Skip to main content

Chemical giant Dow Inc. wants to build the world’s first net-zero ethylene plant just outside Edmonton, expanding and retrofitting an existing facility with carbon capture technology so it can triple production.

It’s part of a larger move by the Michigan-based company to spend about $1-billion annually to decarbonize its assets around the world. The planned facility would be in the same vein as numerous other projects slated for the Alberta Industrial Heartland complex in Fort Saskatchewan, as companies try to demonstrate they are serious about lowering their carbon footprints.

Shell, for example, announced in July that it wants to build a large-scale carbon capture and storage project at its Scotford Complex. A month earlier, Pembina Pipeline Corp. and TC Energy Corp. unveiled a plan for a carbon transportation and sequestration system that will be capable of transporting more than 20 million tonnes of carbon dioxide each year.

Dow says its new project would add about 1.8 million tonnes of capacity to its existing facility by 2030, allowing it to produce about 3.2 million tonnes of low- or zero-carbon ethylene for its customers. Ethylene gas, which is derived from oil or natural gas, is transformed into a range of chemical compounds for use in everything from food packaging to antifreeze, vinyl and medical devices.

Dow chairman and chief executive Jim Fitterling said in a statement that the facility would help “meet the increasing needs of customers and brand owners seeking to lower the carbon footprint of their products.”

If it goes ahead, the facility would turn waste gas into hydrogen and use it in the production process. Captured carbon dioxide would be transported and stored at facilities owned by other companies.

Dow said it expects to allocate about $1-billion of capital spending annually to the project.

Dow Canada president Tyler Edgington told The Globe and Mail in an e-mail that the company chose Fort Saskatchewan for the new project because of the region’s existing carbon capture infrastructure, its competitive feedstocks and attractive government partnerships.

He said local, provincial and federal incentives play a key role in investment decisions and will help expedite the petrochemical industry’s transition to net-zero.

Alberta Premier Jason Kenney was quick to trumpet the project. Calling it “fantastic news for Alberta’s economy,” he said his government had worked closely with Dow since the spring of 2019 to land the project.

“Today’s announcement is good news both for our traditional energy sector and for diversification,” he said in a statement. “Major petrochemical projects like this create long-term additional demand for Alberta natural gas, which in turn will create jobs in the exploration and service sectors. At the same time, this expanded polyethylene and ethylene derivative plant will further diversify our economy and increase global exports.”

Dow’s plan is yet to be approved by the company’s board of directors. Mr. Edgington wouldn’t give a timeline on that decision but said he expects the site to be up and running by the end of the decade.

He said the project would allow Dow to decarbonize about 20 per cent of its global ethylene production capacity and increase its polyethylene supply by about 15 per cent.

Mr. Fitterling said Canada’s support for similar projects “can serve as a model for how government investment can encourage the development and accelerate adoption of emissions-avoiding technologies and solutions.”

With files from Reuters

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error

Editorial code of conduct

Tickers mentioned in this story