Enerkem Inc. a leading waste to renewable fuels and chemicals producer together with a group of strategic partners that includes major investor Shell Canada, along with Suncor Energy Inc., Proman AG, and Hydro-Québec and with the support of the Québec and Canadian governments, has announced the proposed construction of Varennes Carbon Recycling (VCR), a major waste-to-fuels biorefinery in Varennes, in the Greater Montréal area. The project is subject to the finalization of commercial agreements.
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On December 8, 2020, Catherine McKenna, Canada’s Minister of Infrastructure and Communities, Mélanie Joly, Minister of Economic Development and Official Languages, Jonatan Julien, Minister of Energy and Natural Resources (NRCan), Pablo Rodriguez, Leader of the Government in the House of Commons, Québec Premier François Legault, Quebec Lieutenant, Pierre Fitzgibbon, Minister of Economy and Innovation, and the Mayor of Varennes, Martin Damphousse, announced a joint investment of more than CA$230 million for the design and construction of a cellulosic biorefinery in Varennes, Québec.
The proposed CA$875 million Varennes Carbon Recycling (VCR) biorefinery project will produce biofuels such as cellulosic ethanol and renewable chemicals such as methanol, made from non-recyclable residual materials as well as wood waste and will leverage green hydrogen and oxygen produced by Hydro-Québec through electrolysis of water.
The Varennes cellulosic biofuel plant will turn waste into fuel, support cutting-edge Canadian technology, and help ensure cleaner air for our children and grandchildren. This project, supported by a federal investment of CA$74 million, will help tackle climate change by reducing greenhouse gas emissions equivalent to taking 50 000 cars off the road every year while creating good jobs. Canada’s infrastructure plan invests in thousands of projects, creates jobs across the country, and builds cleaner, more inclusive communities, said Catherine McKenna, Minister of Infrastructure and Communities.
The Government of Canada is investing CA$70 million through the Investing in Canada Infrastructure Program and over CA$4 million from Canada Economic Development in the VCR project. The Government of Québec is contributing more than CA$160 million to the project.
Our investment in this project will strengthen not only an innovative business established here in Québec but also our leadership in green technologies. Reducing CO2 emissions by 170 000 tonnes a year means more wealth and less greenhouse gas emissions. We are facing major challenges ahead to restart the economy, but we must take advantage of industries that are the way of the future. We must build a greener and more prosperous Québec. A prouder Québec! said François Legault, Premier of Québec.
Use excess hydropower
Additional investments of more than CA$379 million will come from Varennes Cellulosic Ethanol L.P., which is supported financially by major strategic partners, including Shell Canada Products, Suncor Energy, Proman, and Enerkem, the company that developed the innovative technology to be used in Varennes.
We are proud to partner with leading international energy and chemical industry players and to benefit from the support of our federal and provincial governments and the City of Varennes. This strong support validates the uniqueness of our gasification technology to enable the production of circular synthesis gas. It is a major achievement for Enerkem to have its second full-scale commercial plant become a reality, showcasing our unique clean disruptive technology that transforms waste-to-biofuels and renewable chemicals. We have learned a great deal from our initial pilot project in Westbury, Québec, and our first commercial demonstration plant in Edmonton, Alberta, said Dominique Boies, CEO, and CFO, Enerkem.
The proposed project also includes the construction of one of the world’s largest renewable hydrogen and oxygen production facilities with an 87 MW electrolyzer leveraging on Québec’s excess green hydroelectricity capacity.
To be built on an adjacent site to the VCR facility, the hydrogen produced will be used as the gasification agent at the biorefinery. The electrolyzer will require an investment of about CA$200 million from Hydro-Québec, which will be the sole shareholder.
The plant will generate some 11 100 tonnes of hydrogen and 88 000 tonnes of oxygen annually.
Thanks to our fleet of over 60 hydroelectric generating stations with a total output of 36 700 MW, the power produced by Hydro-Québec is over 99 percent clean. This puts Québec in a prime position to take on a leading role in the production of green hydrogen, said Sophie Brochu, President and CEO, Hydro-Québec.
At full capacity, the VCR plant will convert around 200 000 tonnes of non-recyclable waste and wood waste into an annual production of nearly 125 million litres of low-carbon-intensive biofuels by diverting these materials from landfills.
Shell Canada is delighted with the proposed partnership with Enerkem, a leading Canadian cleantech company, and we see this as a step forward towards a net-zero emissions future. By converting non-recyclable waste and wood waste to low-carbon fuels, we can reduce the carbon footprint of energy used by Canadians every day. We are grateful for the collaboration with the Government of Québec, the Government of Canada, and our prospective partners, and hope to develop other projects with Enerkem in the future, said Michael Crothers, Shell Canada President and Country Chair.
Leveraging on proprietary technology
Enerkem’s technology enables the recycling of the carbon and hydrogen contained in non-recyclable waste and wood waste currently landfilled and burned, and according to Enerkem, is why the company was able to bring together world-class global strategic partners who intend to take a leading investment role in this flagship facility of the green economy.
We’re excited to continue our journey with Enerkem, another example of our ongoing commitment to sustainability. Over the last few years, we’ve worked together to help ramp up the Enerkem Alberta Biofuels plant, and now looking to Varennes, we’re excited to progress the production of biofuels domestically and internationally. Suncor has a long history in the Montréal area dating back to 1919 and this kind of innovative technology will help us play a role in the future low-carbon economy for many more years to come, said Martha Hall Findlay, Chief Sustainability Officer, Suncor Energy.
Enerkem’s proprietary thermochemical process enables the conversion of this carbon into biofuels and renewable chemicals, made from methanol, which is the project’s intermediary product.
These products enable society to reduce the consumption of traditional hydrocarbons used for transportation and in everyday products such as paint, windshield washer fluid, plastics, and chemicals of all kinds.
As the world’s second-largest methanol producer, Proman is excited at the prospect to team up with such distinguished partners on this proposed waste-to-methanol and biofuels project. The further implementation of Enerkem’s unique waste gasification technology will be a significant step towards enabling the wider availability of highly sustainable bio-methanol, as part of the global low-carbon energy transition. We are thankful to Enerkem and the other potential partners for giving us the opportunity to bring Proman’s extensive industry experience and marketing expertise in support of this flagship circular economy project, and especially want to thank the Québec and Canadian governments for their commitment to this innovative project, said David Cassidy, Chief Executive, Proman.
Supports circular economy
The proposed VCR plant will support Québec’s Plan pour une économie verte 2030 (PEV 2030), Québec’s energy policy, and is in line with the government’s desire to pursue the development of a circular economy less dependent on fossil fuel products – 40 percent reduction by 2030.
In addition to providing second life to waste material, it will expand the overall supply of alternative fuels and increase biofuel production in Québec increasing its leadership in renewable energy and innovation.
The project is estimated to lead to the creation of more than 500 jobs during construction and about 100 permanent direct skilled jobs during operations and bring CA$85 million in annual recurring economic benefits for Québec.
Some CA$60 million has been invested since August 2019 to develop the project, prepare the site, and obtain the required permits. The proposed partnership is subject to the finalization of commercial agreements.
