Following a memorandum of understanding (MoU), Chevron USA and Bunge North America are proposing a 50/50 joint venture that will see the pair increase the production capacity of renewable-fuel facilities to meet customer demand, alongside the development of lower-carbon-intensity feedstocks.
Through the JV, both companies aim to establish a reliable renewable-fuel supply chain, linking the source to the farmer, right through to the end customer at the fueling station, for example. Bunge will contribute soybean processing facilities in Destrehan, Louisiana, and Cairo, Illinois, while Chevron is expected to provide the JV with a US$600m cash investment.
Chevron and Burge estimate that the partnership will enable the combined capacity of all the facilities to double to 14,000 tons per day by the end of 2024. In addition to the production of renewable fuels, the two companies will evaluate new growth opportunities in lower-carbon-intensity feedstocks and consider investments in feedstock pre-treatment.
If the proposed joint venture goes ahead, Bunge will continue to operate its facilities while leveraging its knowledge in the field of oilseed processing and farmer relationships to manage the origination and marketing of meal- and plant-based oil. Chevron will then have offtake rights to the oil for use as renewable feedstock for the manufacture of diesel with a much lower lifecycle carbon intensity. The fuel manufacturer will also provide the partnership with market expertise and commercial distribution channels.
The proposed joint venture is still subject to changes and regulatory approval.