Harvestone Low Carbon Partners and Bank of America close US$205 million CCS tax equity financing

Blue Flint is only the third biorefinery in the US to capture its CO₂ emissions and it is the first carbon capture and storage (CCS) entity to commence carbon capture operations following the August 2022 passage of the Inflation Reduction Act. Operations commenced in October 2023 and more than 125 000 t of CO₂ have already been captured and sequestered. Going forward, the facility is expected to capture over 200 000 tpy of CO₂.

As the owner of the entire value chain, HLCP had a unique opportunity to structure a tax equity financing that enabled Bank of America to participate in the 45Q federal tax credits and, when available, to purchase 45Z clean fuel tax credits generated by the biorefinery facility. All tax credits generated by the Blue Flint assets are generated in connection with CCS infrastructure which captures the biogenic CO₂ emissions released during the production process. Upon capturing the CO₂, it is compressed to a liquid and safely and permanently injected into a deep underground geologic formation via a Class VI injection well.

"Blue Flint’s carbon capture and sequestration project has helped the facility dramatically reduce emissions, produce ethanol with a significantly lower carbon intensity score, and strengthen the ethanol and agricultural markets for North Dakota,” said HLCP CEO, Jeff Zueger.

“We want to thank our new partners at Bank of America for joining us to help lower CO₂ emissions at our North Dakota facility and, through its recent and ongoing investment in these assets, supporting the development of one of the first biorefinery carbon capture projects in the US,” added HLCP CFO, Marc Stratton.

“We have built a strong track record of innovative financing transactions for decarbonisation technologies including carbon capture and sequestration. We are engaging with all of our clients including partners like Harvestone and providing them with a full suite of financial solutions tailored to meet their needs as they take steps to transition to a more sustainable future,” said Karen Fang, Global Head of Sustainable Finance at Bank of America.

CRC-IB served as financial advisor to HLCP advising on structuring and commercial matters related to this first-of-its-kind tax equity financing. Latham & Watkins served as HLCP’s legal advisor and Milbank served as Bank of America’s legal advisor.

Read the article online at: https://www.hydrocarbonengineering.com/the-environment/06092024/harvestone-low-carbon-partners-and-bank-of-america-close-us205-million-ccs-tax-equity-financing/