VeraSun Energy Corporation, the nation’s second-largest ethanol producer, plans to produce biodiesel from an oil by-product of the corn ethanol production process.

The company plans to make biodiesel, normally produced from soybeans, with oil extracted from distillers grains, a co-product of the ethanol production process. VeraSun would be the first company to develop a large-scale, commercial facility for biodiesel production from a co-product of the ethanol production process, creating two biofuels from the same feedstock.

VeraSun is currently evaluating locations for a 30-million-gallon-per-year biodiesel production facility, with plans to commence construction in 2007 and begin production in 2008.

Read more here.