Daily Management Review

U.S Refiners Eye Under-Tapped Renewable Diesel Market Of Canada


10/12/2020


Renewable diesel as well as biodiesel have nearly fifty to eighty percent less carbon footprint in comparison to conventional diesel.



The refineries are making aggressive move to come out with “renewable diesel”. To some extent the reason behind the same could be to tap into the “greener fuel standard” of Canada before the refiners of Canada “modify their own plants”.
 
The prime minister of Canada, Justin Trudeau has plans of introducing “Clean Fuel Standard” this year with the aim of reducing “30 million tonnes of emissions by 2030”. Renewable oil is made by processing wasted “cooking oil, canola oil or animal fats” which are used in “conventional diesel engines” either in “high concentrations or without blending”.
 
Till now, the companies of Canadian origin only made public announcements of “three projects” involved in generating the fuel. On the other hand, minimum five “U.S. refiners” have revealed their plans of producing “renewable diesel”. According to the President of the “Advanced Biofuels Canada industry group”, Ian Thomson:
“This is Canada’s to lose. If Canada’s refiners want to get left out of the game, they will dig their heels in and oppose the standard. Meanwhile, the Americans will build.”
 
Morgan Stanley proclaimed renewable diesel to be a niche market product which only replaces “0.5%” of the annual “430-billion gallon” of the diesel market across the world. Moreover, renewable diesel as well as biodiesel have nearly fifty to eighty percent less carbon footprint in comparison to conventional diesel. While, Reuters reported:
“U.S. states such as Colorado and Washington are moving toward such standards and along with Canada’s fuel standard, a sufficient market is developing, said HollyFrontier executive Tom Creery, on the company’s second-quarter earnings call”.
 
In the words of the chief sustainable officer at Suncor Energy Inc, the second biggest oil manufacturer of Canada, Martha Hall Findlay:
“The timelines would force investment in facilities outside Canada because of the sheer fact that we can’t build them that fast. That seems a little backward.”
 
While, the senior vice-president of Parkland Fuel Corp, Ryan Krogmeier:
“There’s a tremendous opportunity for Canada to harness its natural resources. The market for renewable fuels is really taking off.”
 
 
 
References:
reuters.com