WASHINGTON, Jan. 21 (UPI) -- The U.S. Department of Energy said it was offering a conditional loan guarantee of $241 million for a Louisiana biofuels plant.
Diamond Green Diesel – a joint venture between Valero Energy Corp. and rendering company Darling International Inc. -- would be capable of producing more than 9,300 barrels a day -- 137 million gallons a year -- of renewable diesel.
Valero Energy, the nation's largest independent oil refiner, plans to direct the design, construction and operation of the project and market all of its output, while Darling International will supply feedstock to the project.
Construction on the plant, to be built adjacent to a Valero refinery about 20 miles west of New Orleans, is to begin in September with production expected in the first quarter of 2013, Valero spokesman Bill Day told the San Antonio Express-News newspaper.
"Strong biofuels projects like Diamond Green Diesel can help to diversify our transportation fuel supply while creating jobs and strengthening our economy," U.S. Energy Secretary Steven Chu said in a statement. The announcement reflects the Obama administration's commitment to promoting the development of advanced biofuels, he said.
The Energy Department statement said the project is expected to nearly triple U.S. production of renewable diesel fuel and reduce greenhouse gases by more than 80 percent over conventional petroleum-based diesel.
The Diamond Green Diesel facility would fulfill nearly 14 percent of a national mandate to boost production for biomass-based diesel, the department said.
"Made-in-America biofuels will increase our energy security, economic security and environmental security – while creating jobs – and help build a brighter future for all Americans," said U.S. Agriculture Secretary Tom Vilsack.
In a separate announcement, Valero said last week that it would invest up to $50 million to build a commercial-scale cellulosic ethanol plant in Kinross, Mich. in a partnership with Mascoma Corp. of Lebanon, N.H.
The biorefinery – at an estimated total cost of $350 million -- is expected to have an annual production of 40 million gallons of low-carbon cellulosic ethanol produced from hardwood pulp to be covered by an off-take arrangement with Valero. The plant is supposed to be running by 2013.
Darling, which has headquarters in Irving, Texas, recycles beef, pork and poultry waste into useable ingredients.
Valero, which has its headquarters in San Antonio, has assets that include 15 petroleum refineries with a combined throughput capacity of approximately 2.8 million barrels per day and 10 ethanol plants with a combined production capacity of 1.1 billion gallons per year.