Sustainable Business Chevron, Bunge to Establish 50:50 JV for Renewable Fuel Feedstocks
Under a MOU, Chevron and Bunge are planning to set up a joint venture to develop renewable fuel feedstocks in the background of the rising demand for renewable fuels. For this purpose, Bunge will provide its soybean processing facilities while Chevron will contribute approximately 600 million dollars in cash to the joint venture.
California/USA – Chevron and Bunge North America have proposed a 50/50 joint venture to meet the demand for renewable fuels and develop lower carbon intensity feedstocks. Upon finalization of the joint venture, Chevron and Bunge’s partnership would establish a reliable supply chain from farmer to fueling station for both companies.
Bunge is expected to contribute its soybean processing facilities in Destrehan, Louisiana, Illinois and Cairo, and Chevron is expected to contribute approximately 600 million dollars in cash to the joint venture. Through the joint venture, the two companies anticipate doubling the combined capacity of the facilities from 7,000 tons per day by the end of 2024. The joint venture would also pursue new growth opportunities in lower carbon intensity feedstocks, as well as consider feedstock pretreatment investments.
Through the joint venture, the two companies anticipate doubling the combined capacity of the facilities by the end of 2024.
“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. This relationship with Chevron would enable Bunge to better serve our farmer customers in the growing renewable fuels sector,” said Greg Heckman, Bunge CEO.
Under the proposed joint venture arrangement, Bunge will continue to operate the facilities, leveraging its expertise in oilseed processing and farmer relationships to manage origination and marketing of meal and plant-based oil. Chevron would have offtake rights to the oil which it will use as renewable feedstock to manufacture diesel and jet fuel with lower lifecycle carbon intensity, in addition to providing market knowledge and downstream retail and commercial distribution channels.
The creation of the proposed joint venture is subject to the negotiation of definitive agreements with customary closing conditions, including regulatory approval.