Imperial Oil Ltd. IMO-T pledged to build the country’s largest renewable diesel refinery on Thursday, investing $720 million in a facility that will convert Alberta crops into fuel that will primarily help British Columbia meet its production goals. emissions reduction.
Imperial’s board has formally approved the construction of a facility that will produce 1 billion liters of diesel a year at its Strathcona refinery, near Edmonton, using locally sourced vegetable oils (soybean, canola or sunflower) and hydrogen.
Calgary-based Imperial said it will direct a significant portion of the fuel to BC filling stations to support the province’s plan to reduce greenhouse gas (GHG) emissions. Imperial also plans to fill its own fleet of vehicles with Strathcona diesel, using a formula that produces fuel suitable for harsh winters. To a lesser extent, the Imperial project will also help Alberta achieve its goal of an 11% reduction in GHG emissions by 2030.
“Imperial supports Canada’s vision of a lower emissions future,” said Brad Corson, Imperial’s chief executive officer, in a press release. “We are making strategic investments to reduce greenhouse gas emissions from our own operations and to help customers in vital sectors of the economy reduce their emissions.”
The Strathcona plant facility is expected to cost $720 million, up from an estimated $500 million when the project was first announced less than two years ago. An Imperial spokesman said the budget increase reflects inflation in construction costs and the expansion of the project’s scope, which now includes a larger rail link. The project represents a significant portion of Imperial’s $1.7 billion in capital expenditures planned for this year.
The Strathcona plant is expected to start shipping diesel in 2026. Imperial said construction will create 600 jobs over the next two years and create hundreds more jobs at suppliers. The project still requires regulatory approval, which the company said it expected to receive “short term.”
Imperial forecasts that the diesel from the new facility will reduce GHG emissions from diesel-powered vehicles by about 3 million metric tons per year, the equivalent of taking approximately 650,000 cars off the road each year. The hydrogen used to make diesel will come from natural gas produced in Alberta, supplied by Pennsylvania-based Air Products & Chemicals, Inc.
The Strathcona plant is the first renewable diesel facility at parent Exxon Mobile Corp’s global XOM-N operations. When the project was first announced in 2021, Exxon Mobile executives said it was a test bed for the technology that could be used all over the world.
“Canada’s clean fuel regulation could be a model for other countries,” said Joe Blommaert, former president of Exxon Mobil’s low-carbon solutions division. “Technology-neutral, life-cycle carbon intensity-based fuel policies, such as the one proposed in Canada, can rapidly scale projects like Strathcona and quickly reduce emissions at little cost to society.”
The Strathcona plant will produce approximately 20,000 barrels of diesel per day, or half of the planned 40,000 barrels of renewable fuel that Exxon Mobile forecasts it will produce each day for the next two years.
By 2020, Exxon Mobile’s global goal is to produce 200,000 barrels per day of low-emission fuels. The company already has contracts to sell this fuel in jurisdictions like California, which have set goals to reduce GHG emissions.
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