Below Zero: The world’s largest renewable diesel project — just phase one of a 9-year journey to a massive carbon negative park at the Port of Baton Rouge

December 14, 2020 |

There’s been a lot of talk about “net zero carbon by 2050” – today’s let’s visit a vision of “below zero carbon before 2030.”

After all, it’s not every day of the week that a 900 million gallons renewable diesel project can be described as “phase one of a much bigger project”, but that’s the story with Fidelis Infrastructure and Gron Fuels’ plan to build, over nine years, a $9.2 billion dollar low carbon industrial park at the Port of Greater Baton Rouge in Louisiana.  That’s 60,000 barrels per day of renewable diesel, including a permitted jet fuel option.

The final investment decision date

A final investment decision is expected in 2021, which will determine the final cost of the project’s first phase.

The topline numbers

The first phase of construction would involve a capital investment of over USD 1.25 billion and create 340 new direct jobs by 2024. With expansions and associated projects, the complex could involve up to $9.2 billion of total investment over several phases. A final investment decision is expected in 2021, which will determine the final cost of the project’s first phase.

Through all phases and associated projects, the complex would create an estimated 1,025 new direct jobs, with an average annual salary of $98,595, plus benefits. Louisiana Economic Development estimates the project and subsequent phases would result in up to 4,560 new indirect jobs, for a total of 5,585 new jobs for the Capital Region.

The Haldor Topsoe tech at the heart of Phase 1

Grön selected Haldor Topsoe’s HydroFlex renewable fuels and H2bridge bio-hydrogen technologies with bio-carbon capture and sequestration option. Overall, the project has the means to capture some 1 million tons per year of CO2 for carbon sequestration in suitable deep saline aquifers located below the project site.

The design’s competitive edge

The integration of the fully proven H2bridge hydrogen technology with the HydroFlex technology enables Grön Fuels to produce renewable bio-hydrogen equivalent to the production of a 1,000 MW hydrolyser plant at a fraction of the cost. The design flexibility to include bio-carbon capture and sequestration (CCS) to the project is added to pursue negative carbon intensity renewable fuel production.

Bio-hydrogen not utilized for renewable diesel production will be made available by Grön Fuels for purchase by third parties for lowering the CO2 emissions of power production, industrial processes, or transportation and can be shipped by the ~600 miles / 1,000 km of hydrogen pipelines operational and located near Grön Fuels’ site.

Putting it in context

Fidelis Managing Partner Dan Shapiro put the project in context:

“As a comparison to the 350 MW Danish Hydrogen project, Grön Fuels will make as much renewable Bio-Hydrogen as a 1,000 MW hydrolyser plant would produce and doing so at a fraction of the cost. When combined with Grön’s Bio-Carbon Capture & Sequestration option, Grön expects to make Bio-Hydrogen with negative Carbon Intensity with a majority of the Renewable Bio-hydrogen being utilized to reduce the Carbon Intensity of Grön’s renewable diesel fuel. The remaining Bio-hydrogen that Grön believes will have a lower (negative) Carbon Intensity compared to Green Hydrogen and can be used to reduce the CO2e emissions of power production, industrial processes or transportation and can, for example, be shipped on the over 650 miles / 1,100 km of existing hydrogen pipelines, the most extensive hydrogen pipelines in the world, that are located near Grön’s site.

“Additional reductions of Grön’s industry-leading conversion efficiencies of the Renewable Diesel facility will be accomplished by installing the carbon capture addition to the hydrogen plant and permanently sequester Grön’s Biogenic-CO2 in the deep saline aquifers widely available in south Louisiana including below Grön’s site.”

The feedstocks

The facility will utilize soybean and canola oils, distillers corn oil, tallow, used cooking oil, and feedstocks of the future such as bio-crudes. The low-carbon fuels produced can directly substitute conventional fuels in cars, trucks and airplanes, while utilizing existing fuel storage tanks and infrastructure such as long-haul pipelines.

The project milestones

The project would be built in stages over nine years at a site leased from the port on the west bank of the Mississippi River, near Port Allen. The first phase of construction would involve a capital investment of over $1.25 billion and create 340 new direct jobs by 2024. The base project is expected to produce up to 60,000 barrels per day of low-carbon renewable diesel, with an option to produce renewable jet fuel utilizing non-fossil feedstocks, including soybean oil, corn oil and animal fats. Upon completion of all phases – potentially by 2030 – the site would be one of the largest renewable fuel complexes in the world.

The Fidelis backstory

Houston-based Fidelis Infrastructure is an asset management firm specializing in specific industry sectors, including renewable energy, low-carbon transportation fuels, sustainable and circular economy infrastructure, and digital infrastructure. The Fidelis team has been involved in complex infrastructure projects ranging from $40 million up to $2 billion, including fiber-optic networks; solar power generation; downstream petrochemical; long-haul, high-voltage electric transmission; and gas pipeline projects. Company partners Shapiro and Jarlsjo both attended Louisiana State University and previously worked for The Shaw Group in Baton Rouge.

The incentives from Louisiana Economic Development

LED began formal project discussions with Fidelis Infrastructure about Grön Fuels in March 2020. To secure the project, the State of Louisiana offered a competitive incentive package – subject to a final investment decision – that includes the comprehensive solutions of LED FastStart®, the nation’s No. 1 state workforce development program for the past 11 years. The package also includes a performance-based grant of up to $15 million, payable at up to $2.5 million per year for six years, for project development and infrastructure. The company also is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs.

Reaction from the stakeholders

“This renewable fuel production facility will help to secure Louisiana’s place as a leader in environmentally friendly energy production,” Gov. Edwards said. “Growing global demand for renewable transportation fuels creates a significant growth opportunity for our state. Once again, Louisiana’s port, rail and pipeline infrastructure and other logistical advantages are making possible an important industrial complex that will deliver many quality jobs for our skilled workforce. We look forward to the final investment decision for Grön Fuels to launch this innovative project at the Port of Greater Baton Rouge.”

“Louisiana’s core strengths in the field of building and operating plants that produce fuels and products for the world, coupled with its logistically advantaged deepwater location at the nexus of energy and agriculture, serve as the launching point for a new ‘high tech’ transition of the region into the next generation of energy,” Fidelis Managing Partner Dan Shapiro said. “I’m proud to be involved in this exciting project as we work to advance it through feasibility and its next steps.”

“The port is excited to have finalized the ground lease and assist Fidelis Infrastructure in advancing the investment in the Grön Fuels new renewable diesel project for Louisiana and the Greater Baton Rouge region,” said Executive Director Jay Hardman of the Port of Greater Baton Rouge. “The project is great for the people of Louisiana, the port and the community and economic development mission it serves, the agricultural industry, and those who benefit from the clean fuels the plant will produce.”

“This project would significantly contribute to the West Baton Rouge Parish economy, the people and businesses of our community, as well as our farmers and related industries,” West Baton Rouge Parish President Riley Berthelot Jr. said. “We look forward to working with those involved in the project to help progress it through feasibility and investment.”

“This is a transformative new company and investment for the Capital Region, and we have enjoyed working this project with company executives over the last year,” said President and CEO Adam Knapp of the Baton Rouge Area Chamber. “Fidelis brings hundreds of quality, high-paying jobs and huge capital investment during a critical time for both jobs and innovation for this sector. This is a big deal, and puts metro Baton Rouge on the map as home to the largest renewable fuel refinery in the world.”

“We are very proud to be part of this innovative project that has such great potential for the state of Louisiana and for reducing carbon emissions by leveraging Topsoe’s proven technologies into Grön Fuels’ pathway to ultra-low carbon intensity renewable fuels. Topsoe’s vision is to be recognized as the world leader in carbon emission reduction technologies by 2024, and this project is an important step on our journey as it incorporates several of our industry-leading technologies,” says Amy Hebert, Chief Commercial Officer, Haldor Topsoe.

The Bottom Line

Two factors make this especially interesting. One, the size of the renewable diesel facility. Second, the overall carbon negative model, which utilities the bioeconomy’s singular advantage over wind and solar and that is the carbon negative potential of biotechnology — able to scrub, as it were, greenhouse gas emissions from the sky.

The project is banking on the expansion of low carbon standards that reward developers for pushing down the carbon as far as possible, even into carbon-negative territory. Without those standards, there’s nothing to sell except the energy attributes and, frankly, its cheaper to produce a high-pollution fuel than a  low-pollution one. It’s really up to society to finally decide what it wants, “safe skies or cheap energy” is one way of putting it. The project is also banking on investors and lenders to see that the rewards outweigh the risks and that there will be enough demand in the marketplace to support massive projects such as these. 

Will every renewable diesel project that’s been announced be actually built? Probably not. What makes this one special, the push towards low carbon raises the potential value of the fuels, giving this project a conceptual margin edge. Take for example how this project will utilize heat off hydrotreater to make the plant more energy efficient and carbon efficient — with strategies such as using that heat to keep feedstock oils warm and liquid before the hydrotreating step so that the feedstock flow efficiently. Or, using low-carbon plant oils grown from lower-carbon varietals, or capturing CO2 from oilseed crushers.

There’s real circularity in this industrial park, which reminds us that sometimes, to move along as fast as possible towards a low-carbon future, we have to travel in circles.

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