RE:Interesting: RD INCREASES RIN Supply & SUPPRESSES Ethanol RD in Canada: Market Snapshot: New Renewable Diesel Facilities Will Help Reduce Carbon Intensity of Fuels in Canada
Release date: 2023-05-03
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,Footnote1 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 intensityDefinition* 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% (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 and Description
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.
Table 1: Existing and planned renewable diesel facilities in Canada
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,Definition* cellulosic ethanol, synthetic fuels, and sustainable aviation fuel (SAF).Footnote2Definition* 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.Footnote3Definition*
What is renewable diesel?
Renewable diesel (HDRD/HVO)Footnote4 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,Definition* but its production process and properties are different. Biodiesel is manufactured by transesterificationDefinition* of vegetable oils and mineral fats. Renewable diesel is produced using a hydrogenationDefinition* 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.Footnote5 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.Footnote6Footnote7
Canada’s renewable diesel demand has been growing in recent years, reaching an estimated 9 Mb/d in 2021,Footnote8 or 1.6% of all diesel demand in the country, which to date has been provided exclusively through importsFootnote9 (Figure 2).
Figure 2: Conventional diesel, biodiesel, and renewable diesel demand in Canada
Sources and Description
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