Dow announces green light for $11.5-billion net-zero facility in Alberta

Dow recently announced that its Board of Directors has approved the go-ahead for the company’s Path2Zero Project, which involves the construction of the world’s first net-zero Scope 1 and 2 emissions integrated ethylene cracker and derivatives facility at a brownfield site in Fort Saskatchewan, Alta.

The project, which includes a US$8.5 billion (CAD$11.5 billion) investment from Dow and partner companies (not including government subsidies and incentives) is expected to decarbonize 20 per cent of Dow’s global ethylene capacity while growing the company’s ability to meet growing customer demand in high-value markets such as packaging, infrastructure and hygiene, the company stated.

“The project serves as a leading example that industrial decarbonization is both possible and profitable,” said Jim Fitterling, Dow Chair and CEO. “The opportunity to decarbonize our assets while driving growth is central to Dow’s business strategy. All our stakeholders benefit from this investment – creating value for our customers and shareholders, new opportunities for our employees, economic growth for the community, and fewer greenhouse gas emissions for the environment.”

Construction is expected to begin in 2024. Capacity additions are expected to come online in phases, with the first phase starting up in 2027, adding approximately 1,285 KTAiv of ethylene and polyethylene capacity, and the second phase starting up in 2029, adding an additional approximately 600 KTA of capacity, the company stated.

“This investment paves the way for growth of our entire Packaging and Specialty Plastics portfolio. It gives us the opportunity to become the industry’s first provider of zero-emissions products and solutions,” said Karen Carter, Dow president, Packaging & Specialty Plastics. “Our commitment to innovation and designing products for circularity allows us to meet the evolving needs of our customers across growing sectors such as packaging, infrastructure, and hygiene, among others.

“Plastics have long been recognized for their environmental advantages, with a greenhouse gas footprint that is typically less than half of alternative materials. With this strategic investment and our commitment to transform plastic waste to create circular and renewable solutions, we are poised to achieve even greater reductions in emissions, empowering our customers to make significant strides in their sustainability efforts.”

Dow stated that the decision to select the Fort Saskatchewan site stemmed from Western Canada offering “highly cost-competitive natural gas relative to other regions, as well as cost-advantaged ethane, a key feedstock for ethylene production.”

The Government of Alberta stated that the project would create about 6,000 jobs during construction, while the Government of Canada estimated upwards of 8,000 construction jobs at peak time. Both governments stated that the new facility would create 400 to 500 full-time jobs once it is operational.

“This investment by Dow is further evidence of the opportunity that exists in Alberta,” stated Premier of Alberta Danielle Smith. “We are proud that Dow has chosen to build and launch their project here. This project does not just mean net-zero emissions, it means more jobs and a stronger economy. I look forward to the next steps, including construction starting next year.”

The project will receive significant federal and provincial funding including approximately $1.8 billion from the Energy and Minerals’ Alberta Petrochemicals Incentive Program (APIP).

“APIP has been doing exactly what it was designed to do, attract investment. And because it’s working, Alberta can look forward to thousands of construction jobs and hundreds of permanent positions through Dow’s investment,” Smith stated. “It is another step forward in expanding Alberta’s diversified energy economy as we do more with our resources and add value to them. And it’s further proof of our province’s determination to reach carbon-neutral status by 2050.”

The Dow project will be the first to access Canada’s new Investment Tax Credit (ITC) program. The Government of Canada stated that Dow will be supported by upwards of $400 million from Canada’s ITC program for the implementation of new clean technologies at the Fort Saskatchewan facility, including its carbon capture, utilization, and storage (CCUS) technology; and enhancements in its operations to produce clean hydrogen, which will be used as a clean fuel supply for the site’s furnaces.

“When we announced our major investment tax credits – a pillar of our government’s economic plan – we said that they would attract new investment and create great careers for Canadians. With hundreds of new Canadian jobs on the way, today’s investment by Dow in Fort Saskatchewan is proof that our economic plan is delivering for Canadians,” stated Deputy Prime Minister and Minister of Finance Chrystia Freeland.

The Government of Canada and Dow stated the combined technologies will reduce emissions by approximately 1 million metric tonnes of CO₂e per year by converting hydrogen from cracker off-gas as a clean fuel as well as CO₂ capture and storage.

Dow stated that its investment leverages approximately $2 billion of investment from third-party companies for circular hydrogen, CO₂ capture, and other infrastructure assets critical to the project execution.

Multiple suppliers have already been selected for the massive project. Linde has been selected as Dow’s industrial gas partner for the supply of clean hydrogen and nitrogen for the site, and Fluor was selected for front-end engineering and design. Dow stated that it is also partnering with Wolf Midstream to provide CO₂ transportation along the Alberta trunk line, and with Ravago, which will provide third-party logistics for finished products from the site.

“This project will have a profound positive impact on our employees and the community, creating jobs and economic opportunity while positioning the region to be a leader in low emissions manufacturing,” stated Diego Ordonez, Dow Canada President. “Our collaboration with government officials, the community of Fort Saskatchewan, our Indigenous neighbours, and the host of partner companies involved has been key to enabling this investment to move forward.”