The Infrastructure Bank invests $277 million in the Varennes biofuels plant
The Varennes biofuel plant is a joint venture project between Shell, Suncor Energy, Swiss natural gas company Proman and the Government of Quebec.
The Canada Infrastructure Bank is making its first low-carbon fuels investment by committing $277 million to a biofuels facility under construction in Varennes.
The facility, known as Recyclage Carbone Varennes, will cost a total of $1.2 billion. This is a joint venture project between Shell, Suncor Energy, Swiss natural gas company Proman and the Government of Quebec.
It is being built by Montreal-based Enerkem, whose proprietary technology will be used to produce biofuels and renewable chemicals from non-recyclable residual materials and forest biomass. The plant will also incorporate one of the largest electrolyzers in the world, which will split water molecules into oxygen and green hydrogen for use in its biofuel manufacturing process.
< p class="e-p">The project, which was first announced in 2020, will be the largest biofuel facility in the country when it is completed in 2025, according to the President and CEO of the Banque de l' ;Canada's infrastructure, Ehren Cory.
Construction work on the Varennes biofuel plant should be completed in 2025.
What attracted us to the project was its scale and ambition, first of all, he said .
“For us at BIC, this is our first investment in an area that I believe has enormous potential for our country. .
— Ehren Cory, President and CEO of the Canada Infrastructure Bank
Interest in biofuels has gained prominence recently. These fuels derived from renewable biomass, such as agricultural waste, food waste or even algae, can become an asset as companies look to reduce their greenhouse gas emissions.
Other projects of this kind are taking shape across the country. Imperial Oil plans to build a renewable diesel complex at its Strathcona refinery near Edmonton, and ATCOenergy plans to operate a renewable natural gas facility near Vegreville, Alberta.
In last year's federal budget, the Canada Infrastructure Bank, a federal Crown corporation, was given a mandate to include fuel production carbon dioxide capture and storage, and hydrogen generation in its existing clean energy and green infrastructure investment areas.
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I don't think the private sector is lagging behind or reluctant. We've actually seen a ton of interest from private sector players, large and small, across the country, Cory explained.
The challenge we see – and I think this is why the Canada Infrastructure Bank plays such an important role – is the level of risk and uncertainty that these projects still carry.
Recently, Parkland Fuel announced that it would not proceed with its plan to build a self-contained renewable diesel complex at its refinery in Burnaby, British Columbia, citing that the company could not compete with the financial incentives offered in the United States for renewable fuel installations.
Mr. Cory noted that there is also market risk and uncertainty about what kind of customers will pay for low-carbon fuels, and how carbon pricing schemes and carbon credits in different jurisdictions will influence this market.
We all know what 2050 will look like, but there is a lot of uncertainty about how to get there, asserted Mr Cory. This is where we can help.
He added that the CIB is seeking to fund up to $5 billion in green infrastructure projects, which should accelerate the deployment of these technologies by helping private sector developers reduce their risk.
The Varennes carbon recycling facility is expected to convert more than 200 000 tons of waste that cannot be recycled into biofuels, with a capacity of up to 130 million liters.
Project developers say the facility will reduce carbon emissions. greenhouse gas emissions of more than 170,000 tonnes per year, which is equivalent to removing 50,000 passenger vehicles from circulation.
