Darling International (DAR) In Renewable Diesel Partnership With Valero Energy (VLO)

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09:45:51 am on September 14, 2009

Darling International just announced that it is partnering with Valero Energy to form a joint venture that will manufacture renewable diesel fuel. The plant that the two companies plan to build together, which will be located near Norco, Louisiana, will be able to produce 10,0000 barrels a day or 135 million gallons per year.

The biodiesel plant will use mainly waste grease and fats supplied by Darling as feedstock. The two companies plan to seek a loan guarantee from the DOE under the Energy Policy Act of 2005.

In a press release, Darling International Chairman and Chief Executive Officer Randall Stuewe commented on the partnership:

“We have long considered various paths that would allow Darling to participate in the country’s growing interest in using renewable fuels.  We believe that the combination of Darling’s ability to provide low-cost
carbon-friendly feedstocks and Valero’s experience as North America’s largest independent petroleum refiner and marketer has the potential to create a sustainable bio-fuel facility geared toward meeting America’s growing
renewable energy demands.  While the DOE loan application process has been initiated, we want to caution our investors that we are still in the early phases of this potential project, with much remaining to be done before we
enter into final, binding agreements.  There are no assurances that the DOE will approve the application for inclusion in the program, or, if the application is approved, that it will be approved at a sufficient funding
level for the parties to agree to proceed with the project.  Final approval of the project remains subject to the approval of both parties’ boards.”

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