The City of Shelbyville Common Council approved a tax abatement Monday evening that would pave the way for POET Biorefining Shelbyville to double its production.
General Manager Jason Lucas came before the board to explain the plans and how it would benefit the city and greater area it serves.
The company started in South Dakota in 1987 and has since grown into the world’s largest producer of bioethanol and bio co-products, including 3.1 billion gallons of bioethanol across its 35 locations (including five in Indiana). Products are shipped to more than 25 countries across the world.
“We purchase over 1 billion bushels of corn annually from co-producers across the heartland, including over 10 percent of Indiana’s crop, which is 118 million bushels,” Lucas said. “We employ over 2,600 total employees, including 200 in the State of Indiana.”
The company has added more than 1 billion gallons of ethanol production to its fleet through expansions and acquisitions since 2020.
The Shelbyville location began operations in 2020, and the biorefinery received a tax abatement at that time, which is set to expire in three years.
“Shelbyville has consistently been one of, if not the best performing facility in POET’s fleet, producing 98 million gallons of ethanol, 250 tons of dried distillers grain and 33,000 pounds of distillers corn oil annually,” Lucas said.
Bioethanol is used in gasoline motorists purchase at the pumps, he said. About 10 percent of each gas tank is ethanol, and many states have adopted the E-15 or 15 percent ethanol.
Dried distillers grain (DDG) is a byproduct of ethanol production that can be sold as cattle, hog and chicken feed. Lucas said the Shelbyville location ships 110 c-containers per week of DDGs to 28 different countries across the globe.
Distillers corn oil is also a byproduct that can go into animal feed or it can be further refined into renewable diesel.
“To make these products, we purchase 32 billion bushels of corn from local producers each year,” Lucas said. “The total number of farmers we work with varies year to year, we have relationships with over 1,400 producers in our draw radius.”
The Shelbyville facility draws in parters from a 50-75 miles radius.
The success has allowed the opportunity for POET to expand the Shelbyville bioethanol plant.
“Shelbyville is being considered as a finalist for multiple reasons: local corn availability, proximity to bioethanol markets, business climate and friendly local government,” Lucas said. “This project is estimated to result in just over $200 million in capital spend, and will effectively double the output of the plant all on the existing footprint.”
Construction would last 18-20 months, bringing in 250 temporary skilled labor positions. They project to add 20 new full time positions, or $1 million in additional payroll.
“This will also create demand for an additional 32 million bushels of local corn annually,” Lucas said. “Our internal estimates will show this will have a positive effect to local bases of about 17 cents per bushel – that’s big if you’re a farmer – which equals about $176 million in additional procurement spend annually.”
Lucas and POET asked for a tax abatement to incentivize the company to choose Shelbyville as its expansion.
Even with that abatement, POET estimates it would generate $17.4 million in tax revenue, Lucas said.
Mayor Scott Furgeson said this abatement also includes a promise by POET to partner in the build out of future phases of Tom Hession Drive. The goal is to connect Tom Hession Drive all the way out to State Road 44.
“They want to be a partner on that project and work with us, and that was part of the give-back on the abatement, because it’s in a TIF so we can use part of that money to do Tom Hession III and then IV,” Furgeson said.
Shelby County Executive Director Brian Asher reiterated that this expansion would be a huge asset for the whole county.
“This is a big thing for not only the City of Shelbyville, but also our county,” Asher said. “We’re an agricultural county. This would give a 17 cent boost to the farmers on each bushel. My second point is there’s a lot of people on social media who say ‘tax abatements are bad’ – this is exactly why we do tax abatements. Starting next year, they’ll be paying $134,000 [in taxes] and you think, ‘Wow, that’s great.’ Well, in four years from there, they’ll be paying $1.4 million, and two years from that it’s $2.5 million. This will be a huge impact to our community.”
With that approval, construction would begin in March and completion is expected fourth quarter 2027.
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