CHS is the latest soybean processor hoping to increase its presence in the renewable diesel sector, as the company announced a $60 million expansion of its Mankato, Minn., soybean processing plant on Tuesday.
When completed, the facility will produce 35% more soybean oil annually. With production of renewable diesel expected to reach 6 billion gallons by 2030, its key ingredient, soybean oil, has also seen an increase in demand.
“Trends in global consumption of refined oils such as soy, canola, and palm remain strong, especially in the renewable diesel sector, with projected continued tightening of stocks," Tom Malecha, CHS vice president for global grain and processing operations, said in a release. "We're seeing tremendous opportunities to maximize our farmer-owners' investments in high-performing assets and infrastructure."
Other oilseed processors such as Bunge and ADM have created joint ventures with oil refiners to produce more soybean oil to be used for renewable diesel — a fuel chemically equivalent to diesel, but produced primarily with soybean oil rather than petroleum.
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In the release, CHS said it began working on strategic growth plans based around oil markets in October of 2019 when it increased soybean crush capacity by 30% at its Fairmont, Minn., plant. This project is expected to be completed late in the summer of 2023.
"We're buying and crushing more local soybeans and transporting more crude oil to the Mankato plant for refining," Malecha said. "We're looking forward to being able to process even more of farmers' soybeans into value-added products, which are in high demand by global customers in several market segments."
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