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Renewable Energy Group to expand renewable diesel plant capacity in Louisiana

Energia | Petróleo

Platts Global Alert - Oil

Renewable Energy Group to expand renewable diesel plant capacity in Louisiana

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Geismar, Louisiana, renewable diesel plant to triple capacity by 2023

US renewable diesel output expected to reach 589 mil gallons in 2020

Houston — Renewable Energy Group plans to expand its Geismar, Louisiana biorefinery's capacity by 250 million gallons, bringing its total capacity to 340 million gallons per year, the company said Oct. 6.

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This expansion is expected to require a minimum of $825 million in capital investments by Renewable Energy Group, or REG, while retaining 66 existing jobs and providing 60 additional jobs, according to the state's Louisiana Economic Development agency.

The project is planned to begin mid to late 2021, with the projected completion date in 2023.

Louisiana Governor John Bel Edwards encouraged the project by providing an incentive package, which included a $5 million performance-based grant to be paid over the course of five years and a tax exemption program.

"Attracting investments like REG's low-carbon project shows Louisiana can be both an energy leader and a climate leader," Edwards said.

The refinery was the first renewable diesel plant to be built within the US and was acquired by REG in 2014. The company has once before expanded capacity from 75 million gallons to 90 million and will now triple its renewable fuel capacity when the project is completed.

"REG Geismar has proven to be a tremendous asset for our company and is a natural site for increasing production of our lower carbon renewable diesel," REG President and CEO Cynthia Warner said.

Bio refineries use animal fats, recycled cooking oils, canola oil, and other non-fossil fuels, which brings greenhouse gas emissions 50%-80% lower than transportation fuel made from crude oil.

Biodiesel, which is used for blending, can make up 20% of the concentrate without engine modification, while renewable diesel is considered a drop-in fuel alternative to diesel and can take up 100% of the concentrate, making it a more sustainable option.

Renewable fuel demand has been on the rise as the world progresses toward more sustainable solutions and has thus been gaining more attention from producers and consumers.

Many oil refineries have also looked toward renewable fuel which has seen increased demand, after being weighed down by the coronavirus pandemic shutdowns, bringing refinery run rates to 77.8% of national capacity for Q3 2020, just above its lowest rate of 71.5% in Q2, according to the US Energy Information Administration.

CVR and Phillips 66 both have plans to either convert or to create renewable fuel facilities seeing the demand for renewables moving up. S&P Global Platts Analytics forecast renewable diesel production in the US for 2020 and 2021 at 589 million gallons and 732 million gallons, respectively.

As the world continues to progress toward cleaner alternatives, REG plans to remain a leading producer of renewable diesel with its expansion project.