Valero Energy Corp.’s investments in renewable fuel moved forward Thursday with the completion of a plant that soon will produce renewable diesel fuel from fat.
In a venture known as Diamond Green Diesel LLC, the San Antonio refiner joined 50-50 partner Darling International Inc. of Irving to build the $413 million plant at Valero’s St. Charles refinery near New Orleans.
At full production, the plant will produce 9,300 barrels a day of renewable diesel from animal fat, cooking oil and corn oil into renewable diesel, Darling said in a statement.
The diesel will help refiners meet federal requirements that certain volumes of renewables be blended into transportation fuels.
Valero will market the diesel produced at the plant, which company spokesman Bill Day said will be “a premium product, because unlike other types of biodiesel, it is nearly identical to petroleum-based diesel and can ship by pipeline.”
About $50 million was shaved from the plant’s cost because it was built on land at Valero’s refinery and will use existing utilities and infrastructure, Day said. In addition, the site is near a rail line and docks.
Diamond Green Diesel is leasing the site from Valero. Terms of the lease were not disclosed.
In a presentation to investors, Darling said the plant will always have available feedstock. But the venture has the flexibility to purchase feedstock from other suppliers if it’s more economical.
The plant will use a three-stage process to turn fats into fuel using hydrogen and catalysts.
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In June 2011, Valero turned down a loan guarantee from the Energy Department for the Diamond Green Diesel plant and chose to finance the project internally. The federal loan program “was costly and unwieldy,” Day said.
Diamond Green Diesel is one of a number of investments Valero has made in renewable energy ventures. The company owns 10 ethanol plants in the Midwest and a 50-megawatt wind farm at its McKee refinery north of Amarillo.
Darling recycles beef, poultry and pork by-products into useable ingredients such as feed-grade fats. It also recovers and converts used cooking oil and commercial bakery waste into feed and fuel ingredients. Also, the company collects grease from restaurants.