What prompted a company to choose Moorhead for a $5 billion aviation fuel plant?
MOORHEAD — The announcement of a $5 billion sustainable aviation fuel production facility in Moorhead comes amid work to incentivize production of the biofuel in Minnesota.
DG Fuels, a U.S.-owned sustainable aviation fuel, or SAF, company, has selected Moorhead as the site of a facility to make agricultural and timber waste into low-carbon aviation fuel. According to DG Fuels, the proposed facility will produce 193 million gallons of fuel annually and is expected to begin production in 2030.
If the $5 billion facility in Moorhead is built, it would be a massive investment into the city. Moorhead, including residential and commercial properties, has a value of just over $4 billion, according to Derrick LaPoint, president and CEO of Downtown Moorhead Inc.
In addition to the hundreds of acres of open, city-owned land in Moorhead, Minnesota has a lot to offer companies hoping to produce SAF in the state, including a tax credit and a budding supply chain committed to purchasing the fuel.
DG Fuels did not respond to a request for comment on this story.
Sen. Rob Kupec, DFL-Moorhead, was a co-author of the bill that gives companies a tax credit for producing SAF in Minnesota. The law, signed by Gov. Tim Walz in 2023, gives companies credit of $1.50 for each gallon of SAF produced or blended in Minnesota and sold to a company that will use the fuel in an aircraft leaving from a Minnesota airport.
Minneapolis-St. Paul International Airport is a hub for Delta Air Lines, and a tax credit for companies creating SAF for that airport would help it keep that status, Kupec said. SAF production in Minnesota could also benefit the state's farm economy.
"This is another huge market for our farmers to be able to tap into locally, so if other commodity markets are some other direction, we would have this as a good, reliable base," he said.
The Minnesota SAF Hub, a coalition of companies and organizations in Minnesota, has also been working to attract SAF producers to the state.
The Hub was created by Greater MSP, or the Minneapolis Saint Paul Regional Economic Development Partnership. Members of the coalition include Delta, Bank of America, Ecolab, Xcel Energy, the state of Minnesota, the Metropolitan Airports Commission and the University of Minnesota.
The coalition aims to fight climate change by decarbonizing air travel while creating jobs in Minnesota, said President and CEO Peter Frosch. Greater MSP is in talks with more than a dozen SAF producers around the world to encourage them to produce SAF in Minnesota, he said.
"DG is the first major commitment by a private company to do that," he said. "The scale of that project is obviously very significant and would bring us meaningfully along the path of our big ambition."
The Hub was started in August 2023. It was sparked by Delta's long-term goal of achieving net-zero carbon emissions by 2050 and short-term goal of procuring 400 million gallons of SAF each year by the end of 2030, Frosch said.
"This is all about delivering a large volume of market-affordable SAF to MSP Airport as quickly as possible, then scaling that volume as much as we can, as fast as we can, and pushing down the carbon score and pushing down the price as fast as we can," he said.
In September, the Minnesota SAF Hub announced the development of the first SAF blending facility in Minnesota. Blending facilities are needed because airlines and airplane manufacturers require at least a 50-50 blend of SAF and conventional jet fuel today, Frosch said.
The blending facility is being developed by Flint Hills Resources at its Pine Bend refinery in Rosemount, Minnesota. Fuel blended at the facility will be delivered to the Minneapolis-St. Paul Airport.
In its first year, the Hub also created a demand consortium of companies that agreed to pay extra for the first 15 million gallons of SAF produced in Minnesota and celebrated the first airplane fueled by SAF flying out of the Minneapolis-St. Paul Airport, Frosch said.
He said the Hub has customized conversations with each company considering Minnesota as an option, taking into account each business's needs.
"We're going to work on solving every problem that has to be solved between the tarmac of MSP Airport and every corner of the state so that it's one of the easier places in the world for anyone who wants to make SAF to do that," he said.
With the DG Fuels announcement, one of the next factors the Hub will tackle with the company is where agricultural and forestry waste used in fuel will come from, how much will be needed and how it will reach the facility, Frosch said.
While Moorhead is beyond Greater MSP's usual reach, Frosch said it was expected that efforts to bring SAF production to Minnesota would extend beyond the Twin Cities metro.
"We fully anticipated that if we need three to five SAF suppliers in Minnesota, very few of those might end up being in the metro area," he said. "It's kind of like this new era of Greater MSP where we're doing much bigger projects that deliver value across the state."
