The upgrade project involves addition biodiesel distillation capabilities to the 45 million gallon capacity biorefinery, and improving pretreat capacity, storage, and logistics.
The distillation process provides pure form of biomass-based diesel, which will meet industry standards.
Renewable Energy Group manufacturing vice-president Brad Albin said: "These upgrades increase this biorefinery’s strong and healthy appetite for lower cost, waste feedstocks which are sourced locally and regionally from our supply chain partners."
Fifth Third Bank plans to fund up to $12m of the upgrade.
Renewable Energy Group president and CEO Daniel Oh said: "REG Danville already has a proven record of success as part of our network of multi-feedstock biorefineries.
"Enhancing the capabilities here, as we have done at several of our other plants, can allow REG to provide greater volumes of lower cost, lower carbon, higher quality advanced biofuel to our customers that increases energy security, food security and environmental benefits for North America."
REG earlier upgraded biodiesel plants located in Albert Lea, Minnesota; Seneca, Illinois; Mason City and Newton, Iowa. The company is currently upgrading renewable hydrocarbon diesel biorefinery in Geismar, Louisiana.
