Bagasse pellet plant in Louisiana to break ground in June

Louisiana Economic Development on May 24 announced Delta Biofuel is moving forward with the development of a proposed 340,000-metric-ton-per-year sugarcane bagasse-to-fuel pellet facility in Iberia Parish, Louisiana. The company plans to break ground on the project in late June.

Delta Biofuel in June 2021 first announced plans to develop the pellet plant. At that time the project was expected to cost $70 million to develop and was intended to have an annual capacity of 300,000 tons per year. The company now expects the facility to cost $100 million to develop. Delta Biofuel attributed the 43 percent increase in capital expenditures to higher labor and equipment costs as well as the company’s decision to boost production capacity to 340,000 metric tons.

Delta Biofuel said it has secured exclusive long-term agreements to acquire bagasse feedstock from five nearby sugar mills. Bagasse is a fibrous pulp byproduct of sugarcane processing. The company has also entered into long-term contracts, primarily with power utility companies in Europe, for the sale of more than 1.8 million metric tons of pellets over the next several years.

“Louisiana has emerged as a leader in renewable energy through continued investment and innovation,” said Louisiana Gov. John Bel Edwards. “As one of the nation's top producers of sugarcane, producing more than 2 million tons of raw sugar in 2022, it is only fitting that our state will lead the way in the production and export of this new renewable fuel source. Once again we see how the transition to cleaner energy creates investment, jobs and a diverse range of opportunities across multiple economic sectors and regions of our state.”

 “Delta is thrilled to reach this milestone and begin construction. We look forward to putting waste bagasse to good use, solving a serious problem for the sugar industry and reducing GHG emissions,” said Phil Keating, CEO, Delta Biofuel. “I’d like to thank Iberia Parish, One Acadiana and LED for helping us get this project off the ground. Of course, we could not have done this without the coordination and support from our sugar mill partners.”

The facility is expected to create 126 new direct lobs with an average salary of $62,500. LED estimates the project will also create 149 additional indirect jobs. To support the project, the state of Louisiana offered Delta Biofuel an 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 also been approved for the state’s Industrial Tax Exemption program and has applied for the Quality Jobs program.