ADM announces biodiesel plants

By | November 01, 2005
Archer Daniels Midland Co. (ADM) announced its plans to build the nation's largest canola-based biodiesel plant. The 50 MMgy facility will be built near ADM's existing canola processing plant in Velva, N.D.

It's the second large-scale biodiesel plant announced for the area that will be using canola as feedstock. Earlier this year North Dakota Biodiesel Inc. announced plans to build a 32 MMgy biodiesel plant in Minot, N.D. Minot is 20 miles northwest of Velva.

The Velva facility would be ADM's first wholly owned U.S. biodiesel plant. The company is already partnering on a 30 MMgy plant near Mexico, Mo.

Groundbreaking could occur as soon as this fall, depending on final engineering and permits, according to ADM spokeswoman Karla Miller. She wouldn't disclose the name of the process technology firm for the plant.

Velva Community Development Chairman Randy Hauck said ADM's current canola facility provides 60 jobs. "Anytime you build a plant of that magnitude, it provides a boost to the economy," he added. "A lot of jobs are created by this addition."

North Dakota is the nation's leader in canola production, with more than 90 percent of the total crop. Barry Coleman, executive director for the Bismarck, N.D.-based Northern Canola Growers Association, said the state planted more than 1 million acres of canola in 2005. That figure has rebounded from the 2004 season, when acreage dropped due to poor weather. Coleman said yields for both years have been solid.

Coleman also said the state could support the demand created by both plants. He said the plants would require a combined 950,000 acres of canola. "There is no question some canola will be brought down from Canada to feed both plants," Coleman said.

The state's legislature this year passed a number of incentives aimed at attracting biodiesel facilities. They include an interest buy-down program, sales tax exemption on all new processing equipment and plant infrastructure, and an income tax credit for any fuel supplier that blends biodiesel to a ratio of 5 percent. The credit equals 5 cents per gallon of fuel blended.

"We've put strong incentives in place for renewable fuels, and we are excited to be working with ADM to develop this new biodiesel plant in North Dakota," Gov. John Hoeven said. "Investment in the plant also signals greater economic stability and growth for the region and ADM's commitment to North Dakota."

ADM also announced it plans to build a biodiesel plant in Mainz, Germany. The 275,000 metric tons per year facility will be the company's third plant in Germany. "ADM is a world leader in renewable fuels and a leader within the European biodiesel market," said Peter Reimers, ADM general manager-European Oleo Chemicals. "We are pleased to use our extensive experience producing high quality biodiesel to meet increased demand through the new facility in Mainz, Germany."

ADM is the largest biodiesel producer in Germany. The company operates plants in Hamburg and Leer. The Hamburg facility recently announced its plans to expand. Construction on the new facility is expected to take one year.

The announcement comes not long after Cargill's decision to invest in a new 200,000-metric-ton-per-year biodiesel facility in Mainz. That facility is expected to complement the company's existing oilseed crushing and refining operations in the region.
Cargill also announced plans this fall to build a 37.5 MMgy biodiesel facility near its soybean crushing facility in Iowa Falls, Iowa.
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