Marco Bello/Reuters Sustainable aviation fuel is finally having its moment, a success story that shows the challenges that promising climate technologies have to overcome to scale up enough to make a real dent in emissions. Pat Gruber learned the hard way how difficult it can be to raise money for novel climate tech. When he went to apply for a US federal loan to build a big new SAF factory, he thought the money would be easy to lock in. It wasn’t. It took three years of planning and negotiations, and more than $200 million, for Gruber to prove that his company, Gevo, was ready to start producing large volumes of advanced corn-based jet fuel, and wouldn’t fumble a high-dollar taxpayer investment. Although most of Gevo’s method is based on well-established chemistry and industrial processes, the particular way they’re put together is new — the sort of innovative, capex-intensive climate tech factory that Wall Street remains largely averse to funding, and that the Department of Energy wanted reams of proof to show it could work. Getting a federal loan “is not for the faint-hearted,” Gruber told Semafor. But at the same time Gruber and other SAF entrepreneurs have been nailing down their production plans, airlines have become increasingly desperate to get their hands on as much of it as they can, creating a confluence of conditions that has made now a better time than ever to be raising money for SAF. The US Department of Energy this month conditionally agreed to lend Gevo $1.46 billion for the construction of a South Dakota factory that will be the first of its kind in the US and which will more than double US production of SAF. The announcement was the latest in a recent flurry of SAF fundraising. Montana Renewables, which makes SAF from vegetable oils, locked in a $1.44 billion DOE loan on the same day. Twelve, which makes it from captured CO2, secured $645 million in a round led by private equity firm TPG. And another CO2-based SAF startup, Infinium, raised $1.1 billion from Brookfield. |