Delivers 2 million MTA of organic growth in attractive, high-end markets while decarbonizing 20% of Dow's global ethylene capacity
Dow announced that its board of directors has declared final investment decision on the company's Fort Saskatchewan Path2Zero investment to build the world's first net-zero Scope 1 and 2 emissions integrated ethylene cracker and derivatives facility in Alberta, Canada.
The $6.5 billion project, excluding governmental incentives and subsidies, includes building a new ethylene cracker and increasing polyethylene capacity by 2 million MTA as well as retrofitting the site's existing cracker to net-zero Scope 1 and 2 emissions. The investment is expected to deliver $1 billion of EBITDA growth per year at full run rates over the economic cycle while decarbonizing 20% of Dow's global ethylene capacity.
This 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. T
The project builds on Dow's expertise in successfully implementing large projects, such as its TX-9 cracker in Freeport, Texas, which has delivered more than 15% return on invested capital since its 2017 start-up through best-in-class capital intensity, conversion cost, and low emissions intensity.
Jim Fitterling, Dow Chair and CEO, said: "The project serves as a leading example that industrial decarbonization is both possible and profitable."
"The opportunity to decarbonize our assets while driving growth is central to Dow's business strategy. All our stakeholders benefit from this investment – creating value for our customers and shareholders, new opportunities for our employees, economic growth for the community, and fewer greenhouse gas emissions for the environment."
The board's approval enables the company to begin construction in 2024. Capacity additions are expected to come online in phases, with the first phase starting up in 2027, adding approximately 1,285 KTA of ethylene and polyethylene capacity, and the second phase starting up in 2029, adding an additional approximately 600 KTA of capacity.
Karen S. Carter, Dow President, Packaging & Specialty Plastics, adds: "This investment paves the way for growth of our entire Packaging and Specialty Plastics portfolio. It gives us the opportunity to become the industry's first provider of zero-emissions products and solutions. Our commitment to innovation and designing products for circularity allows us to meet the evolving needs of our customers across growing sectors such as packaging, infrastructure, and hygiene, among others."
"Plastics have long been recognized for their environmental advantages, with a greenhouse gas footprint that is typically less than half of alternative materials. With this strategic investment and our commitment to transform plastic waste to create circular and renewable solutions, we are poised to achieve even greater reductions in emissions, empowering our customers to make significant strides in their sustainability efforts."
To achieve net-zero Scope 1 and 2 emissions, the Fort Saskatchewan Path2Zero project will deploy Linde's air separation and autothermal reformer technology to convert the site's cracker off-gas to hydrogen, which will be used as a clean fuel to supply the site's furnaces. In addition, carbon dioxide emissions will be captured and stored, reducing existing emissions by approximately 1 million MTA of CO2e while abating all emissions from the addition of the site's new capacity.
Diego Ordonez, Dow Canada President, says: "This project will have a profound positive impact on our employees and the community, creating jobs and economic opportunity while positioning the region to be a leader in low emissions manufacturing. Our collaboration with government officials, the community of Fort Saskatchewan, our Indigenous neighbors, and the host of partner companies involved has been key to enabling this investment to move forward."
Danielle Smith, Premier of Alberta, says: "This investment by Dow is further evidence of the opportunity that exists in Alberta. We are proud that Dow has chosen to build and launch their project here. This project does not just mean net-zero emissions, it means more jobs and a stronger economy. I look forward to the next steps, including construction starting next year."
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