German company to buy South Bend ethanol plant, invest $230 million into renewable energy production
At multiple points in the last decade, it seemed doubtful the ethanol plant on the southwest side of South Bend would ever operate again.
The plant was shuttered in 2012 and lay dormant for two years before being saved from the scrap heap. Now, the plant is poised to see an unprecedented level of investment after a German energy company announced this week it has bought the site.
Verbio's North American branch said it plans to spend $230 million over the coming years on upgrades to the plant so that it can produce both ethanol and natural gas.
In a release, Verbio executives said they are excited about the venture and chose the site because it “offers a competitive location as well as existing infrastructure and meets our requirements for access to the natural gas grid, electricity, feedstock sources and water supply.”
For South Bend Regional Chamber of Commerce president Jeff Rea, Verbio’s announcement is a jolt of good news for the area, especially after the history of uncertainty surrounding the plant.
“This announcement [Monday] by Verbio was terrific and this uncertain future now has some certainty to it,” said Rea.
Verbio intends to retain all 61 employees currently working at the factory and plans to add eight new jobs by 2025.
Over the coming months, Verbio said it will look to integrate the production of ethanol with the production of natural gas.
Rea said a key factor in the purchase was a piece of recent federal legislation called the Inflation Reduction Act, which provided financial incentives to companies working in renewable energy.
“The federal government’s movement in all this is really significant,” Rea said. “We’ve seen solar that’s advanced because of it. We’ve seen battery technology advance because of it. There’s quite a bit of investment the federal government has helped spur through some of the different finance programs they’ve put together.”
South Bend’s director of community investment Caleb Bauer said Verbio is seeking tax abatements and the common council will decide on those in the coming weeks.
In addition to the value brought by the plant itself, Bauer said the factory buys around 28 million bushels of corn a year which is good for local farmers. With Verbio making a push into natural gas, farmers will likely be able to sell other byproducts to the plant as well.
“One big piece for us is looking at what is the economy of the future and how can South Bend play a pivotal role in the economy of the future. I think things like natural gas, things like ethanol production are a part of that economy of the future,” Bauer said. “We’re thrilled Verbio sees that opportunity here in South Bend.”
The ethanol plant was shuttered for two years in 2012 when its parent company New Energy went bankrupt. In 2014, Noble Americans bought the factory and made millions of dollars in improvements to get production back online. In 2018, Mercuria Investments purchased the plant and put in another $30 million in upgrades.