The Canada Infrastructure Bank (CIB) has concluded the financing on its first project from its low-carbon fuels, carbon capture utilization storage (CCUS) and hydrogen initiative with support for a biorefinery and the country’s largest electrolyzer.
Under the terms of the agreement, the CIB will provide a loan of $277 million to a joint-venture partnership between Shell, Suncor, Proman and the government of Québec that will enable construction of Canada’s largest biorefinery, based on a technology platform developed by Enerkem.
The $1.2 billion facility – known as Varennes Carbon Recycling – will include an electrolyzer which will supply clean hydrogen and oxygen to convert more than 200,000 tonnes of non-recyclable waste and residual biomass into biofuels with a capacity of up to 130 million litres annually.
“The Canada Infrastructure Bank is pleased to have acted quickly on its expanded role to support transformational efforts to accelerate Canada’s transition to a low-carbon economy,” said Ehren Cory, CEO of CIB. “Converting waste and residual biomass into clean hydrogen is the CIB’s latest effort helping the country reach net zero by 2050 and represents its first investment in low-carbon fuels.”
The project is expected to create more than 500 jobs at the peak of construction and about 100 permanent jobs once operational.
“The largest biorefinery in Canada will open its doors in Varennes, with the help of a loan from the Canada Infrastructure Bank. By supporting innovation here at home, the Canada Infrastructure Bank is giving Canada more tools to continue the fight against climate change, creating good jobs and generating wealth, here in Quebec,” said Pablo Rodriguez, Minister of Canadian Heritage and Quebec Lieutenant.
The CIB funding supports Quebec’s leadership in renewable energy and innovation and Canada’s aim to be net zero by 2050. The CIB loan aims to provide financing to a relatively emerging industry with upside.
The project will be using Enerkem’s proprietary thermochemical process. The carbon recycling facility is expected to cut more than 170,000 tonnes of greenhouse gas emissions annually and 4.25 million tonnes over the project’s 25-year lifespan. The annual reduction is equivalent to taking 50,000 passenger vehicles off the road.
“Clean fuels are an essential part of the clean technology mix in a net-zero world. While electrification will be a chosen route in some sectors, clean fuels will also play a very significant role going forward,” saidJonathan Wilkinson, Minister of Natural Resources
“Projects like this will accelerate important work to help Canada achieve its ambitious environmental and economic objectives – I look forward to continuing to work with the Canada Infrastructure Bank and private sector partners to produce the clean hydrogen the world needs.”
Construction has already begun, and commercial output is expected to start in 2025.
“We are pleased with the support of the CIB to Varennes Carbon Recycling that now combines the electrolyzer with the biorefinery into one single project. CIB’s participation enables this first-of-a-kind, fully commercial project, based on Enerkem’s waste to methanol technology platform. This sends a powerful signal to investors and the biofuels and circular chemicals sectors,” said Dominique Boies, CEO of Enerkem.
The CIB seeks to finance up to $5 billion into green infrastructure projects which are in the public interest and support Canadian sustainable economic growth.
Featured image: Artist’s rendering of the Varennes Carbon Recycling facility. (CNW Group/Canada Infrastructure Bank)
