A state board has nearly tripled the amount of equipment eligible for a tax exemption at the Montana Renewables biorefinery in Great Falls and left the door open for additional exemptions in the future.
The company, a subsidiary of Calumet, reached a settlement with the Montana Tax Appeal Board in May. Montana Renewables had appealed a prior determination by the Montana Department of Environmental Quality that $24.5 million in assets qualified for a tax exemption as “pollution control equipment.”
The terms of the settlement, released through a public information request by Montana Free Press, show that an additional $42.9 million in equipment will be eligible for the tax exemption. In total, Montana Renewables will not pay property taxes on $67.4 million worth of assets at the plant.
The exemption is retroactive to December 2022. The settlement also stipulates that the exemption applies to current assets only and that “nothing in this settlement agreement shall prevent MRL [Montana Renewables] from seeking pollution control equipment certifications for new assets” in the future.
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Although Montana Renewables touts its environmental benefits, projections from the company suggest that the biofuels plant could emit more air pollutants than the site emitted as a crude oil refinery. At the same time, the company is seeking a tax exemption aimed at pollution control equipment.
Initially, Montana Renewables attempted to qualify the entire biorefinery, valued at $562 million, as tax-exempt under the pollution control equipment benefit. The exemption is aimed at “portions” of equipment or machinery that prevent the creation of air or water pollutants, according to Montana law.
The exemption request applied to the future expansion of the biorefinery, which is estimated to be finished by late 2027.
The DEQ rejected the request for a full tax exemption and identified specific equipment that controls or reduces emissions at the plant. The agency determined that the eligible equipment amounted to $24,579,241. Montana Renewables appealed and maintained that the entire operation is “one emissions-reducing unit.” Following the settlement, Montana Renewables dropped its appeal.
Montana Renewables did not return a request for comment Thursday.
Calumet launched Montana Renewables in 2021 to operate within the footprint of the Great Falls oil refinery. The biorefinery uses agriculturally based raw materials like canola oil and soybean oil to produce sustainable aviation fuel and renewable diesel. Last year, the U.S. Department of Energy announced a $1.6 billion loan guarantee to Montana Renewables to fund an expansion that will more than double the plant’s output.
Sustainable aviation fuel produces less pollution than conventional jet fuel. However, some researchers have questioned the environmental benefits of fuels derived from agriculture, taking into account the land use and production impacts.
Projections submitted by Montana Renewables suggest that the fully expanded plant could emit more pollutants than the plant did as a dedicated crude oil refinery.
The Calumet crude oil refinery continues to operate, though it has scaled down production to make room for Montana Renewables. Total greenhouse gas emissions at the entire Great Falls site were 427,371 tons in 2023, the highest amount in EPA’s published data for the location since 2010.
It’s not yet clear exactly how much this will impact the company’s property tax liability. The Montana Department of Revenue must apply multiple tax benefits to the site. Those include a 50% tax break on a portion of the plant from the city of Great Falls and a 50% break on the entire plant from Cascade County, both of which apply to Montana Renewables. The company also applied for a 50% tax break through a state-level energy production benefit that’s still under review.
This latest settlement will be worked into those calculations. A spokesperson for the Department of Revenue didn’t return a question about how the exemption would be applied. The two companies are among the largest taxpayers in Cascade County.
Calumet, which is taxed separately for the crude oil refinery operation, is subject to an 80% tax break on $6.1 million in equipment. The company is going through its second multi-year tax protest since 2017 and has three pending cases before the Montana Tax Appeal Board. Hearings are currently scheduled for 2026.
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