Bunge, Chevron Commit C-1 Funding to CoverCress, Form Farm-to-Fuel Supply Chain
By Lynda Kiernan-Stone, Global AgInvesting Media
Bunge and CoverCress Inc. (CCI) announced a unique, long-term commercial partnership to bring a new renewable oilseed and animal feed crop that is ideal as a lower carbon intensity feedstock for renewable fuel production to market.
Cover crops have generally been background noise in agricultural production. However, they have gained prominence as a low-cost, key part of regenerative farming methods, and a tool for farmers to use in combating climate change.
Since the company’s founding in 2013, CoverCress Inc. has worked using sophisticated plant breeding and genome editing to develop the CoverCress crop from the native winter annual weed, pennycress.
CoverCress is planted at corn harvest in the fall, and is harvested just before soybean planting in May, enabling farmers in the southern regions of the Midwest to grow three crops every two years while also gaining the benefits of a cover crop - decreased nitrogen losses and improved overall soil health.
Aside from increasing farmers’ income through the ability to plant an extra crop without the loss of corn or soybean seasons, CoverCress has oil and protein profiles similar to those of canola – it builds soil health, and holds soil and nutrients in place over winter, while also having the unique trait of a very low carbon density. And according to the USDA, integration of the cover crop between corn and soybean rotations has the potential to yield as much as 2 billion gallons of oil per year, toward the goal of 50 billion gallons of biofuels in 25 years.
In April 2021, Bunge Ventures, the for-profit, global investment arm of Bunge, led an $8 million Series B-1 round in CoverCress. At the time, REG Ventures, a subsidiary of leading U.S. producer of biodiesel and renewable diesel Renewable Energy Group, also participated in the round.
This relationship between Bunge and CoverCress was recently strengthened, as Bunge has increased its stake in the company through an unspecified Series C-1 round.
Additionally, Chevron U.S.A. Inc., a subsidiary of Chevron Corporation, has joined the C-1 round to become a new investor in the company, and has formed a joint venture with Bunge that will produce feedstock to supply the rapidly growing renewable fuel industry.
“Bunge is pleased to expand our relationship with CCI to continue to develop next generation lower carbon feedstocks, which will also help meet the growing demand for renewable fuels,” said Greg Heckman, CEO, Bunge.
“We believe rotational cover crops will play a key role in our strategy in connection with the recently announced partnership with Chevron. Together, we share a commitment to sustainability and reducing carbon in our value chains.”
In connection with this commercial partnership between CCI and Bunge, CCI will supply CoverCress grain produced by farmers under contract to Bunge for processing. This leads to the strategic partnerships between CCI, Bunge, and Chevron creating a dedicated farm-to-fuel supply chain for the low-carbon intensity feedstock produced from CoverCress grain.
“Farmers are the key to enabling our CoverCress technology to make a difference to lowering the carbon intensity of diesel and jet fuel,” said Mike DeCamp, CEO, CCI. “That is why this agreement is so critical—it enables us and our farmer partners to earn more from the distinctive aspect of our ultra-low carbon grain than just a commodity value.”
“Chevron continues its efforts to build a leading renewable fuels business by investing in all parts of the value chain,” added Mark Nelson, executive vice president of downstream and chemicals, Chevron. “This investment in CCI advances our efforts to secure a diversified source of lower carbon intensity, reliable feedstocks for our forthcoming joint venture with Bunge.”
DeCamp concluded, “The advancements in the development and performance of our climate-smart agricultural product we have branded as CoverCress™, coupled with the expansion of our strategic partnerships with Bunge and Chevron, will accelerate the pace of our commercialization efforts with growers as well the value proposition of our company.”