EDMONTON, Alta. – Construction of another renewable diesel plant is underway in Western Canada.
On Jan. 26, Imperial Oil Canada confirmed it plans to build a $720 million renewable diesel facility at its Strathcona refinery near Edmonton.
The plant, when fully operational, will produce more than one billion litres of renewable diesel per year, or 20,000 barrels per day.
Imperial says it will use “locally sourced feedstock” for the renewable diesel plant, which will likely be canola. Initial construction of the project has started and Imperial expects the plant to produce renewable diesel by 2025.
Once operational, the target market for the fuel is British Columbia.
“A significant portion of the renewable diesel from Strathcona will be supplied to British Columbia in support of the province’s plan to lower carbon emissions. Imperial also intends to use renewable diesel in operations as part of the company’s emission reduction plans,” Imperial said in a release.
B.C. has adopted low carbon fuel standard, which is creating new demand for fuels that satisfy its emission requirements.
California has a similar standard.
Renewable diesel is different from biodiesel and is often described as a “second generation” biofuel. Biodiesel must be blended with petroleum diesel, but renewable diesel can be used as a standalone product to replace diesel.
Most plants use a mix of animal fat and vegetable oils to produce the renewable dieselImperial Oil announced its intention to build a renewable diesel plant near Edmonton in 2021, but this week’s news makes it official.
The project means more demand for canola and canola oil. In about the last 18 months, multiple firms have announced plans to build renewable diesel plants in Western Canada:
• Parkland Corp, a Calgary company, intends to build a renewable diesel plant in Burnaby, B.C., that will be capable of producing 6,300 barrels per day
• Federated Co-op and partners are constructing a $2 billion canola crushing and processing plant in Regina, which will include a 15,000 barrel per day renewable diesel facility
U.S. companies and co-operatives are also constructing renewable diesel plants, south of the border. Marathon now operates a renewable diesel facility in Dickinson, North Dakota, which became operational in 2021.
A lot depends on vegetable oil prices and availability, but it’s expected that the renewable diesel sector will become a significant buyer of canola and canola oil.
The Canadian Oilseed Processors Association has forecasted that the biofuel industry will be buying 6.5 million tonnes of canola per year by 2030, up from 1.8 million tonnes in 2020.