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HOUSTON -- ConocoPhillips and Tyson Foods Inc., the largest U.S. meat processor, partnered to develop a form of biodiesel from animal fat, reported Reuters.
Beef, pork and chicken fat from Tyson's rendering plants will be processed at ConocoPhillips refineries to create transportation fuel.
Tyson will begin making capital improvements to begin pre-processing animal fat this summer at some of its North American facilities. The oil refiner and marketer will also spend $100 million over a three- to five-year period to prepare refineries to handle the fuel.
The diesel will first be produced at its Borger, Texas, refinery, the report stated. The finished product will be a renewable diesel fuel blend that meets the federal standards for ultra-low-sulfur-diesel and can be transported via pipelines. Production is expected to increase to as much as 175 million gallons per year of the renewable fuel, the report stated.
"We are firmly committed to leveraging our leadership position in the food industry to identify and commercialize renewable energy opportunities," said Tyson chief executive Richard Bond in a statement.
The companies also receive a $1 per gallon tax credit that will make the fuel cost effective, they said.
"It's not profitable without the $1 per gallon tax credit," ConocoPhillips CEO James Mulva said at a news conference. "With the tax break, it's barely commercial."