Valero Energy Corp. and Darling Ingredients Inc. are launching an advanced engineering and development cost review for a new plant in Port Arthur, Texas, that would produce renewable diesel and renewable naphtha, Valero reported Monday.

“We expect low-carbon fuel mandates across the globe to continue to drive demand growth for renewable fuels,” Joe Gorder, Valero’s chairman, president and CEO said in a written statement.

According to Valero, the proposed facility would be designed to produce 400 million gallons of renewable diesel and 40 million gallons of renewable naphtha per year. Diamond Green Diesel Holdings LLC (DGD), a 50/50 joint venture between Valero and Darling, would own and operate the plant, which Valero notes would be the first renewable diesel facility in Texas.

Valero stated the new plant would be located near its 395,000-barrel-per-day Port Arthur refinery and take advantage of that facility’s logistics system. The company added that DGD currently operates a renewable diesel plant adjacent to the Valero St. Charles Refinery near New Orleans. In addition, it reports that renewable diesel – made from waste products such as recycled animal fats and used cooking oil – emits 15 percent of the greenhouse gases that a mineral diesel produces.

“This project would meaningfully expand our renewable diesel segment, which continues to generate strong results, and demonstrates our commitment to environmentally responsible operations,” noted Gorder.

Valero and Darling anticipate making a final investment decision in 2021, based on further engineering, permitting and approval by both companies’ boards. If the companies decide to proceed with the Port Arthur project, they could break ground in 2021 and begin operations three years later, Valero stated. Also, Valero noted the new plant would raise DGD’s annual renewable diesel production to approximately 1.1 billion gallons and renewable naphtha output to nearly 100 million gallons.

An expansion project is underway at the Louisiana plant to increase renewable diesel and renewable naphtha production to 675 million and 60 million gallons, respectively, Valero added. The firm anticipates that project to conclude in late 2021.

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