Parkland Fuels is committing $600 million, most of it from tax credits earned by meeting B.C.’s low-carbon fuel standard, to expand its capacity to make diesel fuel from canola oil and other renewable sources at its Burnaby refinery.
Energy Minister Bruce Ralston and Parkland CEO Bob Espey announced the project at the B.C. legislature May 9, to increase biodiesel production at B.C.’s largest remaining refinery from about 50 million litres a year to 700 million. Renewable fuels are mixed with conventional diesel or gasoline to reduce carbon dioxide emissions, and producers receive a tax credit for fuels below the province’s “carbon intensity” target, and debits for producing fuel above the standard.
What biofuels won’t do is reduce the cost to consumers. Espey said a litre of biodiesel costs three to four times as much to produce as a litre of conventional diesel from crude oil. Parkland uses canola oil and animal fats to produce biodiesel at Burnaby.
B.C.’s low-carbon fuel standard was introduced in 2008 by former premier Gordon Campbell’s government, along with the rising carbon tax on fuels. Espey said Parkland’s refinery has accumulated $400 million from its existing biofuel production, and is reinvesting that and another $200 million in the expansion project.
Ralston also introduced changes to B.C.’s low-carbon fuel standard in the legislature Monday, which he said will modernize the law and expand it to cover more fuels, including aviation fuels. The changes will also give the province the ability to issue tax credits for capturing carbon dioxide directly from the air.
In October 2021, Ralston announced a $2 million grant from the province’s clean energy fund for a carbon capture facility in Merritt. Carbon Engineering, which operates a CO2 capture pilot project at Squamish, is a partner in the venture with Huron Clean Energy, a new company established in 2019 to develop “air to fuels” plants.