Tyson Foods, Inc. and ConocoPhillips have formed a “strategic alliance” to produce and market renewable diesel fuel, according to a joint announcement today from the companies.
The renewable diesel fuel is expected to help supplement the traditional petroleum-based diesel fuel supply.
The alliance plans to use beef, pork and poultry by-product fat to create a transportation fuel. The finished product will be renewable diesel fuel mixtures that meet all federal standards for ultra-low-sulfur diesel. Production eventually should reach as much as 175 million gallons per year of renewable diesel.
“(The alliance) also offers an excellent opportunity ... to help increase the supply of renewable fuels and to reduce greenhouse gas emissions,” said Jim Mulva, chairman and chief executive officer of ConocoPhillips, in a news release this morning.
Tyson will make capital improvements this summer that will prepare some of its North American rendering operations to begin pre-processing animal fat later in the year. ConocoPhillips will make changes at some of its refineries to produce the fuel.
Production is expected to begin late this year and increase through the spring of 2009.
Investments made by both companies in the effort will “allow for the processing and handling of fat and enhance the ability of the United States to produce energy from a variety of sources, including domestically produced vegetable oils.”
The companies have been collaborating for the past year on ways to link Tyson’s knowledge of protein chemistry and production with ConocoPhillips’ processing and marketing expertise to introduce a renewable diesel to the United States.
ConocoPhillips began commercial production of renewable diesel using soybean oil in Ireland late last year. The technology was developed at ConocoPhillips and tested at the company’s Whitegate Refinery in Cork, Ireland, according to information from the company.
The Associated Press reported this morning that ConocoPhillips shares fell 27 cents to $70.27, while Tyson shares edged up a penny to $20.46.