The Port of Greater Baton Rouge could become the home of a $30 million biodiesel refinery capable of producing 30 million gallons of fuel per year.
Alabama Renewable Energy has asked the port for a six-month option on a vacant facility on 3.5 acres once used for a specialty chemical plant some years ago, Executive Director Jay Hardman said. Once the firm completes its due diligence, the biodiesel company plans to seek a 10-year initial lease on the property with two five-year options.
“This is a couple of engineers, very knowledgeable, well-heeled, who want this little facility that we have up in the front,” Hardman said Thursday. “It seems to have the capabilities of producing a biodiesel mix, and they’re pretty excited about it.”
The proposed site would allow the Alabama firm to ship its fuel by truck, rail or pipeline, Hardman said.
Alabama Renewable Energy expects the plant will cost $30 million to build and will have an annual operating budget of $20 million, according to a memo from port Director of business development Greg Johnson.
The plant would employ 40 people and have an annual payroll of $3.9 million.
Hardman said he does not know if Alabama Renewable has the financing in place to build the plant; that’s one of the things the company will be working on during the six-month option period.
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, the memo says. That works out to a total of around $221,000.
Hardman said the port has been approached by a couple of other firms interested in biodiesel projects but those did not come to fruition.
A federal mandate that requires 7.5 billion gallons of renewable fuel to be mixed into the nation’s gas supply by next year is helping spark investment in biodiesel facilities.
In the past few years some major biodiesel facilities have been built in Louisiana.
Valero has invested $241 million in a renewable diesel facility with an annual production capacity of 137 million gallons. The biodiesel plant, next to Valero’s existing refinery in Norco, began production in January. Tyson Foods Inc. and Syntroleum Corp. invested $126 million at their joint venture plant in Geismar.