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Sustainable aviation fuel startup Twelve has closed two loans worth $45 million in part to help build out its first fuels plant in Moses Lake, Washington, the company tells Axios. 

Why it matters: In a chilly funding environment, the debt capital is added momentum for the particularly challenging process of building a first-of-a-kind plant. 

Zoom out: The aviation sector is being pushed by regulation and sustainability commitments to cut carbon emissions, and SAF is their great hope.

But there's just not enough SAF being created right now to meet airlines' demands.

Using CO2 to make SAF is a promising tech, and a group of startups is moving swiftly to try to scale projects, sign airline deals and raise financing.

Zoom in: Twelve's CEO and co-founder Nicholas Flanders said clean energy investment firm Fundamental Renewables will provide a $25 million construction loan. 

Fundamental commonly provides debt for mature technologies like solar and battery projects, but this is rare debt for a first-of-a-kind aviation fuels plant. 

Twelve also closed a $20 million green loan from Japanese bank Sumitomo Mitsui Banking Corp.

Flanders told Axios that the loans represent a next phase in Twelve's journey for its capital stack over time.

Catch up quick: Twelve, which has headquarters in Berkeley, Calif., uses electrolyzer tech to convert captured carbon dioxide into syngas, which it then converts into fuels, as well as materials for other products.

The company, founded in 2015, closed a $130 million Series B round in 2022 led by DCVC and including Capricorn Technology Impact Fund, Carbon Direct Capital Management, Munich Re Ventures, Microsoft Climate Innovation Fund, and others. 

Axios reported in June that the company was in the process of raising a Series C round larger in size than its Series B.

Twelve's customers include Alaska Airlines, Microsoft and Shopify, among others.

The big picture: Twelve's investments in the Moses Lake facility come at a time when financing is difficult across the board for clean energy firms and climate tech startups alike. 

Climate startups with high burn rates are colliding with the VC freeze, with a handful of notable companies shutting down. 

Bigger players hit by high interest rates are struggling, too, and SunPower declared bankruptcy this week. 

Financing for first-of-a-kind plants is always difficult, but especially so in today's landscape. 

What's next: Twelve had previously been aiming to get its Moses Lake plant up and running this year but now is expecting operations in 2025.

Twelve will need to execute on building the facility and beginning operations next year to meet the demands of its customers. 


Exclusive: Sustainable aviation fuel startup inks $45M debt deal for U.S. plant

The company converts CO2 into jet fuel and has deals with Microsoft and Alaska Airlines

An aerial view of a sustainable aviation fuel plant under construction by startup Twelve

An aerial view of a sustainable aviation fuel production facility under construction by Berkeley, Calif.-based Twelve. Photo: Courtesy of Twelve

Airlines

Sustainable aviation fuel startup Twelve has closed two loans worth $45 million in part to help build out its first fuels plant in Moses Lake, Washington, the company tells Axios. Why it matters: In a chilly funding environment, the debt capital is added momentum for the particularly challenging process of building a first-of-a-kind plant.

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Exclusive: Sustainable aviation fuel startup inks $45M debt deal for U.S. plant

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