Beaver Lake Biofuels Project Bites The Dust In Louisiana

SunGas Renewables Inc. announced it will cease further development of the Beaver Lake Biofuels project, a proposed wood fiber-to-low carbon methanol facility in central Louisiana near Alexandria.

Beaver Lake planned to integrate three SunGas S1000 syngas production systems together with downstream technologies to produce approximately 553,000 metric tons per year of low carbon methanol and geological storage of 1.1 million metric tons per year of biogenic CO2. This combination of scale and low product carbon intensity supported a globally competitive bio-methanol offering, illustrating the potential viability of this technology pathway as decarbonization requirements become more stringent, according to the participants.

This decision reflects a combination of factors that affected Beaver Lake’s ability to advance on the timetable required, including slower-than-expected market adoption of low-carbon marine fuels (specifically low carbon methanol), uncertainty regarding the carbon capture and storage pathway for the project, and clarity on the available regulatory support and financing conditions needed to support a project of this scale.

“We continue to believe low carbon methanol can help decarbonize the maritime, aviation and chemicals industries. However, given the current regulatory uncertainty, slower customer uptake and broader financing and infrastructure constraints, we do not believe the conditions are in place to move the project forward successfully,” says Robert Rigdon, CEO of SunGas.

As recently as March, Carbon Direct and C2X announced a new collaboration to advance the Beaver Lake Biofuels project. Carbon Direct’s Supply Services business provides scientific expertise and carbon market knowledge to deliver the highest standards for durability, measurement, and verification. Carbon Direct’s Supply Services team is also a go-to-market channel for CDR credits, facilitating offtake agreements with buyers to support project development.

C2X develops, owns and operates low carbon molecule production facilities in strategic locations, which supply the shipping, chemical, aviation and industrial sectors with low carbon fuels and feedstocks. C2X is the majority owner of SunGas Renewables Inc, the parent company of Beaver Lake. C2X is majority controlled by the A.P. Moller Group with ENEOS, Japan’s largest integrated energy company, as a minority shareholder.

Beaver Lake planned to repurpose the former International Paper Pineville Mill site in Louisiana, which has been largely vacant since its closure in 2009. With an estimated total investment of approximately $2.5 billion, the Beaver Lake project was expected to create up to 1,150 construction jobs, and more than 600 direct and indirect jobs in the local community when fully operational.

Biomethanol offers a near-term decarbonization solution for hard-to-abate sectors including shipping and aviation. The fuel is compatible with existing infrastructure and retrofitted marine engines, reducing lifecycle CO₂ emissions by up to 95%, while also dramatically improving air quality. As there are approximately 60 methanol-capable vessels currently in operation and more than 300 on order, the greatest barrier to scale is the availability of reliable, low-carbon biomethanol. Biomethanol also serves as a feedstock for sustainable aviation fuel (SAF), providing a pathway to decarbonize aviation.

Last December Beaver Lake Renewable Energy LLC signed a long-term agreement with Microsoft, including a CDR offtake agreement with Microsoft for 3.6 million metric tonnes of carbon removal over 12 years. Beaver Lake was to deliver CRUs, each representing one metric ton of carbon dioxide that had been durably removed from the atmosphere and permanently stored in secure geologic formations in Louisiana.

SunGas Renewables announced in July 2023 it was considering the investment in the facility in Rapides Parish. “As the only state in the Gulf South with a climate action plan, Louisiana is a global leader in the energy transition and companies like SunGas Renewables have taken notice,” Gov. John Bel Edwards said at the time. “I applaud SunGas Renewables for pursuing this massive investment that would create quality, high-paying jobs in central Louisiana for our talented workers. If it moves forward, this project will be another milestone in our efforts to grow and diversify our economy. The state will continue to support the company’s efforts to bring it to completion.”

The Danish shipping and logistics company A.P. Moller-Maersk had signed a letter of intent for an offtake agreement with SunGas to purchase fuel from the proposed Pineville facility for its fleet of methanol-powered container vessels.

To support the project in Pineville, the state of Louisiana prepared a competitive incentives package that included the comprehensive workforce development solutions of LED FastStart and a $6 million performance-based grant for infrastructure improvements upon meeting investment and employment targets.