Updated Jan. 14 with additional information from the Montana Tax Appeal Board

Calumet announced on Jan. 10 that it had closed on its $1.44 billion guaranteed loan with the U.S. Department of Energy.

The loan will fund the construction and expansion of the renewable fuels facility owned by Montana Renewables, an unrestricted subsidiary of Calumet.

Initial loan proceeds of $782 million are expected to be funded this month to fund eligible expenses previously incurred by Montana Renewables.

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Calumet is planning to make another $150 million equity investment with funds it currently holds and the balance of the guaranteed loan proceeds is held in a delayed draw for construction.

Montana Renewables expects the next batch of loan funds to be disbursed during construction beginning in 2025 through the planned completion of the sustainable aviation fuel facility in 2028, according to Calumet.

The DOE loan guarantee will allow the company to expand it’s sustainable aviation fuel capacity to 300 million gallons per year and 330 million gallons of combines SAF and renewable diesel, according to Calumet.

The planned expansion includes a second renewable fuels reactor, which will allow about half of the 300-million-gallon SAF capability to be online by 2026, according to Calumet; debottlenecking of existing units, installation of SAF blending and logistics assets, increased renewable hydrogen production, cogeneration for renewable electricity and steam, and on-site water treatment and recycling capabilities.

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“This is essentially the largest agricultural investment in Montana history and will double our purchases of seed oils and tallow from approximately 1.5 billion pounds per year today to 3 billion pounds per year post expansion. This is possible through the strong support and partnership of DOE and follows over two years of detailed due diligence,” Bruce Fleming, CEO of Montana Renewables, said in a release. “Our MaxSAF expansion drives regional economic development by creating jobs, supporting the broader agricultural industry, and positioning the State of Montana as a global leader in renewable fuels in a practical and highly economic way with technology that we have developed and derisked here in the United States.”

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“This investment is a pivotal catalyst for Calumet,” said Todd Borgmann, CEO of Calumet. “Following our conversion to a C-Corporation, we emphasized the importance of the DOE loan as the next major step in Calumet’s vision, and achieving that milestone is a tremendous accomplishment. As Montana Renewables grows from a first mover and innovator in SAF to become one of the largest independent producers in the world, this business continues to competitively position itself for success, which is a critical piece of Calumet’s strategy to deliver ongoing shareholder value.”

The Montana Renewables expansion is expected to create 450 construction jobs and up to 40 operations jobs, according to Calumet.

Last fall, county property tax bills were delayed due to changes in Calumet’s tax valuation for 2024 that lowered the taxable values of the city, county and school district jurisdictions by about $4 million.

Calumet has two pending appeals before the Montana Tax Appeal Board for 2022 and 2023 taxes and said in Oct. 18 filings that it is still considering whether to protest its 2024 taxes.

Rina Sanderson, administration/legal assistant for the board, told The Electric on Jan. 14 that the board hasn’t yet scheduled a hearing as Calumet and the Montana Department of Revenue are in discussion on the cases, but expects an update by the end of January.

Montana Renewables, Calumet’s subsidiary, has a pending appeal before the board of a Montana Department of Environmental Quality in which it refutes DEQ’s decision to certify eight percent of the facility as pollution control equipment, and thereby tax exempt under state law, as opposed to its request to have the entire facility certified as tax exempt.

Montana Renewables, Calumet have pending tax appeals before state board

Under state law, air and water pollution and carbon capture equipment certified as such by DEQ is tax exempt.

A hearing in that case is currently set for May 2025.

Brian Patrick of Great Falls Public Schools and Commissioner Joe Briggs of the Cascade County Commission had not heard any updates on those appeals as of Jan. 10. City staff did not respond to The Electric as to whether they’d received any updates.

The Electric asked Calumet’s spokeswoman if the company intended to pursue the tax exemption for the facility expansion funded by the DOE loan. She said in a response that under DOE instructions, they had to wait to release further information.

The Jan. 10 release regarding the DOE loan closing, the company did not say whether it would pursue tax exemption for the expanded facility.

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The Pondera County Commission said in October that it welcomed the federal loan as it included funding for the construction of a contaminated water treatment facility at the refinery.

“It is imperative that Montana Renewables invest in the infrastructure necessary to treat or recycle the tens of millions of gallons of industrial wastewater it already produces annually as well as every drop of contaminated wastewater it will produce as production increases,” Pondera commissioners said in their October statement.

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Montana Renewables is also seeking U.S. Environmental Protection Agency approval to inject their wastewater underground into the Madison Aquifer in Pondera County, which the Pondera commissioners “absolutely oppose this proposed dumping scheme as it could create completely unacceptable risks to drinking and irrigation water, wildlife, public safety, and rural livelihoods in Pondera County. Pondera County is not going to be the dumpsite for Calumet/Montana Renewables waste. With the federal loan commitment in hand, Montana Renewables should abandon their irresponsible wastewater injection proposal, withdraw their permit application, and focus their energy on building the facilities necessary to treat or recycle all their wastewater on site. This would fulfill the promises made in their loan application, as well as their publicly stated commitments to sustainability and corporate responsibility.”

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Lanni Klasner, spokeswoman for Montana Renewables and Calumet, said last fall that Montana Renewables had conducted two treatability studies on the PTU wash water with Ramboll, an engineering firm with expertise in designing industrial and municipal wastewater treatment plants.

From the study in 2021, Ramboll developed an engineering design for a new water treatment plant for the PTU wash water, which was provided to the City of Great Falls, Klanser said.

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Montana Renewables was reviewing the most recent study in the fall and Klasner said that after their internal review was complete, they’d continue discussion with the city.

Klasner said that Montana Renewables and Ramboll anticipated substantial joint planning and coordinating with the city before submitting their permit applications.

Klasner said Montana Renewables had allocated more than $300,000 to conduct treatability and engineering studies to ensure the water doesn’t impact water quality, operational complexity or operating costs.