Chicken Fat Biodiesel Plant in Danger of Closing

John Davis

A new Louisiana refinery that turns chicken fat and other greases into biodiesel is in danger of closing if Congress doesn’t hurry up and renew the $1-a-gallon federal biodiesel tax incentive.

This article from the Wall Street Journal says the Tyson Foods Inc. and Syntroleum Corp. venture is just getting ready to announce the successful opening of the Geismar, La. plant … but could soon be derailed without the tax break:

Tyson and Syntroleum say they’ve begun in recent weeks to make diesel and jet fuel from chicken fat, beef tallow and a range of greases and oils at a plant they’ve built in Geismar, La., south of Baton Rouge. The raw materials are leftovers from Tyson’s meat-processing plants and other food-processing factories and restaurants.

The Louisiana refinery has the capacity to produce 75 million gallons of fat-based fuel annually—making it tiny by oil-industry standards but among the bigger alternative-fuel plants in the U.S…

The companies contend that the fuel won’t be economically viable unless Congress restores a $1-a-gallon federal tax credit that used to go to companies that mixed alternative fuels into petroleum-based diesel. That break expired at the end of last year, when the $170 million Louisiana plant was under construction.

Had Syntroleum known Congress would let the break lapse, the company probably wouldn’t have built the plant, said Jeff Bigger, a company senior vice president.

The biodiesel tax incentive is one of several tax breaks many people are hoping will be renewed either during the lame duck Congressional session or when Congress reconvenes after the first of the year.