The Port of Greater Baton Rouge's board of commissioners on Thursday approved an agreement with an Alabama firm giving the company six months to consider putting a biodiesel refinery on port property.
The $3,000 option will hold the property while Alabama Renewable Energy does its due diligence on whether to build a $30 million biodiesel refinery capable of producing 30 million gallons of fuel per year there.
Once the firm completes its evaluation, the biodiesel company plans to seek a 10-year initial lease on the property with two five-year options.
The proposed site would allow the Alabama firm to ship its fuel by truck, rail or pipeline.
Alabama Renewable Energy expects the plant will have an annual operating budget of $20 million.
The plant would employ 40 people and have an annual payroll of $3.9 million.
The port has proposed an annual lease of $21,000 per year for the 3.5-acre site and a charge of $1 per metric ton for feedstock shipments and biodiesel distribution, a memo says. That works out to a total of around $221,000.
The property was once used for a specialty chemical plant some years ago and has attracted interest from several firms looking into biodiesel.
A federal mandate that requires 7.5 billion gallons of renewable fuel to be mixed into the nation's gasoline supply by next year is helping spark investment in biodiesel facilities in the area, including Valero in Norco and Tyson Foods and Syntroleum Corp. in Geismar.