Federated Co-op suspends plan to build renewable diesel and canola crush plants

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Federated Co-operatives Limited (FCL) says it is formally pausing plans to move ahead with two major projects in Regina, Saskatchewan.

The proposal to build a renewable diesel production facility and a joint venture canola crush plant has been suspended for the foreseeable future “due to regulatory and political uncertainty, potential shifts in low-carbon public policy, and escalating costs,” says FCL, in a statement issued Jan. 17.

The facilities were to be located north of FCL’s existing refinery complex on the northeast side of Regina.

“The decision to press pause on these two projects is not one we took lightly,” says Heather Ryan, FCL CEO. “When making this decision, we undertook a robust due-diligence process, that carefully considered our best pathway to meet compliance obligations, while ensuring investments are appropriate, provide value and benefit to the Co-operative Retailing System and support our short and long-term sustainability goals.”

The 1.1 million tonne/year canola crush plant was announced in 2022 as a joint venture with AGT Foods.

“I want to take this opportunity to thank Heather and everyone at FCL. Our partnership was built on an aligned vision and culture, and the project reflected that alignment,” says Murad Al-Katib, president and CEO of AGT Foods, acknowledging the decision to shelve the project. “…While it is not the right time to continue our JV canola crush facility, agriculture remains a growth sector in Saskatchewan’s economy, where we will continue to look for new opportunities for investment.”

The partnership with AGT was a 51 – 49 per cent split, with FCL holding the majority ownership stake. The proposed canola crush facility would have supplied approximately 50 per cent of the feedstock required for a 15,000-barrel-per-day renewable diesel plant.

FCL says it’s still pursuing ways to comply with the Canadian government’s Clean Fuel Regulations, with plans to co-process and blend renewable fuels at the Regina refinery complex.

Conservative Party leader Pierre Poilievre, who polls indicate will very likely become prime minister in the upcoming federal election, has been highly critical of the Clean Fuel Regulations, referring to them as a “second carbon tax.” Renewable fuel policies and mandates in the U.S. are also facing an uncertain future with the transition to the Trump administration.

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