U.S. oil refineries, with shorter regulatory deadlines than their Canadian counterparts, are struggling to produce renewable diesel to take advantage of Canada’s greener fuel standard before its own refineries are able to modify their plants to make them themselves.
The government of Canadian Prime Minister Justin Trudeau plans to announce its clean fuel standard by the end of this year, with the ultimate goal of cutting 30 million tonnes of emissions by 2030, Reuters reported.
But only three projects have been publicly announced in Canada to manufacture the fuel, according to Ian Thomson, president of the Advanced Biofuels Canada industry group.
BP WILL TAKE UP TO $ 17.5B WRITTEN, REDUCE OIL OUTLOOK
Meanwhile, at least five US refineries have publicly announced their plans to produce renewable diesel or have said they will consider the option. This includes Phillips 66 and HollyFrontier Corp.
|PSX||PHILLIPS 66||51,06||+0,78||+ 1,55%|
|HFC||HOLLYFRONTIER CORP||19,60||+0,66||+ 3,48%|
“This is Canada to lose,” Thomson told Reuters. “If Canada’s refiners want to be excluded from the game, they will put their feet on the ground and oppose the standard. Meanwhile, the Americans will be building.
SHELL BENEFITS DIP 82% WHEN PANDEMIC HITS DEMAND
Renewable diesel is produced by processing used cooking oil, canola oil or animal fat. It can be used in high concentrations or without mixing in conventional diesel engines. Part of a niche market, it accounts for just 0.5% of the world’s 430 billion gallon per year diesel market, according to Morgan Stanley.
But it is valued for its environmental benefit, given that the greenhouse gas emissions of renewable diesel and traditional biodiesel are about 50% to 80% lower than those of conventional diesel, according to Reuters.
The pandemic has also slowed plans by Suncor Energy Inc., Canada’s second-largest oil producer, to open a renewable diesel plant in Montreal, and other Canadian companies face longer regulatory delays than their counterparts. Americans, said Martha Hall Findlay, director of sustainability.
GET FOX BUSINESS ON THE ROAD BY CLICKING HERE
“The timelines would force investing in facilities outside of Canada just because we can’t build them that quickly,” said Hall Findlay. “It seems a bit backwards. ”
CLICK HERE TO LEARN MORE ABOUT FOX BUSINESS