US biodiesel begins plant restarts after tax credit returns

01 April 2011 22:59  [Source: ICIS news]

HOUSTON (ICIS)--US biodiesel plants began restarting late in the first quarter following the return of a federal tax credit, traders said on Friday.

“It has been slow, but they are starting to put biodiesel into the market,” one trader said.

Five plants were said to have started producing between February and March, with another two in production by the end of March, according to traders selling biodiesel and co-product crude glycerine, referred to as bio-crude.

The Archer Daniels Midland (ADM) plant in Velva, North Dakota, was said to be one of the plants that started in the first quarter, with 85m gal/year (322m litres/year) production capacity.  

Cargill’s 37.5m gal/year plant in Iowa Falls, Iowa, was said to have begun production.

The 80m gal/year Louis Dreyfus facility at Claypool, Indiana, has begun producing commercial material, traders said.

Peter Cremer North America’s 60m gal/year biodiesel facility at Cincinnati, Ohio, was also said to be in production during March, sources said.

Hero BX has a plant in Erie, Pennsylvania, with 45m gal/year capacity, and it was said to be operating. This plant is a multi-feedstock unit, according to the National Biodiesel Board (NBB).

Owensboro Grain Biodiesel at Owensboro, Kentucky, with 45m gal/year production capacity for soy-based biodiesel, was said to have started production.

AgProcessing (AGP), with a 30m gal/year facility at Sergeant Bluff, Iowa, and a 28m gal/year unit at St Joseph, Missouri, was said to be operating. It was not clarified if one, or both, plants had started.

Peter Cremer North America, ADM and Louis Dreyfus have verified production. Other companies did not.

Capacity utilisation rates versus production capacity remained unclear. Traders said most of the plants continued to have start-up hiccups, making operating rates uncertain.

US biodiesel producers were able to begin re-starting operations following the December 2010 reinstatement of a key federal tax credit - after about a year without it.

Out of 176 plants originally operating in the US, most were shuttered or closed when the subsidy ended, according to the National Biodiesel Board NBB.

By: Judith Taylor
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