Dow to convert Alberta assets to create zero-carbon emission plant

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ALBERTA, Canada—Dow Inc. announced ambitious environmental goals Oct. 6, including plans to build the world’s first net-zero carbon emissions ethylene cracker in Canada.

Officials with Dow in Midland, Mich., made the announcements as part of the firm’s 2021 Investor Day event.

Dow will convert assets in Fort Saskatchewan, Alberta, to create a net-zero carbon emissions complex. These investments will decarbonize around 20 percent of Dow’s global ethylene capacity while growing its polyethylene resin supply by about 15 percent.

“Our company will be 125 years old next year, and we want to make sure we’re sustainable and viable for a long time,” Chairman and CEO Jim Fitterling said on an Oct. 6 video call with media.

New investments support Dow’s commitment to reduce its net annual carbon emissions by an additional 15 percent, meaning the firm will have reduced emissions by 30 percent between 2005-2030. Officials added that Dow is ready to scale near-term technology investments, including circular hydrogen and carbon capture and storage, and is also exploring investment in modular nuclear reactor technology.

Overall, Dow’s investment plans are expected to deliver more than $3 billion in additional EBITDA growth. Officials said these projects will allow Dow to grow more into end markets that are expected to grow at rates well above GDP, including packaging, infrastructure, consumer and mobility.

“Our global scale, differentiated product portfolio, low-cost position and advantaged feedstock flexibility collectively position us well to both decarbonize and grow, creating value for all our stakeholders,” Fitterling said in a news release.

Dow’s investments will include incremental capacity expansions in PE and functional polymers, additional capacity for high-margin polyurethane systems and isocyanates and capacity expansions in silicone polymers.

Longer-term investments for Dow include electric cracking, ethane dehydrogenation and advanced batteries.

Fitterling said on the media call that the net-zero cracker is using similar technology used in Dow’s major Texas-9 (TX-9) ethylene cracker in Freeport, Texas, but is being built in Canada because of a carbon pricing system and government support already in place there. The U.S. currently doesn’t have a carbon pricing system.

“We’ve been very open with the [U.S.] administration about what we’d like to see, which is a carbon emissions trading system like they have in Canada and 40 other countries,” Fitterling added.

The company also gave an update on current business conditions.

Dow’s shipments to U.S. customers are improving by rail, but truck deliveries remain challenged in the wake of multiple supply chain challenges, according to Fitterling, including recent hurricanes and an ice storm earlier this year. He said that Dow’s plastic products have been affected less than other products the company makes, and that the firm’s Louisiana production sites are recovering from the impact of Hurricane Ida in late August.

Global virgin resin demand is increasing, Fitterling added, as “2 billion people want to move into the middle class.”

“There’s pressure on non-essential, single-use plastics,” he said.

Dow ranks as one of the world’s largest producers of polyethylene, polyurethanes and other specialty plastics and chemicals. The firm employs almost 36,000 worldwide and posted sales of about $39 billion in 2020.