Covenant Energy planning renewable diesel plant in southern Saskatchewan

A renewable fuel start-up with ties to a farm near Estevan, Saskatchewan, has provided new details regarding its plan to build a renewable diesel production facility in southern Saskatchewan.

Covenant Energy says it plans to produce between 300 and 325 million litres of fuel from around 35 million bushels (roughly 800 thousand tonnes) of canola on an annual basis.

“Personally, being deeply rooted in the ag industry as a member of a fifth generation Saskatchewan farming family with over 13,000 acres of production, I see the positive future impact and I am excited about bringing value-added opportunities. We are also excited to explore partnership with the oil and gas industry through fuel blending to bring longevity and diversity to a region that traditionally produces other fossil fuels,” says Covenant’s president and CEO Josh Gustafson.

The proposed facility would produce renewable diesel, arctic-grade renewable diesel, and aviation fuel, with greenhouse gas reductions in the range of 80 to 85 per cent when compared with regular diesel. And unlike biodiesel, renewable diesel can usually be a direct substitute for fossil-fuel diesel, with no blending required.

“While this project is advancing, it is important to restate that the right demand signal for clean fuels is imperative for the approval of this renewable diesel facility,” the company says, noting “the federal government’s Clean Fuel Regulations, published as a draft in December 2020, would be the key driver of demand for this project and is critical for its success.”

The company says it will use approximately 80 per cent of the oil production capacity of a one million tonne per year canola crush facility, creating an opportunity for a co-located new crush facility.

The actual location of Covenant’s proposed plant has not been announced, but the company says it will be on a Class 1 railway, providing flexibility for accessing feedstock, as well as providing the potential to sell into the U.S. market.

Last week, True North Renewable Fuels, a Calgary-based company, asked the City of Regina for a grant of $1 million to help fund an engineering design study for a proposed $2.4 billion project in Regina that would produce up to one billion litres of renewable diesel, requiring several million tonnes of canola per year.

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