SASKATOON — Imperial Oil Ltd. continues to make progress on its biofuel refinery in Alberta’s Strathcona County that will consume massive amounts of canola oil.
“Once that facility is commissioned next year, it will be the largest renewable diesel manufacturing plant in Canada,” said Jason MacDonald, fuels policy adviser with Imperial.
Related stories:
The $720 million plant will produce about one billion litres of the renewable fuel annually.
It will use Canadian-grown canola oil as a feedstock produced from 2.5 million tonnes of canola seed annually, the output of two to three crush plants.
Read Also
Alberta crop diversification centres receive funding
$5.2 million of provincial funding pumped into crop diversity research centres
In many years, that would be the equivalent demand of Canada’s top export market.
“It’s a massive opportunity,” MacDonald said during his presentation at Canola Week 2024.
The company is also working on co-processing projects, where existing refineries are converted into facilities that can co-process renewable and traditional petroleum feedstocks simultaneously.
The result is a fuel that is recognized as renewable by international agencies.
“These are wonderful opportunities because they leverage our existing assets,” he said.
The projects are more capital efficient and can be commissioned quicker than building a renewable diesel plant from scratch.
Imperial’s first co-processing project will be commissioned early next year and will result in even greater demand for canola, said MacDonald.
However, he warned that the renewable diesel and co-processing industry is nascent and needs “durable” government policy support at both the federal and provincial levels to survive.
The reason it needs government support is simple — the price of the feedstock is double the price of the end product.
“It’s pretty clear why the economics are challenging there without policy,” said MacDonald.
Canada’s Liberal government enacted its Clean Fuel Regulations on July 1, 2023. However, a federal election is expected next year, which is making some biofuel proponents nervous.
“The truth is the future of some of these policies is uncertain,” said MacDonald.
While he is optimistic that Canada can have a thriving biofuel sector like they have in the United States, that is far from assured.
“I’d certainly hate to see the investment dollars for these projects or others like them to go south of the border,” he said.
The direct economic impact of Imperial’s Strathcona plant is enormous, starting with the 40,000 growers who will benefit from having a new market for 2.5 million tonnes of their canola.
Then there is the $1 to $1.5 billion in capital investment for the two to three new crush plants required to supply the facility with canola oil.
Those crush plants will employ 750 people during construction and provide another 80 permanent jobs once up and running.
The Strathcona renewable diesel facility will require 11,000 rail cars per year to transport the oil from the crush plants.
Then there is the $720 million facility itself, which will provide 600 temporary construction jobs and another 20 to 30 permanent jobs.
Another $1.6 billion is being spent on Air Products’ Edmonton hydrogen production facility, which will supply low-carbon hydrogen for Imperial’s plant.
MacDonald encouraged taxpayers who want these types of megaprojects in their communities to lobby their members of Parliament to keep the necessary biofuel incentives in place for years to come.
As well, he had a response queued up for those wanting to resurrect the old food versus fuel debate.
“We’re not looking to rob canola oil from the existing North American food market,” he said.
Instead, he would prefer to see the 40 to 50 per cent of canola seed that is exported every year to be crushed and used domestically.
In particular, he noted that the Imperial plant would be buying as much canola as China has in many years.
MacDonald ended his presentation by mentioning that the Imperial project is one of a handful that have either been built or are being considered by other companies in Canada.
Without the proper federal and provincial incentives in place, many of those projects will not proceed.
