditional jet fuel.

However, GARD argues that because the contents of municipal waste are highly variable, Fulcrum's emission estimates cannot be precise. READ MORE