Retaining existing businesses and attracting diverse industries are pivotal to economic growth in South Louisiana.
“These businesses will provide job opportunities for our residents and increase the tax base for the region and state,” said Grady Fitzpatrick, chief business development officer at GNO, Inc.
As part of these new industries, battery manufacturers are ranking high on the list. Louisiana has been successful in attracting some of these companies, but there is still a long way to go.
Recently, the Japanese chemical company, UBE Corporation, announced that it is investing $500 million to establish a manufacturing facility for key electric vehicle lithium ion battery ingredients dimethyl carbonate (DMC) and ethyl methyl carbonate (EMC) at the UBE C1 Chemicals America facility in Jefferson Parish’s Cornerstone Energy Park.
“Currently, the U.S. battery value chain is reliant on imports from China for almost all DMC and EMC supply,” said Tom Yura, chief operating officer and site director of UBE C1 Chemicals America. “This dependency creates risks for the U.S. electric battery and battery electric vehicle markets that include not only potential supply interruptions due to an extended supply chain, but also pricing volatility due in part to geopolitical tensions between the U.S. and China.”
Yura went on to say that as U.S. demand for electrolyte continues to grow, driven by the adoption of battery electric vehicles, the need to onshore production intensifies to mitigate these risks. “It is estimated that by 2036, over 400,000 metric tons of electrolyte will be needed to fulfill North American battery electric vehicles and energy storage systems demand,” he said. “Nearly 80 percent of the chemical composition of electrolyte is linear carbonate esters with DMC/EMC representing half of the linear carbonate esters used in the marketplace today.”
The UBE C1 Chemicals America project, which is scheduled to be completed in mid-2026 with operations to begin in late 2026, will bolster the domestic battery components supply chain by reducing the current heavy reliance on Chinese imports.
“[It] will be the first commercial-scale DMC and EMC manufacturing facility in the U.S., redirecting over $200 million of production to domestic manufacturing from heavy reliance on Chinese imports,” Yura said. “The project will provide the U.S battery value chain resilience by increasing domestic manufacturing capacity to meet a significant share of current and future demand; and [increase] U.S. battery chain competitiveness, through competitive cost structure and pricing.”
Yura added it will also enhance U.S. national security by providing technological leadership and significant domestic production capacity. The project will also create high-quality jobs, improve the tax base and add a new corporate member to the local community.
Once operational, the UBE project will be capable of producing 100,000 metric tons of DMC per year and 40,000 metric tons of EMC annually. “Based on the assumption that a standard battery electric vehicle uses a 60 to 100kWh battery, the project’s targeted annual production volume of 100,000 metric tons of electrolyte solvent would enable annual production of approximately 4 million (63 percent) of the 6.3 million battery electric vehicle projected production in 2030,” Yura said.
UBE Corporation chose to locate its project in Jefferson Parish for a number of reasons. For starters, Cornerstone Energy Park is currently home to several chemical manufacturing plants. As such, it has much of the needed infrastructure, it is in close proximity to necessary transportation routes and there’s a trained workforce in the area that is needed for the project’s success.
“Our logistical advantages combined with the availability of raw materials give companies a strategic advantage to be based in Louisiana,” Fitzpatrick said. “Our high-quality workforce also has the transferable skills to easily fill the needed jobs in these new facilities. As these companies choose Louisiana, we will continue to see more of the supply chain cluster around these facilities.”
In order to secure the project, the state of Louisiana offered UBE Corporation a competitive incentives package. “In addition to the tax incentives, which are necessary to attract and retain large capital-intensive investment like the new DMC/EMC plant to Louisiana, the project will also use LED FastStart,” Yura said. “This program will be utilized to support the hiring and training of local personnel needed to operate the new production plant. FastStart has outstanding resources and capabilities to support new and existing companies as they build the talent needed to operate their business.”
While there has been a weakening in demand for electric vehicles, battery manufacturing projects are pushing forward. “There have been over 30 battery plants announced across the Midwest and Southeast with a combined $100 billion in investment,” Fitzpatrick said. “The demand for batteries is not just for electric vehicles, but also grid storage for solar and wind generation.”
Most importantly, Fitzpatrick said that batteries are needed to stabilize the power grid, which helps manage peak demand. “As more renewable energy comes online, batteries are needed to store this power,” he said. “Wind power, for instance, is not a consistent source of power, so, to meet demand, it will need to be stored for times of need. Batteries can also be used for backup power for homes and businesses as a reliable source of stored energy during outages.”
According to Greg Upton, executive director and associate professor-research at the Center for Energy Studies at Louisiana State University, the share of electricity coming from intermittent sources, such as solar and wind, is likely to grow.
“At the same time, the number of consumer items (vehicles being one example) using batteries is also growing,” he said. “Thus, the need for batteries of all sizes, from utility scale, to vehicles, to small applications, are all likely to grow in the coming decade.”
Currently, Louisiana has battery manufacturing component projects in the pipeline. And GNO, Inc., continues to work projects across the value chain of battery manufacturing. “The initial wave of announcements clustered to the OEM auto manufacturers,” Fitzpatrick said. “Due to Louisiana not having [EV] facilities, we did not attract them. As we continue to build out the supply chain of batteries—solvents [and] higher value chemicals—then we should see the supply chain and OEM also look to place facilities in Louisiana.”
In order to attract more battery manufacturing companies to the area, GNO, Inc., is proactively marketing the region and leveraging its affordable electricity, natural gas, pipeline infrastructure of petroleum and chemical products, and logistical advantages (river, rail and highway access).
“Louisiana has long been a hub for manufacturing energy and chemical products,” Upton said. “Batteries are one potential opportunity to grow this area. Our historical energy sector employs workers and contributes significant tax revenues to the state and local government. Expanding battery manufacturing is an example of an opportunity for the state and is consistent with our historical comparative advantages. We have access to low-cost electricity, access to many chemical products as well as a workforce that is accustomed to these types of jobs.”
