DANVILLE — A biodiesel plant begins operation in Danville next week.

Blackhawk Biofuels, LLC is located adjacent to Bunge Milling on Anderson Street. After a private ribbon-cutting ceremony Wednesday, the plant begins operation next Thursday. The plant eventually will be able to produce 45 million gallons of biofuel per year.

Earlier this year, Blackhawk took over the plant from Biofuels Company of America LLC.

The cost of soybeans, which had skyrocketed in recent years, had kept the facility’s construction from completion before the new investors took over, Vermilion Advantage President and CEO Vicki Haugen said in May.

Although soybean prices have fallen, the plant will help the local ag economy by allowing farmers to sell their soybeans at a good price in Danville, according to Vermilion County Farm Bureau spokesman Tom Fricke.

The plant’s biodiesel would be created from Bunge’s soybean oil and eventually, alternative feedstocks like animal fats.

“It maybe won’t add to the local economy but it will maintain a market for the soybeans,” Fricke said.

“It ensures that ready market for soybeans … a pricing opportunity that area producers are able to benefit from.”

If a farmer is able to deliver to an end user like Bunge rather than an elevator in surrounding Vermilion County towns, they’re able to obtain higher prices.

Elevators would give farmers a lower price because they have to bundle their own transportation costs into the price they pay farmers.

This week soybean prices plunged to less than $9 per bushel and corn was around $3.43 per bushel.

But prices aside, Fricke says the long-term benefits of having biofuel created locally serves national interest.

“It decreases our overall dependence on oils as a fuel supply,” he said.

“That’s always a good thing. Anytime we can be self-sufficient in our needs as a country, we’re better off. Biodiesel is one way we can meet that self-sufficiency.”

Haugen agrees the plant has a myriad of benefits for the area.

“It’s important not only to the local economy, but it’s an important step in our focus on alternative energy uses and becoming a greener society,” she said.

Part of the plant’s construction delay — in addition to high prices — was the plant’s additional construction of storage facilities for the animal fat feedstocks.

Alicia Clancy, Renewable Energy Group communications specialist, said the plant is situated ideally not only to take advantage of the local ag markets, but also for marketing.

The plant sits near Missouri, Kentucky and Indiana, so it can draw raw materials from the region.

Also, the plant is the easternmost in the REG network, so it will serve customers into the northeastern states.

REG has contracted with Blackhawk to purchase animal fat feedstocks from livestock facilities.

Danville Mayor Scott Eisenhauer said the plant not only creates some 27 new jobs, but also retains jobs in Danville.

“It also highlights the essence of the agriculture community in our county and puts it in the forefront of advancing alterative fuel technology,” he said.

The project required the cooperation of many parties, including state and local officials and the Blackhawk investment group.

The state contributed $19.8 million to the project that combined with some $25 million in private investment.

“Not only did we learn some great lessons, but we built some fantastic relationships that will continue to make us stronger and stronger as we move onward in developing our community,” Eisenhauer said.