Delta Biofuel announces $100M FID for Louisiana bagasse-to-energy project

In Louisiana, Delta Biofuel has announced a $100 million final investment decision for the construction and start up of a full-scale renewable fuel production facility in Iberia Parish that will convert sugarcane waste into feedstock for low-emissions energy generation.

The company is expected to create 126 new direct jobs with an average salary of $62,500. Louisiana Economic Development estimates the project will result in an additional 149 indirect jobs, for a total 275 new jobs in the Acadiana region.

The facility will be the first of its kind in North America for its use of bagasse, a byproduct of sugarcane production, to manufacture biomass fuel pellets on a commercial scale that offer a lower-cost and stronger greenhouse gas reduction profile versus other biomass fuels, such as wood pellets, used in power generation.

The total capital expenditure is 43% higher than the $70 million investment that was anticipated when the project was first proposed in 2021. The higher level of capital expenditure is reflective of increased labor and equipment cost, as well as Delta’s decision to increase the facility’s production capacity. 

Delta Biofuel expects to break ground in late June. When complete, the facility will have the ability to produce 340,000 metric tons of biomass fuel pellets annually.

Delta Biofuel has secured exclusive long-term agreements to acquire supplies of feedstock bagasse from five sugar mills in surrounding parishes. The company has long-term contracts primarily with power utility companies across Europe for the sale of more than 1.8 million tons of pellets over the next several years.

To secure the project, the state of Louisiana offered Delta Biofuel a competitive incentive package that includes the comprehensive workforce development solutions of LED FastStart and a $1 million performance-based grant for infrastructure improvements. The company has been approved for the state’s Industrial Tax Exemption program and has applied for the Quality Jobs program.