(Reuters) â Dow (DOW.N)Â said on Tuesday its board approved an investment in the $6.5 billion Fort Saskatchewan Path2Zero project in Alberta, Canada, as the chemical maker aims to become carbon neutral by 2050.
The project includes building a new ethylene cracker and increasing polyethylene capacity by 2 million metric tonnes per annum.
Dow said the investment in the net-zero emissions facility is expected to deliver growth of $1 billion of core profit per year at full run rates.
The company plans to begin construction in 2024. Capacity additions are expected to come online in phases, with the first starting up in 2027 and would add around 1,285 kilo tonnes per annum (KTA) of ethylene and polyethylene capacity.
The second phase, starting up in 2029, would add an additional 600 KTA of capacity.
âThis new capacity will enable Dow to capture growing customer demand in high-value markets, such as packaging, infrastructure and hygiene, among others, with potential additional value captured from commercializing low and zero-emissions products,â the company added.
Dow had said it aims to reduce its net annual carbon emissions by 15% by 2030 compared with its 2020 baseline, and expects to be carbon neutral by 2050.
The company had signed a long-term supply agreement earlier this year with bio-conversion company New Energy Blue for plastic materials made from corn residue, as part of a move towards renewable energy sources for production.
Dow Path2Zero investment in Alberta: Joint statement
Premier Danielle Smith, Minister of Energy and Minerals Brian Jean and Minister of Jobs, Economy and Trade Matt Jones issued the following statement on the Dow Path2Zero Fort Saskatchewan project:
âWe are thrilled that Dow has chosen Alberta for the worldâs first net-zero Scope 1 and 2 greenhouse gas emissions integrated ethylene cracker and derivatives site.
âFort Saskatchewan Path2Zero, located in Albertaâs Industrial Heartland, will play an important role in expanding Albertaâs natural gas industry, creating thousands of jobs, diversifying our economy and positioning our province as a global hub for petrochemicals.
âAt nearly $9 billion, this project is one of the largest private sector investments in Albertaâs history. At peak, this world-class petrochemical facility will create about 6,000 jobs during construction and 400 to 500 full-time jobs when operational. Path2Zero will produce and supply approximately three million metric tonnes of certified low- to zero-carbon emissions polyethylene and ethylene derivatives for customers around the globe while further establishing Alberta as a world leader in emissions-reducing technology like carbon capture, utilization and storage.
âThis announcement by Dow is indicative of Albertaâs commitment to attracting investment and creating good jobs while growing and diversifying our economy. Programs like Energy and Mineralsâ Alberta Petrochemicals Incentive Program (APIP) and the cross-ministry concierge investment support led by Jobs, Economy and Trade have been integral in Dowâs decision to choose Alberta for this innovative facility. Through APIP, we are issuing a 12 per cent grant, which is approximately $1.8 billion, to help move this investment and technology forward. In addition, we are pleased that Albertaâs skilled workforce, low corporate tax rates, stable industrial carbon pricing system and commitment to support innovation made Alberta the most attractive choice.
âDowâs final investment decision is proof of the Alberta Advantage, and it will be a major stepping-stone toward meeting our goal of being a global top 10 petrochemical producer. This decision proves what we have been saying for years: Alberta is the best place to invest and do business. We have the workforce, know-how and natural gas feedstock to be a world leader in carbon-neutral petrochemicals.
âThis is a huge win for Albertaâs petrochemical sector and clearly demonstrates our business-friendly policies are attracting job-creating investment across the province. We look forward to the beginning of construction in 2024 and are proud to be partnering with Dow to transition away from emissions while decarbonizing petrochemical products and growing our energy industry.â
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