DOE offers conditional US$241M loan guarantee to Diamond Green Diesel - Valero Energy and Darling International's proposed JV - to build 137-million gallon/year renewable diesel plant in Norco, Louisiana

Rachel Carter

WASHINGTON , January 20, 2011 (press release) – Project Expected to Create Over 700 Jobs and Nearly Triple Amount of Renewable Diesel Produced Domestically

U.S. Energy Secretary Steven Chu today announced the offer of a conditional commitment to Diamond Green Diesel, LLC, the proposed joint venture between Valero Energy Corporation and Darling International Inc., for a $241 million loan guarantee.  The loan guarantee will support the construction of a 137-million gallon per year renewable diesel facility in Norco, Louisiana, about 20 miles west of New Orleans.  Valero Energy Corporation plans to direct the design, construction and operation of the project and market all of its output, while Darling International Inc. will supply feedstock to the project.

"Today's announcement reflects this Administration's commitment to promoting the development of advanced biofuels," said Secretary Chu.  "Strong biofuels projects like Diamond Green Diesel can help to diversify our transportation fuel supply while creating jobs and strengthening our economy."

"This announcement by the Department of Energy demonstrates the dedication of the Obama Administration to building a robust, domestic renewable fuels industry," said Agriculture Secretary Tom Vilsack. "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."

"This announcement is a great example of something we have been saying at EPA for a very long time -- we can protect our health, preserve our environment and improve our economy at the same time," said EPA Administrator Lisa P. Jackson. "Clear environmental standards and strong government support have given these companies the certainty they need to invest in new technology and new jobs. It demonstrates the power of American innovators to create a cleaner, healthier and more prosperous future."

"Today's announcement of a $241 million loan guarantee to Diamond Green Diesel in Norco is good for Louisiana and good for our nation's future," Senator Mary Landrieu said.  "Oil has paid tremendous dividends to our country.  It helped us win World War II, it helped create an industrial revolution and it built the greatest middle class the world has ever seen.  But, as we move to new technologies beyond oil, we must embrace the transition to clean renewable energy.  Projects like Diamond Green Diesel are a step in the right direction, and I appreciate the commitment Secretary Chu and Administrator Jackson are making to this effort."

The company estimates that the project will create 700 jobs during peak construction and over 60 jobs during operation.  The project will reduce greenhouse gases by more than 80 percent over conventional petroleum-based diesel and is expected to nearly triple the amount of renewable diesel produced in the U.S.   In addition, the facility will fulfill almost 14 percent of a national mandate to boost production for biomass-based diesel.  Approximately 95 percent of the project components are expected to be produced in the United States.

The project will produce renewable diesel fuel primarily from animal fats, used cooking oil and other waste grease streams.  The project will be the first application of its kind in the U.S. to use an innovative hydrotreating/isomerization process from Universal Oil Products (UOP), known as EcofiningTM, and a pretreatment process from Desmet Ballestra Group, which converts processed feedstock into high-quality diesel.

As part of the Department of Energy's comprehensive strategy to support the production of advanced biofuels, Secretary Chu also announced the launch of a new online collaboration tool and data resource focused on bioenergy.  The "Bioenergy Knowledge Discovery Framework" allows researchers, policymakers and investors to share large data sets, as well as the latest bioenergy research.  The Framework also facilitates collaborative production, integration and analysis of information.  Registered users will be able to contribute data sets that can then be shared, expanding the body of knowledge, better informing this growing industry and eliminating "information silos."  The Framework allows simultaneous geographic mapping of complex data sets such as biomass feedstock production, fueling stations and biorefineries on a national, state, and even county-level basis - providing the bioenergy industry an analytical tool for identifying new opportunities for research, supportive policies and project investment.

Through the Loan Programs Office,  the Department of Energy has issued loan guarantees or offered conditional commitments for loan guarantees to support 18 clean energy projects totaling over $17.5 billion.  Together, these projects will produce over 37 million megawatt-hours, enough clean energy to power approximately 3.5 million homes.  Additional DOE-supported projects include two of the world's largest solar thermal projects, two geothermal projects, the world's largest wind farm and the nation's first nuclear power plant in three decades.  Visit the Loan Programs Office for more information.

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