Indigenous group plans $451 million biofuel refinery in Canada

Canola field Source: iStock

An Alberta-based Indigenous group and local first nation plan to build a C$600 million ($451 million) sustainable aviation fuel refinery to supply Calgary International Airport in an effort by Indigenous communities to capitalize on Canada’s push to reduce emissions. 

Reconciliation Energy Transition Inc. and the Siksika Nation’s planned refinery would produce 6,500 barrels a day of fuel from canola grown on a million acres of land, much of it Indigenous-owned, Steve Mason, senior managing director of Reconciliation, said by phone. 

The partnership would own at least 60 per cent of the refinery and is in discussions with outside, mostly agricultural companies to sell most of the remaining stake. The project would be financed with a combination of debt and equity. A final investment decision is expected within six months.

The project marks an effort by indigenous communities to gain a foothold in a Canada-wide push by the government and companies to reduce the country’s carbon footprint, among the largest per capita of any industrial country. The refinery announcement happened the same day as Canada’s Minister of Natural Resources Jonathan Wilkinson said the government would grant C$800 million for approximately 60 projects to cut carbon emissions in fuels. 

Reconciliation, an affiliate of the same group that seeks to buy the government-owned Trans Mountain pipeline on behalf of indigenous communities, and Siksika are seeking supply contracts for low-carbon fuel with airlines that use Calgary’s airport, including WestJet Airlines Ltd. and Air Canada, Mason said. The fuel would initially be blended with regular jet fuel for use by aircraft flying out of the airport, reducing their exposure to emissions and to rising carbon taxes. 

© 2022 Bloomberg L.P.

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