Valero Energy Corporation and Darling Ingredients Inc. announced today that in anticipation of growing demand for renewable diesel due to the Renewable Fuel Standard (RFS) and global low carbon markets, the companies will begin an engineering and construction cost review to analyze an additional project that would grow annual renewable diesel production capacity to 550 million gallons at the Diamond Green Diesel (DGD) facility in Norco, Louisiana.
The DGD facility is currently undergoing an expansion that will increase annual production capacity from 160 million gallons of renewable diesel to 275 million gallons. This project is targeted for completion in the second quarter of 2018.
“The new expansion project is progressing well through our development process and is on track for a final decision in 2018,” said Joe Gorder, Valero chairman, president and CEO. “By doubling Diamond Green Diesel’s existing production capacity, we have a greater opportunity to serve increased demand while also mitigating some of our biofuel blending costs.”
Valero reports that a final decision on the incremental 275 million gallons of annual production capacity is expected in 2018 and will be dependent on further engineering and cost estimates, as well as the status of government regulations.
The proposed expansion would utilize existing DGD infrastructure and be built on property owned by Valero. If a decision is made to proceed with the proposed expansion, the new capacity would be available in the first half of 2021. Current DGD operations are not expected to be impacted if the proposed expansion is built.
Renewable diesel, also known as synthetic diesel, is a clear, drop-in fuel that according to the National Renewable Energy Laboratory typically has cetane values over 70, zero aromatics and excellent stability. The California Air Resources Board reports that the life cycle analysis of renewable diesel “under the Low Carbon Fuel Standard showed reductions in GHGs of about 15 to 80 percent depending on feedstock source.” Renewable diesel is produced from a variety of animal and plant-based fats and oils.