The Port of Greater Baton Rouge is poised to approve at a special meeting tonight an agreement that will pave the way for the development of one of the largest renewable energy facilities in the region.
The long term lease, which is expected to be approved, will enable Grön Fuels of Houston to develop on 141 acres of port property a renewable diesel facility that, in its first phase alone, will produce approximately 60,000 barrels of renewable diesel fuel per day.
The facility will cost an estimated $1.2 billion to develop over the next three years and create more than 340 jobs. Those numbers could triple by 2030 if the future phases of the project come to fruition.
Renewable diesel is a renewable fuel produced by hydrotreating resources such as soybean and Canola oils, pre-treated tallow—which is animal fat—used cooking oil and distillers corn oil.
Significantly for Louisiana, which already has a tremendous energy infrastructure in place, renewable diesel is a direct substitute for fossil-based diesel fuels because it is processed in the same manner. It, therefore, has similar chemical properties and is compatible with existing storage tanks and pipelines.
It is not the same thing as biodiesel, which has different chemical properties and, consequently, storage and compatibility issues that make it a less attractive alternative to fossil-based diesel.
Grön Fuels is a portfolio company of the Houston-based infrastructure investment firm Fidelis Infrastructure, which invests in complex greenfield projects and has deep ties to Louisiana. Fidelis Managing Partner and co-founder Dan Shapiro, who spent several years with the Shaw Group in the early 2000s before relocating to Houston to found Fidelis, says the planned site in west Baton Rouge is an ideal location for the facility for several reasons.
“What we recognized early on about the advantages and strengths of Louisiana is that it sits at the intersection of old energy and new energy,” Shapiro says. “You have a talented workforce able to deliver complex projects, the workforce to be able to operate complex downstream energy projects, and you have the Mississippi River, which enables you to access the farm, the heartland of the country, for organic feedstocks by water.”
Grön has been working with the port and Louisiana Economic Development since 2019 on the project, which will also have the capacity to produce 6,000 barrels of renewable jet fuel per day.
Though the Trump administration’s energy policy has centered on fossil fuels, a growing number of individual states in the U.S., as well as in Canada and Europe, are increasingly focused on increasing their use of renewable fuels, which Grön executives believe will help drive demand for their products.
What’s more, the plant itself will have a low-carbon footprint, which offers several advantages.
“The market will grow,” Shapiro says. “California is shifting into renewable diesel and renewable natural gas. They are moving to lower carbon transportation fuels. Oregon, Washington and some northeastern states are doing the same thing, and Canada has a nationwide low carbon fuel standard that goes into effect in 2022, so there is high demand for lower-carbon transportation fuels and right now the demand outstrips the supply.”
Grön already has offtake agreements in the works, as well as a letter of intent to work with Colonial Pipeline and Bengal Pipeline to establish new connectivity from the planned facility to the largest refined products pipeline system in the U.S.
In addition to the planned facility, Grön will develop a new office building at the site that will serve as headquarters for the company.
If the lease is approved by the port, as expected, the next step in the process will be for Grön to secure environmental permits.