Biodiesel Boosts Renderer’s Bottom Line

John Davis

darlingA Texas-based company that has made its living rendering grease and animal carcasses has seen a recent boost to its bottom line… thanks to biodiesel.

CNNMoney reports
that Darling International, a company that picks up the waste at 116,000 restaurants and slaughterhouses and is the largest independent renderer in the nation, has also turned profits of $55 million. That makes it CNNMoney’s 13th fastest growing company of 2009, in part, because of its investment in the green fuel:

Now Darling is eyeing a potentially lucrative new market: renewable fuels. The industrial giant Honeywell approached Darling 2½ years ago offering to license technology to make “green diesel” fuel using animal fats.

For 30 years biodiesel has been produced by combining vegetable oil and diesel. But as analyst Jin-Ming Liu of Ardour Capital explains, the fuel gums up engines and performs poorly in cold weather. Researchers have been studying a more efficient formula using animal fats for the 60-billion-gallon-a-year diesel market.

Since a green diesel refinery costs twice as much to build as a standard biodiesel plant, Darling sought a Big Oil partner for capital and refining know-how. It had little luck courting one…

Now things are different. As part of the latest government energy act, the U.S. Department of Energy is offering loans for up to 80% of the cost to build a renewable-fuel factory. Darling just announced that Valero Energy has agreed to be a partner in its proposed $270 million green diesel plant in Louisiana. The government’s final loan decision may come early next year.

Analysts say while animal fats and greases equal just 5 percent of the diesel the country needs, it’s enough to keep this specialty company going and growing.

Biodiesel, Miscellaneous