Origin Materials Inc. is scaling onwards and upwards in a big way.
The carbon-negative materials company with the mission to enable the world’s transition to sustainable materials secured funding to build a new factory in Louisiana.
The company announced that the Louisiana State Bond Commission plans to give its final approval of up to $1.5 billion of tax-exempt bondstofinance the construction of Origin 2, its first world-scale manufacturing facility to be located in Geismar, La.
In February, the pending state and local incentives were estimated to be worth more than $100 million. In addition, a private activity bond (PAB) volume cap allocation from the state of Louisiana, pending finalization, was expected to be $400 million.
“We are grateful to the State of Louisiana, the Bond Commission, and the [Louisiana Public Finance Authority] for their continued support of the development of Origin 2, our first world-scale manufacturing facility,” said John Bissell, co-founder and co-chief executive officer of Origin. “The availability of this funding to support the build-out of the plant will strengthen our ability to create local jobs, and to meet growing demand for our products in the United States and internationally. The Bond Commission’s and LPFA’s approvals are important milestones as we continue to drive towards financing Origin 2.”
Building on the foundation of the previously announced expected $400 million in PAB volume cap allocation, the Bond Commission has authorized issuing bonds of up to $1.5 billion, including the PAB cap, to support the construction and commissioning of Origin 2. This could enable the debt financing of Origin 2 using entirely tax-exempt bonds. Origin also continues to work with financial institutions on other forms of traditional private financing and federal loan programs, including through the United States Department of Agriculture and Department of Energy, and to pursue other local, state and federal incentives programs to optimize the financing of Origin 2, including certain 2021 Infrastructure Investment and Jobs Act and 2022 Inflation Reduction Act provisions.
“Origin is a perfect example of industry poised to help lead the transformation toward environmentally smart manufacturing. The decision to locate in Louisiana is testament to the talented men and women who make up our state’s workforce,” said Louisiana State Treasurer John M. Schroder, who chairs the State Bond Commission. “On behalf of the State Bond Commission, ‘Welcome to Louisiana, Origin.’”
The Bond Commission approval follows the preliminary approval by unanimous resolution of the LPFA board of trustees at its Sept. 6, 2022, meeting of the up to $1.5 billion bond issuance. The LPFA is a statewide conduit issuer of revenue bonds. It is authorized to issue bonds to finance economic development, industrial and manufacturing facilities, and various projects on behalf of local government entities throughout the state of Louisiana. Although the Bond Commission authorizes the issuance of the bonds, they aren’t guaranteed by the state of Louisiana, the LPFA, or taxpayer dollars involved.
“We are very pleased this financing is continuing to move forward, since the LPFA initially granted Origin preliminary approval in September to issue bonds to fund this innovative, carbon negative development,” LPFA vice president Tricia A. Dubroc said. “This project perfectly aligns within the scope of our mission to provide financing which furthers economic development and job creation in order make Louisiana a better place to work, live and raise our families.”
Origin 2 would produce sustainable, carbon-negative materials used to make products such as polyethylene (PET) plastic, which is used in packaging, textiles, apparel and other applications, as well as hydrothermal carbon, which can be used in fuel pellets as activated carbon and as a replacement for carbon block. Origin’s patented technology platform turns the carbon found in sustainable wood residues into useful materials while capturing carbon in the process.
The 150-acre facility would create an estimated 500 construction jobs, 200 local full-time positions and between 500 and 1,000 indirect local jobs. The plant would convert an estimated 1 million dry metric tons of wood residues each year into products for a wide range of end markets. The front-end design of Origin 2 is underway, with detailed engineering set to begin this year. The company previously disclosed that its Geismar plant is expected to cost approximately $1.1 billion and that the plant should be operational by mid-2025.
In June 2021, Origin went public in a special purpose acquisition company (SPAC) business combination with Artius Acquisition, Inc. Since announcing the business combination , Origin increased its customer demand from signed offtake agreements and capacity reservations by 90 percent to $1.9 billion from the previously disclosed $1 billion.
Also in 2021, the carbon-negative materials company announced a strategic alliance with PrimaLoft, a developer of high-performance insulations and fabrics, to create carbon-negative, insulating high-performance fibers. The fibers target a diverse array of end products, including outdoor, fashion and lifestyle brands, as well as home goods applications such as hypoallergenic insulated bedding.
PrimaLoft signed a capacity reservation agreement with Origin Materials to develop and commercialize new products derived from Origin’s platform. The collaboration leveraged the leadership position of PrimaLoft as a specialty producer of insulating fibers and filaments with more than 90 global partners, including Patagonia, Lululemon, Adidas and Nike, as well as a large international network of manufacturers that employ a range of textile processes to make its products.
The collaboration focused on developing fibers from carbon-negative PET and next-generation polymers produced with Origin’s patented technology platform, building on PrimaLoft’s “Relentlessly Possible” mission to elevate performance and sustainability through innovation.
Two months after this partnership, Origin formed another strategic alliance, this time with Palantir Technologies, a software company with platforms that enable organizations to optimize complex and sensitive data environments, to accelerate the world’s transition to net zero carbon. This alliance focused on decarbonizing the global materials supply chain; Origin deployed Palantir’s Foundry technology to support the acceleration of its internal operations and help companies decarbonize their supply chains on their journey to net zero.