Regina crush

The chair of Economic Development Regina says a proposed renewable diesel facility would likely trigger construction of Western Canada’s first new canola crush plant in six years.

True North Renewable Fuels Ltd. is proposing to build a renewable diesel plant in Regina that would produce one billion litres of the biofuel annually by 2025.

The plant would require one million tonnes of canola oil per year and the most logical source for that would be a brand new crush facility built adjacent to the plant, said Frank Hart.

“It would be relatively easy to finance a canola crush plant because you’ve got a dedicated offtake market,” he said.

The last greenfield canola crush plant built in the Prairies was Cargill’s facility in Camrose, Alta. that opened for business in 2015.

Hart said the principals of True North have had conversations with potential partners who have expressed interest in building a plant to supply the canola.

Hart said it makes more sense to crush the canola in a new plant built adjacent to the proposed renewable diesel facility than to truck or rail the oil in from an existing crush facility.

Economic Development Regina recommended that the city put up a $1 million grant to help fund a front-end engineering and design (FEED) study for True North’s project. Regina city council recently approved the grant.

True North needed either the province or the city to provide the grant to be eligible for a further $5 million in funding from Agriculture Canada’s Agriculture Clean Technology Fund.

Hart said the province wasn’t going to do it.

“They didn’t want to put money in at this stage,” he said

“They were much more willing and have committed to putting tax credits on the table.”

Hart said it takes government grants to get engineering work done at this stage of a renewable fuel project because credit markets are under-developed for that type of business.

True North is going to have to raise an additional $15 million on its own to complete the FEED study.

The hope is that the True North project will blossom into something much bigger. Economic Development Regina connected the company with Protein Industries Canada to explore the idea of attracting a canola protein extraction plant to the project, creating an “agriculture value-added complex” in Regina.

The plant would use the byproduct of the crush facility to create high-value protein extracts.

“Rather than just push more standard canola meal in the market into the dairy industry, it increases the value of the meal you can extract and therefore the competitiveness of what you can pay farmers for the canola seed,” said Hart.

He said Protein Industries Canada has invested heavily in a project led by Boteneco Inc. aimed at commercializing processing technology that will create new canola protein products.

Economic Development Regina estimates that the entire complex with all three projects would result in a total capital expenditure of $2.4 billion.

It would create an estimated 2,750 construction jobs and 300 permanent operating jobs.

The megaproject would generate an estimated $1.52 billion in annual gross domestic product. Construction of the complex would create another $950 million in GDP.

The renewable diesel project would be financed through a combination of debt and equity. True North has spoken to investors in Canada, the United States and the European Union.

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