Story by Lisa Johnson •
Premier Danielle Smith takes part in news conference where the US$8.8 billion Path2Zero Fort Saskatchewan project was announced on Wednesday, Nov. 29, 2023.© Provided by Edmonton Journal
Dow’s plan to expand capacity and decarbonize its petrochemical facility in Alberta could see up to $2.2 billion in tax credits and grants from federal and provincial governments.
Dubbed Path2Zero, the more than $11.5 billion project in Fort Saskatchewan, northeast of Edmonton, aims to reduce emissions by the equivalent of about one million metric tonnes of CO2 per year using carbon capture and storage, while converting hydrogen to power the site’s furnaces.
Touted as the world’s first net-zero emissions ethylene cracker and derivatives site of its kind, the project was first proposed in 2021. Michigan-based Dow Inc. is investing Cdn$8.9 billion, along with another $2.7 billion from partner companies.
CEO Jim Fitterling said at a Wednesday news conference government support at every level has been crucial in getting to a final investment decision, first announced by the board of directors Tuesday.
“It will serve as a leading example that industrial decarbonization is not only possible, but can also be profitable,” he said of the natural-gas-to-plastics complex.
The project will be the first to access federal investment tax credits targeted at carbon capture utilization and storage (CCUS) and clean hydrogen worth up to $400 million.
Related video: Freeland, Smith announce major new Dow investment in Alberta (Global News) Duration 1:58 View on Watch
Alberta Premier Danielle Smith said Wednesday the province will provide a 12 per cent grant as high as $1.8 billion, divided into three rebates over three years of production, through its Alberta Petrochemical Incentive Program (APIP).
“This investment is a vote of confidence in Alberta,” said Smith.
Deputy Prime Minister and Finance Minister Chrystia Freeland said Wednesday it’s proof that the Liberal’s economic plan is working.
“The green transition is an economic transformation that is comparable only to the industrial revolution itself, and countries around the world are in a competition to be the ones who are the leaders in that transformation,” Freeland said, pointing to the “really big cheque” that the United States wrote with its Inflation Reduction Act.
Industry groups, including in oil and gas, and both the federal and provincial governments, aim to reach net-zero emissions by 2050
Wednesday’s joint news conference comes a day after Smith announced the province will offer up to 12 per cent of capital costs for new projects under a similar, new program, the Alberta Carbon Capture Incentive Program (ACCIP)
Deputy Prime Minister Chrystia Freeland meets Dow employees prior to a news conference where the US$8.8 billion DOW Path2Zero Fort Saskatchewan project was announced on Wednesday, Nov. 29, 2023.© David Bloom
‘Historic work’
Federal Innovation, Science and Industry Minister François-Philippe Champagne said the “green plastic” plant represents the biggest project in Dow’s 126-year history.
“This is historic work,” he said.
Fort Saskatchewan Mayor Gale Katchur said it’s been about eight years since she was first asked to sign a non-disclosure agreement in talks on the project.
“Dow’s expansion will deliver a significant economic boost — it will create numerous jobs and attract more business ventures for years to come,” she said.
The company said the expansion could create 400 to 500 permanent jobs, as well as an estimated 8,000 construction jobs. To claim the federal tax credits in full, Dow will be required to pay prevailing union wages and to provide apprenticeship training.
Fitterling said the company decided to expand in Alberta because of the local workforce, low cost natural gas and feedstock ethane, along with access to existing CO2 transportation and storage infrastructure.
Dow chairman and CEO Jim Fitterling announces the US$8.8 billion Path2Zero Fort Saskatchewan project on Wednesday, Nov. 29, 2023.© Photo by David Bloom
Dow plans to begin construction in 2024, with capacity additions expected to come online beginning with the first phase in 2027, and a second phase starting in 2029. It will include building a new ethylene cracker and boosting its polyethylene production capacity by two million tonnes each year.
Alberta’s Industrial Heartland Association said in a news release Path2Zero will be one of the largest capital investments in the Industrial Heartland’s history.
“This investment signals that Alberta’s Industrial Heartland is a flagship global destination where companies can achieve both their economic and environmental goals,” said executive director Mark Plamondon.
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