Major oilseed processor Bunge has announced a 50/50 joint venture with Chevron U.S.A. to develop soybean-based renewable fuel feedstocks and ramp up production of renewable diesel and jet fuels.
Under the agreement, Bunge is providing two of its soybean processing facilities — one in Destrehan, La., and the other in Cairo, Ill., — and Chevron is offering about $600 million in cash, a news release from the companies said. Bunge will continue to operate the facilities, while Chevron would have the first right of refusal for any of the soybean oil produced to use as a renewable feedstock to manufacture renewable diesel and sustainable jet fuel.
In addition, Chevron will also be "providing market knowledge 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,” Greg Heckman, the CEO of Bunge, said in the release. “Together, we share a commitment to sustainability and reducing carbon in the energy value chain.”
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A Chevron spokesman told Agri-Pulse that, at least in the short term, the company would be focusing on producing renewable diesel, which is chemically equivalent to diesel but produced mainly with soy oil instead of petroleum, because of current available market incentives around it.
Production of renewable diesel is increasing across the U.S., and with it, the demand for the soybean product. The partnership between Chevron and Bunge isn't the first hoping to break into the market.
On Aug. 18, ADM and Marathon Petroleum Corp formed a 75/25 joint venture that would own and operate ADM's soybean processing facility in Spiritwood, N.D. The goal of that venture is to produce approximately 600 million pounds of refined soybean oil annually, enough feedstock for about 75 million gallons of renewable diesel per year.
Chevron and Bunge's goal is to double the combined capacity of the soybean processing facilities to 14,000 tons per day by the end of 2024.
The joint venture is “subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval,” the release said.
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