State biodiesel plant will be world's largest

WASHINGTON -- A French company is about to begin building the world's largest biodiesel plant in Indiana, doubling the nation's capacity to make the alternative fuel.

Gov. Mitch Daniels on Wednesday announced the state would provide $6 million to $7 million in tax credits and other incentives to agribusiness giant Louis Dreyfus Corp. to build the plant near Claypool.
The project, which was announced last year, combines a soybean processing plant with a biodiesel production plant. The facility will crush nearly 50 million bushels of soybeans a year, producing more than 1 million tons of soybean meal for animal feed and 80 million gallons of biodiesel.
Biodiesel can be made from vegetable oil, recycled grease and slaughterhouse waste. It typically is mixed with conventional diesel, and it requires few or no alterations for use in vehicles with diesel engines.
More than 35 biodiesel plants operate in the United States. Many more are planned or under construction, including others in Indiana, according to the National Biodiesel Board. The concern is that supply is expanding faster than demand.
But Erik Anderson, chief executive officer of Louis Dreyfus Commodities North America, is not concerned.
"There's going to be a lot coming on, but we believe the demand will be there for it," Anderson said. "That's why we want to be investing and investing large, early."
Daniels, who made the announcement while attending a renewable energy summit, said the plant marks the biggest step forward for the state in a year in which Indiana has gone from "almost nowhere" to being a leader in renewable fuels.
Anderson said the company looked for a long time and picked Indiana for several reasons, including the abundance of soybeans, competitive truck and rail access to feed markets, and support from state officials.
The incentives include up to $95,000 in training grants, $137,500 in infrastructure assistance to the local community, and up to $5.295 million in tax credits. That's in addition to local incentives the company is receiving, as well as a federal biodiesel tax credit.
The federal government has been increasing its support for alternative fuels to try to reduce the nation's dependence on foreign oil.
Construction is expected to begin within weeks and be completed within 18 months.
The plant is expected to employ about 85 people, but the larger economic impact will be to the state's agricultural economy.
Although Indiana is the fourth-largest soybean-producing state and the fifth-largest corn-producing state, it has lagged behind other states in biofuels.
At the beginning of last year, Indiana had only one ethanol plant. Today, six ethanol plants and two other biodiesel plants are under construction, with more on the way.
Daniels' administration has targeted agriculture and biofuels to try to improve the economy and increase jobs. To continue the growth, Daniels said he plans to ask state lawmakers to expand the tax credit it approved last year for the industry. He didn't rule out additional incentives, as well as possible usage mandates.
"We're deadly serious about this objective and thrilled about our progress," Daniels said. [Source]