Last Updated on February 13th, 2018
February 13th, 2018
Written by Chuck Samples
It has been 10 years since Renewable Energy Group halted production on a biodiesel plant in far southeast Emporia, and talks will likely resume later this year on possibly extending the current incentive compliance agreement for the project.
Scott Hedderich, Renewable Energy Group's executive director for corporate affairs, tells KVOE News the company believes Emporia is a good location overall, and the plant site near South Avenue and Road M-5 has been well-maintained so there will be minimal need to refurbish the existing structure if construction can resume. However, Hedderich also says a decade's worth of financial uncertainty has made it almost impossible for the project to move forward since the Great Recession. Part of that has been an on-again, off-again tax credit that helps renewable fuel companies with infrastructure and transportation.
Hedderich also faulted the Renewable Fuel Standard, which he says tried to establish a level playing field for renewable energy entering the marketplace. He says those floors for biomass-based energy -- like what REG wants to produce locally -- have either been scaled back or held steady in most cases under both the Obama and Trump administrations.
The current agreement for the plant and the property comes to an end New Year's Eve. Regional Development Association President Kent Heermann says REG has adhered to other aspects of the incentive compliance agreement, going "above and beyond" in the process.
Heermann also says the plant would add another level to Emproia's recent tradition of growth in the value-added agriculture production business sector.
The company has announced plans to make biodiesel from several different sources as well as plans to employ around 40 people once the facility is built. Hedderich says the market is becoming favorable to REG, even if the economics are still unstable.
If there is no significant progress by the end of the year, the city will then send formal notice to REG that it's in default. The company has 90 days to acknowledge the letter and another 270 days to take action. However, Hedderich commended city leaders for working with REG through the economic difficulties and recent changes in company leadership. REG is looking at a three- to five-year extension with an eye towards a longer time period because, Hedderich says, that would allow more time for both the economics to stabilize and the plant to be built out.