Braya mulls shutdown of renewable diesel plant in Atlantic Canada

Braya Renewable Fuels is evaluating the possibility of an economic shutdown of its renewable diesel plant in Come By Chance, Newfoundland and Labrador, Canada.

“This evaluation is necessary due to lower-than-normal margins and short-term market disruptions caused by the expiration of the [U.S. biodiesel and renewable diesel] blenders tax credit (BTC),” said Paul Burton, Braya Renewable Fuels’ refinery manager, in a statement provided to Biobased Diesel Daily®.

The longstanding BTC is set to expire Dec. 31, 2024, and is expected to be replaced after two decades with the clean fuel production tax credit, commonly referred to as 45Z.

The 45Z credit, passed as part of the Inflation Reduction Act of 2022, is only available to domestic (U.S.) producers vs. the BTC, which is a blenders credit for which imported qualifying fuel is eligible.

The U.S. Department of the Treasury has yet to provide any substantive guidance on the 45Z credit other than urging producers to register in order to be eligible for the incentive.

This, coupled with the looming expiration of the BTC, has caused significant uncertainty in the biobased diesel markets.

The value of the new 45Z credit is expected to be either somewhat or significantly less than the $1-per-gallon BTC for many domestic biobased diesel producers eligible for the incentive.

“If temporary market conditions make it economically unfeasible to operate the plant, the processing of feedstock may be paused,” Burton said. “During this time, all equipment would be maintained in good condition and in a ready-to-start mode.”

Burton added that, while the timing of this possible economic shutdown is being reviewed, it could still be this year.

Across the country in British Columbia, Tidewater Renewables said in November that unfairly priced U.S. renewable diesel entering Canada was having a significant negative impact on the competitiveness of its domestic operations.

As a result, the company said it was preparing a trade case to curb the imports.

If the measure is not successful, Tidewater said its ability to continue operations would be in jeopardy.

If Braya temporarily shuts down its renewable diesel operations in Atlantic Canada, Burton said the refinery will retain its permanent workforce.

“As planned for several months, there will be layoffs of temporary workforce on Dec. 19,” Burton said, adding that this is unrelated to market conditions.

Braya currently has 230 permanent employees.

“We are supporting our workers during this transition,” he said.

Braya Renewable Fuels’ refinery conversion project was first announced in late 2021.

The plant, scaled at nearly 260 million gallons per year, began commercial operations in February 2024.