A Washington, D.C.-based energy company plans to build a multibillion-dollar aviation fuel facility in western Minnesota.

On Monday, DG Fuels announced that it has chosen Moorhead for the site of its $5 billion sustainable aviation fuel (SAF) manufacturing facility. The company expects to begin producing SAF at the facility “prior to 2030,” according to a news release issued this week.

The Moorhead facility is expected to employ 650 people and produce about 193 million gallons of SAF a year – about half of all the fuel consumed at MSP Airport in a given year. SAF is considered a “low-carbon” transportation fuel, and can be produced from organic materials such as agricultural biomass and used cooking oils. DG Fuels said the Moorhead facility would produce SAF from agricultural and wood waste.

Though the facility won’t come online for several years, Monday’s announcement marks a significant development for business leaders in Minnesota aiming to position the state as a leader in the nascent market for sustainable transportation fuels. Led by local economic development group Greater MSP Partnership, they’re hoping to make Minnesota a “hub” for SAF.

In the news release, Greater MSP president and CEO Peter Frosch said that SAF “will create opportunities that stretch from the tarmac of MSP International Airport to every corner of the state.”

In a bid to lure SAF producers to the state, Minnesota legislators in 2023 authorized a tax credit of $1.50 for every gallon of the fuel that’s produced and sold in Minnesota. No state money has been committed to the Moorhead facility quite yet.

Founded in 2010, DG Fuels doesn’t yet have any SAF production facilities online, but it has announced plans to build them in Louisiana and Nebraska. The company is currently working with the U.S. Department of Energy to finance the Louisiana plant, a Greater MSP spokeswoman said in an email. DG Fuels announced plans for a similar facility in Nebraska in August.

“After the Louisiana plant is up and running, DG Fuels has a list of up to 10 areas they are considering for future plants,” the spokeswoman said. “The first step for each of these sites is selecting a specific parcel and securing initial commitments on it. In the case of the Moorhead site, this commitment is a letter of intent from the city to enter negotiations to sell the land to DG Fuels.”

To be sure, widespread adoption of SAF is many years off, but plans to build the infrastructure to produce it are coming together in Minnesota. In mid-September, members of the Minnesota SAF Hub met at MSP Airport to announce plans for a new SAF blending facility in Rosemount. Later that same month, the airport took delivery of its first shipment of SAF.