USA BioEnergy has big US plans

opinion

by Fayaz Hussain

March 17, 2025

Nick Andrews, founder of USA BioEnergy, has ambitious plans to develop multiple advanced biofuels facilities across the United States.

Andrews’ story with USA BioEnergy began about nine years ago, inspired by initiatives like the US Navy’s Green Fleet programme under former Secretary Ray Mabus. While he wasn’t directly involved in any of the three companies that received the initial $210m government grants that kickstarted the advanced fuels industry, Andrews became involved as a commercial real estate broker to find suitable locations for clean fuels projects in Arizona.

That’s where his interest in biofuels began to grow. “I started attending many conferences … related to forestry, aviation or policy,” Andrews tells SAF Investor. “The more I dug in, the more I started building a team around our desire to really lead in the energy transition.”

Key early hires included Dr. Kim Arcuri, who developed the initial design basis for creating renewable diesel from forest thinnings, and Dr. Bob Freerks, whom Andrews calls “the godfather of SAF”. Dr. Freerks previously worked at Rentech, where his team pioneered converting wood chips into synthetic gas and ultimately fuel certified by ASTM for both commercial and military aircraft.

Andrews has plans for USA Bioenergy facilities across Texas, Louisiana, Arkansas, Mississippi, Tennessee, Georgia, South Carolina and Florida. In January this year, the company closed on the acquisition of more than 1,600 acres of land in East Texas for its $2.8bn biorefinery, designed to convert wood waste into net-zero sustainable aviation fuel (SAF). Carbon sequestration capabilities primarily drove his decision to prioritise their East Texas facility.

“One of the reasons why we ended up going with the site in East Texas first was the ability to sequester CO2 geologically,” Andrews notes. The East Texas location is situated just two miles from the Louisiana border in “the most densely populated county for southern yellow pine trees in East Texas,” providing abundant feedstock from a “360-degree circumference”.

USA BioEnergy is partnering with publicly traded companies to handle CO2 sequestration in Louisiana, where regulatory frameworks are more established.

Andrews already has buyers lined up for SAF. The company entered into a 20-year agreement with Southwest Airlines, giving the airline first right of refusal on fuel production from its East Texas facility and future locations.

“We did that very specifically because they are one of the only airlines that have investment grade credit in all three of the reporting agencies. Many of the airlines lost their investment grade credit worthiness during the pandemic,” Andrews explains.

Andrews emphasises his commitment to sustainability, working with certification body Weaver to ensure its feedstock sourcing meets rigorous standards. “We are a sustainability company, and we only take forest thinnings that qualify under the renewable fuel standards and are necessary for normal forest maintenance activities,” he says. Suppliers maintain sustainability plans that include immediate replanting after harvests.

To ensure bankability, Andrews has secured feedstock commitments from 20 different suppliers and is finalising arrangements with a publicly traded company to guarantee feedstock supply for the facility’s entire operational life.

“We will have the single best feedstock supply commitment that’s ever been drafted in the bioeconomy,” Andrews claims, noting that lenders prefer “one throat to choke” when it comes to feedstock responsibility.

Andrews has assembled an impressive financial team for USA BioEnergy. Citigroup is its exclusive investment banker, managing equity, while Barclays and Stiefel Nicholas serve as underwriters for municipal tax-exempt debt. The company has also been invited into the Department of Energy’s loan guarantee programme.

“There is a tsunami of capital available for projects that get to final investment decision (FID), that have been completely de-risked and the economics are easily verifiable,” Andrews says.

The company is utilising Honeywell’s technology and has structured a lump-sum, turnkey guaranteed maximum price contract with a global engineering, procurement and construction firm that has an A credit rating.

Andrews estimates approximately 18 more months of engineering activities before reaching FID, followed by 24 months of construction and 6-8 months of commissioning. Once operational, the East Texas facility will have a nameplate capacity of 65m gallons annually – 82% SAF and 18% renewable naphtha.

With its wood-to-power facility incorporating carbon capture, the company projects an impressive carbon intensity score of -335, compared with conventional jet fuel’s score of +89. “For every gallon of SAF we produce, we’re offsetting four gallons of hydrocarbon-based fuel’s emissions,” Andrews explains.

Despite the uncertainties surrounding the new Trump administration’s approach to renewable energy incentives, Andrews remains optimistic. “Many House Republicans have these projects in their backyard … in red states. And these projects create a lot of jobs in rural areas,” he points out.

Andrews has designed his revenue model around “credit sequencing,” ensuring that as one incentive programme ends, another begins over the 20-year agreements. Revenue streams will include the SAF itself, carbon capture and sequestration, hydrogen production and renewable naphtha, alongside various credits including RINs, Low Carbon Fuel Standard credits and Clean Fuel Production credits.

“Although these credits may come and go, there is a huge need for clean jet fuel and the supply and demand imbalance is Mount Everest in size,” Andrews explains. “One thing for sure is that there is significant value in clean air, clean water and clean fuel”.

He concludes: “We believe the global demand for SAF will explode by 2030 and will continue to grow significantly in the coming decades.”