In Canada, Covenant Energy Ltd, a Saskatchewan (SK)-based renewable fuel innovator, has provided an update on its planned renewable diesel facility which is to be constructed in southern Saskatchewan. According to the company, the announcement comes as a response to the draft Clean Fuel Regulations announced in December 2020, and the Government of Canada's commitments to attain net-zero emissions.
Founded in 2019, Covenant Energy is planning the first stand-alone Hydrogenation-Derived Renewable Diesel (HDRD) plant, 6 500 barrels per day, 300 – 325 million litres per annum, biorefinery in southern Saskatchewan. Using canola (rapeseed) as feedstock, the biorefinery is anticipated to produce renewable diesel, arctic-grade renewable diesel, and sustainable aviation fuel (SAF).
According to a statement, the company has completed initial pre-front end engineering design (FEED), engineering and feedstock studies, as well as marketing, demand, and pricing study. Provided the project receives all the necessary approvals, it is slated to start production in the second half of 2023.
While this project is advancing, Covenant Energy highlights that the right demand signal for clean fuels is imperative for the approval of this renewable diesel facility. The federal government’s Clean Fuel Regulations, published as a draft in December 2020, would be the key driver of demand for this project and is critical for its success.
Planned with the future in mind, the current design would enable Covenant Energy to invest in doubling the facility production capacity at a later time.
This renewable fuel processing plant would drive demand for approximately 80 percent of the oil production capacity of a new one million tonne per year canola crushing facility, creating the opportunity for a new crush facility to co-locate with Covenant Energy.
Finally, while the ambition is to use predominantly Canadian canola oil as the feedstock and ship renewable fuels throughout Canada and Canada’s northern communities, Covenant’s proposed location will be situated on a Class 1 railway, giving the ultimate flexibility to access feedstock from across Canada and the United States (US), as well as providing the potential to sell product into the American market.
Covenant Energy is eager to be a part of attaining Canada’s environmental sustainability and net-zero commitments in a way that will stimulate the Saskatchewan economy. Personally, being deeply rooted in the Ag industry as a member of a fifth-generation Saskatchewan farming family with over 13,000 acres of production, I see the positive future impact and I am excited about bringing value-added opportunities. We are also excited to explore a partnership with the oil and gas industry through fuel blending to bring longevity and diversity to a region that traditionally produces other fossil fuels, said Josh Gustafson, President, and CEO, Covenant Energy.