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  • Writer's pictureRon Kotrba

Alberta grants Imperial conditional approval of CAD$70 million tax credit for Strathcona renewable diesel project

The provincial government of Alberta has granted Imperial conditional approval for a tax credit estimated at about CAD$70 million (USD$51.1 million) for its CAD$720 million (USD$525.6 million) project to build the largest renewable diesel facility in Canada.


The new facility at the Strathcona refinery is expected to produce more than 1 billion liters (264 million gallons) of renewable diesel per year, or 20,000 barrels (840,000 gallons) per day.


Construction on the new facility is already underway.


When production begins in 2025, Imperial’s new facility will convert locally sourced biobased feedstocks like canola oil into lower-emission renewable diesel, creating new demand for Alberta producers.


The conditional approval of the incentive has been granted by the Alberta government under the Agri-Processing Investment Tax Credit.


To be considered for the tax-credit program, corporations must invest at least CAD$10 million (USD$7.3 million) in a project to build or expand a value-added agri-processing facility in Alberta.


The program offers a 12 percent nonrefundable tax credit base on eligible capital expenditures.


Alberta’s government introduced the program in spring 2023 to support economic growth and diversification.


The tax credit is attracting large-scale investment in value-added manufacturing, according to the Alberta government.


“Our Agri-Processing Investment Tax Credit program builds on other competitive tax advantages that encourage corporations like Imperial to invest in our province, create jobs and make an economic impact,” said RJ Sigurdson, the minister of agriculture and irrigation.


Imperial’s renewable diesel facility is the first of its kind in Alberta and will put the province on the map as a significant producer within Canada, the provincial government noted.


It also contributes to Alberta’s goal of lowering emissions as renewable diesel has potential to reduce annual greenhouse-gas emissions by about 3 million metric tons compared with conventional fuels.


“This incredible project demonstrates that our province is becoming a world leader in alternative fuels and energy innovation,” said Brian Jean, the minister of energy and minerals. “Renewable diesel has great potential and is a welcome addition to our energy mix, which includes hydrogen and renewables.”


Sherri Evers, Imperial’s senior vice president of sustainability, commercial development and product solutions, added, “Imperial’s renewable diesel facility will provide an important new lower-emission offering to Canada’s transportation sector. We are excited that the main source of feedstock for the facility will be from crops in Western Canada and thank the government of Alberta for their recognition of the project’s benefits to the agricultural industry and our collective greenhouse-gas emissions-reduction goals.” 


Chris Vervaet, the executive director of the Canadian Oilseed Processors Association, said, “We are excited to see this investment being made in Alberta’s canola country. Local production of renewable fuels derived from locally grown canola provides an important market diversification opportunity right here in our own backyard that will benefit farmers, processors and the entire value chain in the province of Alberta.”


The canola industry is estimated to contribute CAD$8 billion (USD$5.84 billion) per year to Alberta’s economy, supporting 65,000 jobs in the province.


Canola is Alberta’s highest-value crop with farm cash receipts worth CAD$3.9 billion (USD$2.85 billion) in 2023.


In 2023, Alberta produced almost 30 percent of Canada’s canola at 5.4 million tons.


There are four canola-processing facilities in Alberta, representing a combined capacity to process more than half of the canola produced in the province today.


Oilseed processing is growing in Canada with processing capacity expanding by 40 percent over the past decade.


Since 2012, crush capacity more than doubled, reaching 11.1 million tons for canola and 3.2 million tons for soybeans in 2021.


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