Air BP, BP Ventures invest $30M in biojet producer Fulcrum Bioenergy; ink 500M gallon, 10-year offtake deal

November 7, 2016 |
L to R E.James Macias, President and CEO of Fulcrum, signs agreement with David Gilmour, Vice President Technology, Commercialisation and Ventures, BP Ventures.

Fulcrum CEO Jim Macias, signs agreement with David Gilmour, VP Technology, Commercialisation and Ventures, BP Ventures.

In California, BP announced the creation of a strategic partnership between its BP Ventures and Air BP businesses with Fulcrum BioEnergy, a pioneer in the development and production of low-carbon jet fuel, in which BP will invest $30 million.

As an equity investor, BP has secured a 10 year offtake agreement with Fulcrum for 50 million US gallons per year, from their plants under development across North America. In addition, as a preferred supply chain partner, Air BP will distribute and supply biojet into aircraft at key hubs across North America.

Parallel to United Airlines deal

The offtake deal and investment parallels a $30M investment and 1.5B billion gallon offtake deal with United Airlines announced in June 2015. Those offtake contracts are worth an estimated $1.58 billion over the 10-year offtake span, based on the (then) current jet fuel price of $1.76 per gallon, according to Digest calculations.

Pace of expansion

In September, Fulcrum Bioenergy said it is planned to develop eight of its MSW-to-biofuel facilities by 2022, including its first 11 million gallon facility that is under development near Reno, Nevada that will be online during the second half of 2018.

Those new facilities, five of which will be developed by United Airlines as part of their investment deal sealed in June 2015, will be between three and six times the size of the Reno facility.

The Fulcrum technology and 8-Slide Guide

Fulcrum has developed and demonstrated a reliable and efficient process for producing low-cost, sustainable biojet from municipal solid waste.

More about Fulcrum in our 8-Slide Guide, here.

Reaction from the stakeholders

”We have a deep understanding of our customers’ challenges to achieve their lower carbon goals. This agreement gives Air BP guaranteed access to product which will help meet these challenges,” said Jon Platt, CEO, Air BP. “Securing this supply helps secure the future competitiveness of Air BP, and our place as a leader in the industry.”

“We’re excited to be entering into this multi-faceted strategic relationship with BP, a recognized leader in the supply of fuel products and services to the global aviation industry,” said E. James Macias, Fulcrum’s President and Chief Executive Officer.  “This partnership will accelerate Fulcrum’s ability to produce and deliver low-carbon, low-cost jet fuel from Fulcrum plants located across North America to our commercial and military aviation customers,” added Macias.

“BP is committed to supporting a transition to a lower carbon economy,” said Tufan Erginbilgic, CEO of BP’s downstream segment. “With support from two of Air BP’s strategic customers, Cathay Pacific Airways and United Airlines, Fulcrum is well advanced in its goal to produce and supply scalable biojet, and BP is excited by the opportunities that this partnership offers.

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