New renewable diesel facilities will help reduce carbon intensity of fuels in Canada

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.

Greater production of renewable diesel has the potential to reduce GHG emissions from the transportation of goods and people in Canada. Reuters photo.

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

Sources: Alberta Farmer Express, Tidewater Midstream, Storage Terminals Magazine, Cresta Fund Management, Renewables Now, OGJ, CTV News, CBC News, Enerkem.
Description: This map shows the location of the planned renewable diesel plants in Canada. The size of the circles at each location indicates the capacity of each facility. The facilities included are the Burnaby refinery, Tidewater facility to be built near the St George refinery in BC, the Covenant energy plant near Estevan, SK, Braya Renewable Fules (formerly Come-by-Chance refinery), NL, an Imperial Oil new facility near the Strathcona refinery in Edmonton, AB, the Varennes Carbon Recycling facility in Quebec and a new facility near the Co-op Refinery Complex in Regina, SK.  To see an animated version of this graph, click here.

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 de-sulphurization 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

Sources: Navius Research, Statscan Tables 25-10-0044-01 and 25-10-0081-01.
Description: This line chart shows the estimated demand of renewable diesel (red), biodiesel (blue) and conventional diesel (black – right axis) in Canada, from 2010 to 2021 in Mb/d. Although diesel demand in Canada has been increasing very slowly, reaching 540 Mb/d in 2021, the renewable diesel demand has been increasing fast from almost zero in 2010 to 9.4 Mb/d in 2021. Biodiesel demand, after increasing from 2 Mb/d in 2010 to 7 Mb/d in 2013 has been hovering around 6.5 Mb/d since 2013.  To see an animated version of this graph, click here.

Footnotes

  1. 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.
  2. 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.
  3. Government of Canada, “What are the Clean Fuel Regulations?” Retrieved 13 February 2022.
  4. Renewable diesel can be produced with various processes. Most current Canadian demand are hydrogenation-derived renewable diesel (HDRD) or Hydrotreated Vegetable Oil (HVO).
  5. NRCan, Biodiesel. 2020.
  6. EPA, Lifecycle Greenhouse Gas Results. 2022.
  7. NESTE, “Reduced Emissions,” Retrieved 10 February 2023.
  8. Navius Research, “Biofuels in Canada 2022”, October 27, 2022.
  9. United States Department of Agriculture (USDA), “Biofuels Annual – Canada” Global Agricultural Information Network (GAIN), March 4, 2022.

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