• Ron Kotrba

Shell clears tax-relief hurdle for Louisiana renewable diesel, SAF project


Shell's Convent refinery (Photo: Shell Oil Products US)

The Louisiana Board of Commerce and Industry approved applications Aug. 24 submitted by Equilon Enterprises doing business as Shell Oil Products US for significant tax relief on a $1.5 billion project to construct a new renewable diesel and sustainable aviation fuel (SAF) plant within Shell’s shuttered Convent, Louisiana, refinery, according to documents obtained by Biobased Diesel Daily and communications with Louisiana Economic Development staff.


The project will utilize Shell’s proprietary process technology and include a new feedstock-pretreatment unit.


The project site straddles the boundary of St. James and Ascension parishes, so a separate application was required for each local jurisdiction.


The major processing units of the project will be constructed in St. James Parish, according to the documents, and the equipment needed includes piping, instrumentation, tanks, pumps, reactors, furnaces, exchangers and towers.


Rail logistics for feedstock unloading will be added in Ascension Parish, according to the documents. These items include rail spurs, unloading arms, meters, pumps and instrumentation.


“Integrating other processes into the HEFA (hydroprocessed esters and fatty acids) production process can reduce the amount of carbon in the final fuel even further,” Shell wrote in its application.


The project start and end dates are listed as October 2024 and April 2027, respectively.


Tax relief would amount to $19 million in the first year alone.


“Those estimates are based on the total investment amounts provided by the company along with the assessment percentage and millage rate (provided/confirmed by the parish tax assessors) at the time of application,” an LED staff member explained to Biobased Diesel Daily in an email. “Those first-year exemption numbers would not account for any depreciation over the remaining years, and the figures assume all local entities will approve their respective portion of the tax abatements.”


Although the state commerce and industry board has approved the tax-abatement applications, they next require approval of local taxing authorities—St. James and Ascension parishes—before LED will issue contracts.


The effective date of the pending tax-abatement contract is Dec. 31, 2027, through Dec. 31, 2032.


Shell closed the Convent refinery in November 2020. “The decision [to shut the plant down] is part of the company’s global strategy to invest in a core set of uniquely integrated manufacturing sites that are also strategically positioned for the transition to a low-carbon future,” Shell states on its website.

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