Shell will have a 40% interest in a plant using technology developed by Enerkem, a leading Canadian clean tech company. Enerkem announced the project in December 2020, subject to finalization of commercial agreements.
Employees walking on site at Enerkem Alberta Biofuels (photo: Merle Prosofsky)
Commissioning of the first phase of the facility is scheduled for 2023. Critical investment in the plant comes from Shell, Enerkem, Suncor, Proman and Hydro-Québec, as well as from the Québec and Canadian governments.
“Building a commercial-scale low-carbon fuels plant is one of the ways Shell is advancing cleaner fuels and evolving to meet the changing expectations of our customers,” said Michael Crothers, Shell Canada President and Country Chair. “Canada is well suited to capitalize on the energy transition thanks to the ingenuity of Canadians and our willingness to work together. We’re grateful for the collaboration between industry and government that has been instrumental in making this project a reality.”
The approximately $875 million Varennes Carbon Recycling (VCR) will produce biofuels and renewable chemicals made from non-recyclable residual materials as well as wood waste. The plant will leverage green hydrogen and oxygen produced through electrolysis, transforming Quebec’s excess hydroelectricity capacity into value-added biofuels and renewable chemicals. VCR will be a major creator of quality local direct and indirect jobs during its construction and operation.
Dominique Boies, CEO and CFO, Enerkem said, “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.”
Enerkem’s technology enables the recycling of the carbon and hydrogen contained in non-recyclable waste and wood waste currently landfilled and burned. 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 consumption of traditional hydrocarbons used for transportation and in everyday products (paint, windshield washer fluid, plastics and chemicals of all kinds).
“The Varennes Carbon Recycling plant demonstrates our commitment and ability to use wastes as a feedstock to provide our customers with low carbon, high quality and affordable products,” added Crothers.
Shell has been a significant producer of ethanol as a low carbon fuel for the last ten years through Raízen, its joint venture in Brazil. Bioethanol is an effective way to reduce road transport emissions today, without the need to invest in new vehicles or infrastructure and already play a significant role in helping to decarbonize road transport in the Americas and in Europe.
In addition to diverting waste from landfill sites, the Varennes Carbon Recycling plant will expand the overall supply of alternative fuels and increase low-carbon fuels production in Quebec, accelerate greenhouse gas reduction in the transportation sector and increase Quebec's leadership in renewable energy and innovation.