ExxonMobil's Imperial Oil plans Canadian renewable diesel project

ExxonMobil is moving further into the renewable fuels space after its Canadian affiliate Imperial Oil advanced plans to build a 20,000 b/d renewable diesel complex on the site of its existing 200,000 b/d Strathcona refinery in Edmonton, Alberta.

The Aug. 25 announcement of the project precedes Canada's Clean Air Fuel Standard, which goes in effect in 2022 and requires refiners and other obligated parties to reduce in annual increments carbon intensity levels in liquid transportation fuels from 2016 levels.

Contingent on the final investment decision, the new Strathcona renewable diesel facility was expected online in 2024, and will use locally grown plant-based feedstock and hydrogen with carbon capture and storage as part of the manufacturing process.

"Canada's proposed low-carbon fuel policies incentivize the development of lower-emission fuels that can make meaningful contributions to the hard-to-decarbonize sectors of the economy, including transportation," Ian Carr, president of ExxonMobil Fuels & Lubricants Company, said in the statement.

The project will use blue hydrogen produced by natural gas with carbon capture and storage, Carr said, which will further reduce emissions from the project.

"Approximately 500,000 mt of CO2 are expected to be captured each year utilizing CCS. The blue hydrogen and biofeedstock will be combined with a proprietary catalyst to produce premium low-carbon diesel fuel," Carr said.

Imperial is still evaluating feedstock options for the project, a company spokesperson had said Aug. 24.

However, the plant's location in Alberta gives it easy access to abundant stocks of locally grown canola, soybeans and camelina -- all of which can be used as feedstock to produce renewable diesel to help Imperial comply with the country's more stringent emissions laws which come into force in 2022.

Canada's CFS standard looms

Canada's Clean Fuel Standard mandates parties, such as refiners, reduce their carbon-intensity levels in liquid transportation fuels from 2016 levels, starting with a 2.4 gCO2e/MJ reduction in 2022 and increasing to a 12 gCO2e/MJ reduction by 2030.

Carbon intensity is the measure of greenhouse gas emissions from transportation fuels and expressed in grams of carbon dioxide equivalent per megajoule of energy.

Under Canada's Clean Fuel Standard, there are three compliance categories under which a refiner can make credits. First, refiners can create projects that reduce the life cycle carbon intensity of fossil fuels, including carbon capture and storage, on-site renewable energy and co-processing renewable feedstocks.

The second involves supplying customers with low-carbon fuels, such as ethanol, biodiesel and other renewable fuels. And, the third category includes investing in advanced vehicle technology, such as electric or hydrogen fuel cell vehicles.

The Strathcona project is part of parent ExxonMobil's plan to provide more than 40,000 b/d of low-emissions fuels by 2025.

In April, ExxonMobil inked a deal with Global Clean Energy to be the exclusive buyer of renewable diesel from the Bakersfield refinery when it comes online in early 2022, purchasing up to 5 million barrels per year, doubling its initial offtake agreement. The Bakersfield plant will use a process developed to use camelina as a feedstock, a process which could be adapted to the Strathcona facility.

Earlier this year, ExxonMobil created a new business unit called ExxonMobil Low Carbon Solutions to commercialize low-emissions technologies, including CCS, biofuels and hydrogen.

In June, Imperial announced its participation as a founding member of the Oil Sands Pathways to Net Zero Alliance.

The alliance's goal is to achieve net-zero greenhouse emissions from oil sands operations by 2050 -- helping Canada meet its climate goals, including its Paris Agreement commitments and 2050 net-zero goals, according to ExxonMobil's statement.