A company that turns sugar cane waste into a green biofuel is considering building a $70 million renewable energy facility in Iberia Parish, and the state is offering tax breaks and other perks to seal the deal.
Gov. John Bel Edwards on Monday announced that his administration has reached a preliminary agreement with Delta Biofuels, offering the company a generous incentive package that includes a $1 million performance-based grant, industrial tax breaks and workforce development services through Louisiana Economic Development. In exchange Delta Biofuels would build a 16-acre facility in Jeanerette and according to the governor’s news release, create 126 new direct jobs with an average salary of $62,500. An estimated 149 indirect jobs are also projected.
The facility would convert bagasse — a pulpy fibrous material leftover from crushing sugar cane or sorghum stalks — into fuel pellets used for electricity production. In its dried form bagasse can be burned in power plants as a cleaner alternative to diesel, coal and wood fuel pellets.
More than 25 million metric tons of wood pellet biomass are used per year, largely in Europe and Asia, primarily displacing thermal coal as a feedstock. Compared with fossil fuels, the use of bagasse fuel pellets results in a reduction of greenhouse gas emissions by more than 100 percent, the news release said.
According to Delta’s plan, the facility in Jeanerette would produce up to 300,000 metric tons of bagasse fuel pellets annually by putting to use all excess bagasse from four nearby sugar mills in Iberia, St. Mary and St. Martin parishes — thereby providing an alternative use of the mills’ unneeded waste.
Most bagasse byproduct is used by the sugar cane mills directly as a green biofuel to burn in their boilers, but the rest is often collected into large piles where it decays and releases methane into the atmosphere.
“Our bagasse pellet manufacturing plant will provide a sustainable, long-term solution for the sugar mills by utilizing all excess bagasse produced each harvest,” Delta Biofuels CEO Philip Keating said in the press release. “This will not only reduce cost and liability for the mills, but will eliminate methane emissions from the discarded bagasse that you can see in huge piles around the state.”
Keating helped start Delta Biofuels in 2019 as a startup within Tasso Renewable Energy. He previously worked for American BioCarbon, which opened a bagasse biofuel facility in White Castle last year. His departure and subsequent creation of Delta Biofuels prompted his former employer to file a trade practices lawsuit against him in Louisiana’s Middle District Court, but the case was dismissed.
Groundwork for the new facility would begin September 2021 with completion expected in about a year. Hiring would begin Spring 2022. The company has engaged European and Asian energy production facilities for multi-year commitments to purchase the fuel pellets.
“Renewable energy is a key component in reaching environmental protection targets, and Louisiana looks forward to welcoming the latest renewable fuel investment, Delta Biofuel,” the governor said. “Working in tandem with our sugar mills, Delta plans to turn previously discarded waste into a source of energy. Continued growth in the renewable fuels and renewable energy sectors is prime economic development, as Delta Biofuel’s project would result in 275 new jobs in Acadiana. On behalf of the people of Louisiana, we look forward to this fantastic new project coming to our state.”
Edwards has said green energy companies could be have a promising future in Louisiana and fit with goals set by his Climate Initiatives Task Force. But at the same time, the governor has shown no signs of wanting to replace fossil fuel companies and has even welcomed industries such as Formosa Plastics, which is proposing to bring 800 tons more air pollution to Louisiana’s Cancer Alley region.