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Chevron, Bunge team up to produce renewable diesel, SAF feedstocks
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.
--Original reporting by Aaron Alford, OPIS.
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