Tyson Foods, the Arkansas-based meat processor, has teamed up with energy company ConocoPhillips to produce and market renewable diesel fuel.
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The venture is aimed at supplementing the traditional petroleum-based diesel fuel supply and the companies said they plan to use beef, pork and poultry by-product fat to create a transportation fuel.
“This fuel will contribute to America’s energy security and help to address climate change concerns,” the companies said in a statement. Production is expected to begin in later this year.
Tyson is to make capital improvements this summer in order to begin pre-processing animal fat from some of its North American rendering facilities later in the year. ConocoPhillips will also begin the necessary capital investment to enable it to produce the fuel in several of its refineries. The finished product will be renewable diesel fuel mixtures that meet all federal standards for ultra-low-sulphur diesel. Production is expected to increase over time to as much as 175m gallons per year.
“We are firmly committed to leveraging our leadership position in the food industry to identify and commercialise renewable energy opportunities,” said Richard L. Bond, Tyson’s president and chief executive officer. “This strategic alliance is a big win for the entire agricultural sector because it paves the way for greater participation of fats and oils in renewable fuels.”
ConocoPhillips chairman and CEO Jim Mulva added: “ConocoPhillips believes the key to a secure energy future is the development and efficient use of diverse energy sources. This alliance will provide a new and significant contribution to our nation’s domestic renewable fuel supply.”
Tyson said that once full production is reached, it expects the fuel programme to provide between US$0.04 and $0.16 cents per share in additional annual earnings. However, the company added that these earnings would be subject to fluctuations in wholesale prices of diesel and animal fat.
