NEW ORLEANS — A $1.3 billion chemical manufacturing facility that Japanese conglomerate Mitsubishi plans to build in Louisiana is economically questionable and will unnecessarily increase greenhouse gas emissions, according to a report published Monday by an energy think tank.
The proposed Mitsubishi plant is “the wrong project, at the wrong place and time, with the wrong financial scenario,” said the report by the Institute of Energy Economics and Financial Analysis, or IEEFA, an Ohio-based nonprofit.
Mitsubishi Chemical Group could produce 350,000 tons of methyl methacrylate (MMA) annually, a chemical component found in cement, adhesives, textiles and plastics.
The facility would also be among the state’s top 50 greenhouse gas emitters, according to data from the Environmental Protection Agency. And it’s being built in Ascension Parish, along a stretch of the Mississippi River between Baton Rouge and New Orleans known as ” cancer alley “due to heavy industrial pollution.
The plant would emit more than 780,000 tons of carbon dioxide annually, while an alternative production process exists that is less dependent on fossil fuels, the IEEFA report said.
Mitsubishi mention in 2022 that the proposed Louisiana facility will “achieve the lowest possible carbon footprint for MMA production.” The proposed facility’s natural gas-based production process is also intended to help transition the industry away from the dominant method of cyanide-based production.
According to IEEFA, Mitsubishi does not have to choose between cyanide or natural gas for the production of the chemical component, because there is another option: an alternative technology based on biofuel has become viable and is already being used elsewhere by Mitsubishi and its competitors.
Market conditions and the economic viability of the facility have also deteriorated, IEEFA reports. Compared to when Mitsubishi began planning the facility in 2014, construction costs have risen, prices for the chemical component have flattened and growth expectations have been lowered.
According to Tom Sanzillo, director of financial analysis at IEEFA and former deputy auditor for New York, the global market for methyl methacrylate will be oversaturated by the time the plant is expected to come on stream in 2028.
The analysis shows that US producers could increase their methyl methacrylate production capacity to more than 1.2 million tonnes, while only having to produce two-thirds of that amount themselves.
“The US market is not expected to grow beyond historical norms,” the report said.
IEEFA notes that it is unlikely that the Mitsubishi plant will find a market for its methyl methacrylate in China, the largest consumer and producer of the chemical compound. Earlier this year, Mitsubishi closed a methyl methacrylate plant in Hiroshima, sourcing an oversupply from China.
According to the report, both Europe and the Middle East are facing market uncertainties due to the ongoing wars in Ukraine and Gaza.
Eri Nishumata, a representative of Mitsubishi Chemical Group, declined an interview request on behalf of the company, saying that “the final investment decision has not yet been made.” Mitsubishi did not respond to a request for comment on IEEFA’s analysis.
Mitsubishi received an estimated $17 million in tax relief from the state of Louisiana for the first year of operations, but multiple delays in the start of construction have pushed back the start date. Sanzillo said he thinks the company is waiting to see if market conditions improve before moving forward.
“The company is now using the government as a speculative instrument,” he said. “And you shouldn’t do that with subsidies, you should continue to do it.”
The Louisiana Department of Environmental Quality stated in a February public notice that the Mitsubishi plant is not expected to have “a significant adverse impact on soil, vegetation, visibility or air quality in the area of the facility.”
Environmental groups point out that the hundreds of tons of pollutants the plant is said to be emitting have been linked to adverse health effects, including respiratory infections, lung cancer and stroke. A February report public hearing The permit to build the aircraft facility was met with loud opposition from some community members, while others praised the expected jobs and hopes for economic benefits.
The Louisiana Department of Environmental Quality and Ascension Parish authorities could not be reached for comment.
Although the Mitsubishi plant is expected to employ 125 people, Ascension Parish resident Ashley Gaignard questions whether the plant will benefit her community or the environment.
“Bringing more industry into the community is a false solution,” said Gaignard, 47, who founded the environmental justice nonprofit Rural Roots. “Industry is the wheel that keeps Louisiana burning. And that’s the real truth.”
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Jack Brook is a staff member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on under-reported issues. Follow Brook on the X social platform: @jack_brook96.