A Louisiana parish council has approved a property tax exemption for a project that a company official said could be the saviour of independent refiner PBF Energy and its Chalmette, Louisiana refinery, reported Reuters.
The exemption, approved late on Tuesday, will save PBF $91 million over 10 years in property taxes for a new renewable diesel unit, according to documents filed by PBF with the council of St. Bernard Parish on the east side of New Orleans.
PBF wants to use the tax break to attract a partner for the conversion of an idled hydrocracker, which made diesel from gas oil, into a renewable diesel unit that will make the truck fuel from animal fats.
"We see this project here not only as the saviour of the refinery but also the saviour of the company," said Chalmette refinery manager Steven Krynski, in remarks made before the council prior to the vote.
Krynski said the company is $1.4 billion in debt from the downturn brought about by the COVID-19 pandemic in 2020, when lockdowns and work-from-home policies reduced demand for fuel.
"Very few people realise how close we came to closing down last year not only as a refinery but as a company," Krynski said.
The renewable diesel produced by the plant will offset the cost of credits refiners need to comply with U.S. biofuel laws. In June, PBF posted outstanding biofuel and emissions credit obligations for the first quarter of 2021 amounting to $848.3 million, up from $118.4 million for the same quarter a year ago.
The renewable diesel unit is to be built between Oct. 1, 2021 and the end of 2023, according to the documents presented to the council.
The project will create 600 jobs during construction and 20 new permanent jobs at the refinery after the unit is built. The refinery currently employs 516 people.
