The East is Green: SK makes major ESG investment in Fulcrum BioEnergy, how will this alter the trajectory for low-carbon fuels from waste?

In South Korea, SK and an undisclosed Korean private equity partners have invested $50 million in Fulcrum BioEnergy, the waste-to-fuels company now commissioning its first commercial project near Reno, Nevada.

SK Inc. aims to make an inroad into the Korean bioenergy market with SK Ecoplant, another SK Group company, as a potential partner. SK Ecoplant is a global engineering and construction firm that has placed a priority on environmentally friendly energy and infrastructure projects.

The Fulcrum 2022 backstory

Fulcrum has developed a proprietary process to convert the organic materials found in MSW to low-carbon drop-in fuels, which can be distributed in the same pipelines as traditional petroleum products. Fulcrum’s bio jet fuel was approved and certified as an alternative drop-in fuel for the aviation sector. Fulcrum completed the construction of the world’s first commercial-scale MSW-based biofuels refinery in Nevada in July 2021.

Fulcrum’s major shareholders include US Renewables Group and Rustic Canyon Partners, the company’s two founding investment firms, BP, United Airlines and Waste Management.

In July, we reported that Fulcrum completed construction on the world’s first commercial-scale plant converting household garbage into low-cost, zero-carbon transportation fuels. Through Fulcrum’s revolutionary process, the Sierra BioFuels Plant located east of Reno, Nevada, will convert 175,000 tons of prepared municipal solid waste (MSW) into approximately 11 million gallons of zero-carbon syncrude annually, which will then be upgraded to transportation fuels such as sustainable aviation fuel, renewable diesel and renewable gasoline – Fulcrum Fuel™. With construction complete, start-up and commissioning on the plant has commenced and fuel production is expected to begin during the fourth quarter of 2021.

In February, we reported that Essar Oil (UK) Limited (Essar) has joined forces with Fulcrum BioEnergy Limited (Fulcrum) and Essar’s subsidiary company Stanlow Terminals Limited to create a new facility which will convert non-recyclable household waste into sustainable aviation fuel (SAF) for use by airlines operating at UK airports.

This innovative bio-refinery will convert several hundred thousand tonnes of pre-processed waste, which would have otherwise been destined for incineration or landfill, into approximately 100 million liters of low carbon SAF annually.

Fulcrum has identified Gary, Indiana as the site of its next commercial project. At one time, Fulcrum expressed a goal of building eight commercial plants by 2022.

More on the innovative Fulcrum approach to financing its first commercial: I Don’t Like Losses, Sport: The invention of bioeconomy risk insurance and Fulcrum BioEnergy’s leap to scale.

You can view our Multi-Slide Guide here.

The SK backstory

SK Inc. is a strategic investment holding company for SK Group, the third-largest of South Korea’s legendary chaebols, with a historic background in textiles, long since expanded into pharma, telecommunications, batteries. semiconductors, mining and more. SK companies combined have $106 billion in annual global revenue and more than 100,000 employees worldwide. 

The Fulcrum 2022 outlook

Starting in 2022, Fulcrum’s Nevada plant is set to begin producing approximately 11 million gallons of syncrude annually, which will then be upgraded to transportation fuels, such as sustainable aviation fuel. Fulcrum anticipates increased production, as the firm has secured a consistent supply of MSW feedstock through long-term agreements with major waste services companies in the U.S. and has secured offtake agreements with major energy companies and airline companies.

Reaction from SK

“Fulcrum’s novel process of biofuel production can make a meaningful contribution to tackling environmental challenges by significantly reducing GHG emissions and addressing landfill capacity shortages,” said Moohwan Kim, Executive Vice President of SK Inc. “Leveraging Fulcrum’s innovative process, SK Inc. will explore further opportunities with one of its affiliates, SK Ecoplant, which has transformed into an environmental and energy solution provider, to identify opportunities in the domestic market and at the same time expand its presence in the global waste-to-fuel and bioenergy markets.”

The Bottom Line

Think three things. One, we can surmise that Fulcrum’s plant is hitting all the commissioning milestones, else why would SK move forward and not wait? Second, think “Second commercial” – plant number one is paid for and built, this is not about then, it’s about now. Three, think Asia. Already, a Japanese consortium has been studying the technology and JAL has been testing. The pivot to Asia has been long expected, since Cathay Pacific invested in the technology some years ago. When the technology is ready, the partner arrives.

For more information on SK, visit http://www.sk.com/.