New Dow Chemical Company Ethane Cracker Plant Set for Alberta, Canada
Aerial photograph of Dow’s manufacturing site in the Alberta Province of Canada
From an Article by Amy Baxter, Energy Environment Leader, December 1, 2023
Dow has approved the final investment decision for its Fort Saskatchewan, Canada, Path2Zero investment.
The project is the first net zero Scope 1 and 2 emissions-integrated ethylene cracker and derivatives facility in Alberta, Canada. The project comes at a cost of $6.5 billion, excluding governmental incentives and subsidies, and covers building a new ethylene cracker and increasing polyethylene capacity by 2 million metric tonnes per year. The project will also retrofit the site’s existing cracker to net zero Scope 1 and 2 emissions.
Dow expects the investment to deliver $1 billion of earnings before interest, taxes, depreciation, and amortization growth at full run rates over the economic cycle while providing 20% decarbonization of Dow’s global ethylene capacity. Ethylene is used widely in the chemical industry.
Dow expects to begin construction on the project in 2024, with the first capacity phase expected in 2027, adding approximately 1,285 metric kilotons per year of ethylene and polyethylene capacity. The second phase starting up in 2029 will add approximately 600 metric kilotons per year of capacity.
“The opportunity to decarbonize our assets while driving growth is central to Dow’s business strategy,” said Jim Fitterling, Dow chair and CEO. “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.”
Site to Aims for Net Zero Scope 1 and 2 Emissions
The Fort Saskatchewan Path2Zero project will deploy Linde’s air separation and autothermal reformer technology, which will convert the site’s cracker off-gas to hydrogen and achieve net zero Scope 1 and 2 emissions. Linde is a multinational chemical company.
The hydrogen can be used as a clean fuel that will supply the site’s furnaces. The project will also leverage carbon capture technology to store carbon emissions, reducing existing emissions by approximately 1 million metric tons a year of CO2.
According to Dow, when the project reaches full run rate it will be one of the company’s most cost-competitive sites in the world. Dow, which offers science-based products for plastics, coatings, and silicones businesses, operates manufacturing sites in 31 countries. The region of the project also offers access to existing carbon transportation and storage infrastructure with available capacity for the project.
Canada Offers Incentives for the Project
Dow received subsidies and incentives from the governments of Canada, Alberta, and Fort Saskatchewan to support the project, and it is the first project to access Canada’s new ITC program — a tax credit program for net-zero energy technologies and carbon capture and storage.
Dow will use roughly $2 billion of investment from third-party companies for circular hydrogen, CO2 capture, and other infrastructure assets as part of the project.
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