FCL purchases ethanol plant

Federated Co-operatives Ltd. has reached a deal to purchase Terra Grain Fuels’ 150-million-litre ethanol plant, located near Belle Plain, Sask.

“Until this point we were purchasing (ethanol) from a third party to blend in our gasoline,” said Pam Skotnisky, vice-president of Strategy at Federated Co-operatives Limited. “Now we are able to produce our own ethanol and we’re also able to consider how we are going to meet increased renewable fuel standards.”

Although the company sees the benefits of being able to produce its own ethanol, Skotnisky said it also needs to be mindful of the downsides of ethanol production.

“One of the things that we look at is the food for fuel conversation. So we are cognizant of using feedstocks that are rich in nutrients from a general consumer perspective and moving those in to a fuel source,” said Skotnisky. “Canada is in an ideal place to feed the world and so diverting stock that could be a source of that is something that we need to be careful of as we make our decisions.”

Skotnisky says it is business as usual for the 45 workers currently employed at TGF, but FCL will be looking at ways it can make positive changes to the business.

“We are going to continue to employ (TGF’s) workforce. We see a real opportunity to continue to invest in the facility to make some improvements along the line of efficiency,” said Skotnisky. “I also mentioned the potential to enhance the facility through the addition and investment in carbon capture technologies in the future.”

The carbon intensity of making ethanol is another thing that FCL is looking to lower at TGF. Currently, TGF uses a variety of feedstocks for its ethanol including corn, wheat, rye and pea starch, among others.

“Different feedstocks have different carbon intensities. Of the feedstocks that Terra Grain Fuels uses, corn has the highest carbon intensity. Pea starch has the lowest,” said Cam Zimmer, communications manager at FCL. “There are plans to increase the amount of low-carbon feedstock like pea starch at the facility. As more low carbon feedstock from a variety of sources becomes available, FCL and Terra Grain Fuels will invest in technology in order to use those additional feedstock sources.”

Skotnisky said this deal is also an exciting investment for the future of FCL and gives it an opportunity to expand its relationships with the more than 400 producers that supply grain to TGF.

TGF president Calvin Eyben said the deal, which became official May 31, will have a positive impact for both companies and for Saskatchewan.

“We are very pleased that our business is being acquired by FCL, a long-term and trusted customer of TGF and one of the most stable and successful organizations in Western Canada,” Eyben said in a news release. “This is a big win for TGF, FCL, the province of Saskatchewan and all of our stakeholders.”

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