August 18, 2006

GLADSTONE – Governor Jennifer M. Granholm and Michigan Department of Agriculture Director Mitch Irwin today joined Richard Vande Vusse, president of Ag Solutions, Inc., and Michigan soybean farmers to celebrate the grand opening of Michigan’s first commercial biodiesel processing plant. The Upper Peninsula plant was built with a capital investment of $1.3 million and will initially employ six people. 

“Developing and producing alternative energy with companies like Ag Solutions Inc. in Gladstone is a key component of my economic plan to diversify Michigan’s economy,” Granholm said.  “The state that put the nation on wheels should be the state that makes those wheels independent of foreign oil.”

The plant is expected to be in operation next week with an initial capacity of 5 million gallons per year that could be expanded in the future. Ag Solutions, Inc., will begin biodiesel fuel production with refined virgin soybean oil feedstock and then expand to other feedstocks, including recycled cooking oil and processed animal fats. 

“All of Michigan will benefit in this instance where one person’s trash is another person’s treasure,” Irwin said.  “Instead of sending waste from packing plants and restaurants to landfills, this Gladstone company has developed an innovative process to turn this product into renewable biodiesel fuel.”

A January 2006 report estimates Michigan's agricultural industry has a $60.1 billion impact on our economy annually, and that impact is only expected to grow in the coming years. In fact, a March 2006 biodiesel feasibility study found that with an investment of $7 to $12 million, a stand-alone 5 to 10-million-gallon biodiesel plant could be built in one of several Michigan locations.  The study was financed in part by a USDA Rural Business Enterprise Grant from USDA Rural Development, with support from Capital Area Innovative Farmers, individual farmers, CAP Cooperative, Michigan Soybean Promotion Committee, Corn Marketing Program of Michigan, Michigan Farm Bureau, Michigan/National Farmers Union, Gratiot County MSU Extension, Greater Gratiot Development and MDA.

“The opening of this plant is the culmination of more than two and a half years of persistence, hard work and the foresight of the soybean industry to recognize the value of bringing biodiesel production to Michigan,” said Vande Vusse. “This plant will have an even greater impact in the U.P., where biodiesel is harder to obtain due to transport costs and where good paying, secure jobs will boost the local economy.”

Michigan soybean producers expect to harvest about 2 million acres of soybeans this growing season, with a farm-gate value estimated at $385 million.

“We're excited that Michigan soybean producers can now proudly say, 'Michigan has a biodiesel plant!'” said Gail R. Frahm, executive director of the Michigan Soybean Promotion Committee.  “Soybean producers nationwide have dedicated their sweat and hard-earned dollars to biodiesel promotion, research and market development, and through their efforts have helped expand the market for biodiesel fuel.”

In July, Granholm signed legislation that provided a number of incentives to promote the production, sale and use of alternative fuel. The package included tax incentives, providing matching grant opportunities, creating additional renaissance zones and establishing a Renewable Fuels Commission within the Michigan Department of Agriculture to recommend strategies in the promotion and research of biodiesel, ethanol and other renewable fuels. Granholm also called for the state of Michigan to install renewable fuels pumps at its motor transport facilities statewide so that state employees who drive state-owned vehicles have easy access to renewable fuels. 

Michigan’s renewable fuels legislation includes:

• Senate Bill 1074, Public Act 268
• Senate Bill 1075, Public Act 269
• Senate Bill 1078, Public Act 270
• Senate Bill 1079, Public Act 271
• House Bill 5181, Public Act 272
• House Bill 5752, Public Act 273
• House Bill 5754, Public Act 274

For more information about renewable fuels, the biodiesel feasibility study or Michigan agriculture, visit www.michigan.gov/mda.  Additional information about biodiesel can be found at the National Biodiesel Board’s Web site, biodiesel.org.  For more information about Michigan soybean farmers and soybean production, visit michigansoybean.org.