Muni bond-funded waste-to-jet-fuel company on verge of collapse

Fulcrum BioEnergy, a clean-fuels pioneer that raised $289 million in municipal bonds it used to help finance the construction of the Nevada plant. Fulcrum then hit the brakes on plans to sell $500 million of tax-exempt bonds through the Indiana Finance Authority to build a larger trash-to-fuels facility in Gary.

The company hasn’t filed for bankruptcy as of the end of last week, and it’s unclear if there’s any remaining possibility that additional financing could be raised.

When employees were informed of the layoffs in mid-May, several said the efforts to prepare the Nevada plant for another restart were nearly complete. It’s unclear what will happen to that project, or to the company’s planned trash-to-fuels plant in the UK, dubbed NorthPoint, for which Fulcrum received a $20 million grant last year from the UK Department of Transport.

All of this spells trouble for the airline industry’s climate goals. Most carriers have vowed to use 10% sustainable aviation fuel by 2030. But these cleaner fuels are in such short supply, meeting that target would require a 122-fold increase in SAF supply in the US. Fulcrum’s Nevada plant was supposed to produce 11 million gallons of fuel per year, while its other plants were slated to be about three times larger.

When asked in an interview earlier this year about the implications of Fulcrum potentially not succeeding, Susan van Dyk, a biofuels consultant and researcher at the University of British Columbia, said that it’s particularly important for the first company in a new technology area to have at least some success.

“You want to see the first plant of its kind succeeding,” she said. “Otherwise, it makes you pessimistic about the technology developing. That would be very disappointing.”