This article was published by the Canada Energy Regulator on May 3, 2023.
Seven new renewable diesel facilities are planned, or under construction, in Alberta, British Columbia, Quebec, and Newfoundland and Labrador. These facilities would add up to 70 thousand barrels per day (Mb/d), 4.07 billion litres per year (BL/yr) of production by 2027,(1) up from zero in 2020.
The implementation of the federal government’s 2020 Clean Fuel Regulations has been one of the main drivers in the development of renewable diesel production in Canada. The Clean Fuel Regulations, which were published in 20 June 2022, with compliance obligation beginning 1 July, 2023, require liquid fuel (gasoline, diesel, heating oil) suppliers to gradually reduce the carbon intensity of the fuels they produce and sell in Canada. Clean Fuel Regulation’s target is to decrease the carbon intensity of gasoline and diesel consumed predominantly in transportation in Canada by about 15 per cent (below the 2016 levels) by 2030. As Canada works to reduce its greenhouse gas (GHG) emissions, greater production of renewable diesel has the potential to reduce GHG emissions from the transportation of goods and people.
Figure 1: Existing and planned Canadian renewable diesel facilities
Table 1: Existing and planned renewable diesel facilities in Canada
|Facility||Capacity (Mb/d)||Capacity (Billion Litres/yr)||Start Up||Location||Province||Proponents||Notes|
|Burnaby Refinery||2.0||0.12||2021||Burnaby||BC||Parkland Energy||Coprocessing of canola and tallow biofeedstocks with crude oil.|
|Tidewater||3.0||0.17||Q1 2023||Prince George||BC||Tidewater Midstream and Infrastructure Ltd||A $200 million renewable diesel plant to be built in Prince George’s refinery. Expected to receive $100 million from BC government.|
|Covenant Energy||6.5||0.38||2024||Near Estevan||SK||Covenant Energy|
|Burnaby Refinery||3.5||0.20||2024||Burnaby||BC||Parkland Energy||Expansion of coprocessing biofeedstocks.|
|Braya Renewable Fuels||18.0||1.04||2024||Come-by-Chance||NL||Cresta Fund Management||Formerly Come-by-Chance refinery.|
|Strathcona Refinery||20.0||1.16||2025||Edmonton||AB||Imperial Oil||Renewable diesel plant to be built in Strathcona refinery.|
|Varennes Carbon Recycling||2.1||0.12||2025||Varennes||QC||Enerkem, Suncor, Shell, Proman|
|Co-op Refinery Complex||15.0||0.87||2027||Regina||SK||Federated Co-operatives Limited (FCL)||Renewable diesel plant to be built adjacent to FCL’s Regina refinery.|
In addition to the Clean Fuel Regulations published in June 2022, the Canadian government launched the $1.5 billion Clear Fuels Fund to de-risk the production of clean fuels in Canada such as hydrogen, renewable diesel, renewable natural gas, cellulosic ethanol, synthetic fuels, and sustainable aviation fuel (SAF).(2) British Columbia, Quebec, Alberta, Manitoba, Ontario, and Saskatchewan all either have a renewable fuel mandate, or a low carbon fuel standard which are supportive of renewable diesel and other biofuels.(3)
What is renewable diesel?
Renewable diesel (HDRD/HVO)(4) is a synthetic diesel manufactured from organic sources like animal fats and vegetable oils (canola, sunflower, soy). Renewable diesel uses the same raw materials as biodiesel, but its production process and properties are different. Biodiesel is manufactured by transesterification of vegetable oils and mineral fats. Renewable diesel is produced using a hydrogenation process like the process used for desulphurization of petroleum diesel. Because of this, existing petroleum refineries can be converted for renewable diesel. Renewable diesel is chemically similar compared to conventional diesel and can be transported and used like conventional diesel while biodiesel requires blending for use in diesel engines.(5) Biodiesel can only be added to diesel in limited quantities due to its tendency to congeal at low temperatures and remove existing deposits in fuel tanks and lines, leading to occasional filter plugging. Renewable diesel may also reduce net greenhouse gas emissions, when compared with conventional diesel.(6)(7)
Canada’s renewable diesel demand has been growing in recent years, reaching an estimated 9 Mb/d in 2021,(8) or 1.6 per cent of all diesel demand in the country, which to date has been provided exclusively through imports(9) (Figure 2).
Figure 2: Conventional diesel, biodiesel, and renewable diesel demand in Canada
- For comparison, Canadian production of diesel fuel in 2021 was 667 Mb/d. Statistics Canada. Table 25-10-0081-01. Petroleum products by supply and disposition, monthly 2023.
- NRCan, “Minister Wilkinson Announces up to $800 Million in Project Funding to Advance Canada’s Clean Fuels Sector,” November 14, 2022. Retrieved February 9, 2023.
- Government of Canada, “What are the Clean Fuel Regulations?” Retrieved 13 February 2022.
- Renewable diesel can be produced with various processes. Most current Canadian demand are hydrogenation-derived renewable diesel (HDRD) or Hydrotreated Vegetable Oil (HVO).
- NRCan, Biodiesel. 2020.
- EPA, Lifecycle Greenhouse Gas Results. 2022.
- NESTE, “Reduced Emissions,” Retrieved 10 February 2023.
- Navius Research, “Biofuels in Canada 2022”, October 27, 2022.
- United States Department of Agriculture (USDA), “Biofuels Annual – Canada” Global Agricultural Information Network (GAIN), March 4, 2022.