Renewable Energy Group boosts Ralston biodiesel project after securing new financing

US advanced biofuels producer Renewable Energy Group (REG) has announced that it has secured financing of up to $20 million (€18.3 million) from First Midwest Bank for the $24 million capacity-expansion project at the company’s Ralston, Iowa biodiesel refinery.

The upgrade project, announced last November, is expected to increase the annual nameplate capacity of the Ralston biorefinery from 12 million to 30 million gallons.  This would match the capacity at the company’s other Iowa biorefineries in Mason City and Newton, the biomass-based diesel producer said in a statement.

 “This investment shows our continued confidence in biodiesel for the long-term,” said Chad Stone, chief financial officer at REG. “This confidence was bolstered by Iowa lawmakers’ long-term commitment to higher biodiesel blends and we thank them for their support.”

Iowa Senate File 2309, which was signed into law last year by Governor Terry Branstad at REG’s Newton biorefinery, extends the existing 2 cents per gallon biodiesel production tax credit for seven years beginning January 1, 2018. 

In that year, the new law also adjusts the current retail incentive for fuel containing a minimum 5% biodiesel blend (B5) to 3.5 cents per gallon and creates a new 5.5 cents per gallon incentive for blends of B11 or more. 

First Midwest Bank has also been involved in financing for REG Newton.  "I am pleased First Midwest Bank has the opportunity to expand our banking relationship with an industry leader like REG,” said Drew Lawrence, senior vice president at First Midwest.  “We look forward to working on a great project that will more than double biodiesel production capacity at the Ralston facility."

REG has grown from its beginnings in Ralston 21 years ago into North America’s largest biomass-based diesel producer, according to the company. The firm now owns 14 active biorefineries in the United States and Europe with a combined annual nameplate capacity of 502 million gallons.