In December 2021, LPO announced a conditional commitment for a loan guarantee to Monolith™ Inc. (formerly Monolith Nebraska, LLC) through LPO’s Title XVII Innovative Energy Loan Guarantee program. Monolith uses renewable energy to separate natural gas into its elemental components, hydrogen and carbon, for use in difficult-to-decarbonize industrial processes. The hydrogen can be burned as-is for fuel or converted to ammonia for fertilizer, and the carbon is used in clean carbon black for tires and other products. Monolith’s existing turquoise hydrogen production already displaces carbon emissions, and the planned facility expansion, for which LPO has conditionally offered the loan guarantee, will allow the company to produce clean hydrogen at an even larger scale.

The 2021 offer to Monolith marked LPO’s second-ever conditional commitment to fund an advanced fossil project. A year later, LPO continues to work with the borrower to satisfy the conditions necessary to advance the financing.

Moreover, LPO works with applicants and borrowers from initial project development through all steps of the formal application and loan transaction process, all the way to loan maturity. After loan closing, LPO continues its long-term partnership to make innovative and challenging projects a success. LPO's portfolio managers and technical experts can be a valuable resource, particularly during construction and early operations of projects using innovative technology.

With 2023 upon us, there are several other advanced fossil projects in the pipeline, and LPO welcomes more applications from applicants whose innovative advanced fossil projects will reduce greenhouse gas emissions. Potential applicants are encouraged to contact LPO for no-fee, no-commitment, pre-application consultations prior to submitting a formal application.

Pre-application consultations allow potential applicants to begin a dialogue directly with LPO staff to help LPO learn more about the project and to help ensure that applicants fully understand DOE's requirements and processes. Request a pre-application consultation by emailing lpo@hq.doe.gov.

The following details were originally published in LPO’s 2021 blog: “Open For Business: LPO Issues New Conditional Commitment for Loan Guarantee.”

LPO has offered a conditional commitment to guarantee a loan of up to $1.04 billion to Monolith Nebraska, LLC to expand its Olive Creek facility in Hallam, Nebraska. The Monolith Olive Creek expansion will support Nebraska’s economy by creating approximately 1,000 jobs during construction and 75 high-paying, highly skilled, clean energy jobs to support facility operations.

While this conditional commitment demonstrates DOE’s intent to finance the project, several steps remain, and certain conditions must be satisfied before a final loan is issued. While LPO’s rigorous due diligence has resulted in a portfolio loss ratio of just 3.3% to date, to accelerate the advancement of American innovation, a mixture of successful projects and losses is expected. This is LPO’s first conditional commitment to be offered to a non-nuclear project since 2016.

The project is the first-ever commercial-scale project to deploy methane pyrolysis technology, which converts natural gas into carbon black and hydrogen — two products that are frequently used in difficult to decarbonize industrial sectors like tire and ammonia fertilizer production. Carbon black is a material that reinforces and improves the performance of tires and other rubber products, and use in the production of plastics, dyes, and inks. Currently, the conventional use of fuel oil for making carbon black emits large volumes of carbon dioxide and local air emissions.

Hydrogen produced by the Olive Creek expansion will be used for cleanly made ammonia fertilizer that can be used by the agriculture sector. Monolith’s novel technologies aim to significantly reduce the amount of greenhouse gases that are traditionally emitted during carbon black and hydrogen production by up to 80 percent compared to traditional production.

This conditional commitment signals the reemergence of LPO as DOE’s lending authority that can accelerate the development and deployment of clean energy technologies. The Monolith project can potentially catalyze a new and cleaner way of producing materials that go into a lot of our everyday products.

The Monolith project is seeking funding through LPO’s Title XVII Innovative Energy Loan Guarantee program, which was established to fill a critical role in the marketplace by financing the innovative first-of-a-kind deployments of new decarbonization technologies and bridging the gap for commercial lenders. As with all Title XVII projects, the Monolith project will also be funded by significant equity from private sources of capital.

“Promoting the mobility of people and goods while protecting our planet requires investments in innovative and sustainable solutions. Partnering with organizations like Monolith, with the support of the Department of Energy, is the latest example of how we intend to further accelerate toward our goal of a 100% sustainable tire by 2050 for a better life in motion,” said Alexis Garcin, chairman and president of Michelin North America, Inc.

“As the only U.S.-headquartered tire manufacturer, it’s especially rewarding to be at the connection point of significant U.S. innovation with Monolith and the commitment of the Department of Energy to sustainable outcomes,” said Richard J. Kramer, chairman, chief executive officer and president, The Goodyear Tire & Rubber Company. “We are excited to work with Monolith to reduce our carbon footprint and further our use of alternative materials as we continue to deliver industry-leading products.”