CBRE is pleased to present a Development Project in renewable transportation fuels. These advanced renewable biodiesel fuels represent the future direction for the U.S. and the world. The federal government and an increasing number of states are mandating the use of these fuels as a blending stock or drop‐in fuel replacement with the objective of reducing carbon pollution and increasing energy independence. Government regulations support the development of this new industry segment by motivating fuel refineries, blenders and end‐users to purchase these fuels with both financial incentives and the imposition of significant penalties for non‐compliance.
Arizona Renewable Fuels, LLC: “AZRF” will be one of the first refineries in the U.S. to use the latest biomass technologies to turn natural green wood waste and wood byproducts into an advanced, renewable, second generation diesel fuel for transportation. The refining process emits near zero emissions while producing a no‐sulfur premium “ASTM D975” diesel fuel at a lower cost than the petroleum and food‐based biodiesel fuels it replaces
The Market: Transportation fuel is one of the top three energy use sectors in the United States, accounting for two‐thirds of the 9 million barrels of crude oil consumed daily. Of that, the United States imports about half from foreign sources. In California, it should be noted, the transportation sector represents roughly half of all energy consumed and is more than 90 percent dependent upon petroleum. Despite the current economic turmoil and volatile oil prices, Californians still consume more than 50 million combined gallons of gasoline and diesel each day, or 1.2 million barrels per day.
The Environment & Benefits: California has dramatically affected the direction of the nation’s transportation sector as it continues to lead with landmark legislation to decrease petroleum use 50% by 2030, and greenhouse gas emissions 30% by 2020. On August 3rd, 2015, the U.S. Government announced national plans with goals similar to those of California. The landscape of energy regulation currently approved (e.g., the Clean Power Plan) and in plans being formulated will affect everything from coal power plant decommissioning’s, to tax credits for clean solar and wind generation, to the emergence of new fuel technologies. The direct benefits of these programs are a healthier environment, a lower carbon footprint in our atmosphere, and many believe, a greater chance to “save the earth.” Other benefits include the reduction of green waste flowing into landfills, the productive and sustainable use of green waste from forest management and fire reduction programs, and a reduced dependence on foreign oil. And, the important economic benefits of job creation and new investment opportunities that come with creating a new industry segment should not be underestimated.
Arizona Renewable Fuels’ Go‐To‐Market Strategies: After spending almost six years and close to $2 million, the developers of AZRF have positioned this project to enter the market. Key factors have now come into alignment in terms of citizen priorities, government legislation, and the evolution of technology. The “window of opportunity” for this new industry segment has finally arrived. In order for CBRE Renewable Energy Group to approach the Institutional Financial firms to raise Project funding for a Project costing as much as $400 million, all the arrangements must be in‐place to insure that feedstock can be reliably sourced; that the Project can be built as engineered; that the diesel product will be refined to specifications; and that there are buyers for the renewable fuel in the marketplace. Strategies to reduce risk for the Project investors, therefore, are extremely important.
To this end, AZRF has enlisted the assistance of multiple world class strategic partners that bring proven expertise to build and operate; pursued the most effective technologies available; built in redundancy wherever possible; confirmed a customer base through negotiated off‐take agreements; and recruited the strongest operators and management talent possible.
For more information regarding this Project, please contact:
Vice President Investment Properties
Director Renewable Energy Group
Ron.Monat (at) CBRE.com