Photo: Sc.wenwen Development Corporation

This conceptual drawing shows what a sustainable fuel plant proposed for a plot of land on the Tk'emlups reserve across from Westsyde might look like.

The economic winds appear to be blowing in the right direction for the proponents of a large-scale biofuel refinery proposed for a plot of land across the North Thompson River from Westsyde.

The provincial government recently unveiled new regulations upping renewable fuel content requirements for gasoline and diesel. The changes will also require that, starting next month, the biofuel products be made in Canada.

Azure Sustainable Fuels Corp. is partnering with Tk’emlups te Secwepemc and Sc.wenwen Economic Development Corporation on a proposed fuel plant called 7 Mile Renewable Fuels.

The refinery is planned for a parcel of land along the CN Rail tracks south of Rayleigh. It would turn vegetable oils like canola and soybean oil into low-carbon jet fuel or diesel.

Vanessa Vredenburg, director of Indigenous and stakeholder relations with Azure Sustainable Fuels Corp., said the new regulations were “definitely positive” and send a strong signal to the market that Canadian-made renewable fuels are in demand.

“Which is a really good news story for us at 7 Mile,” she said.

Vredenburg said the refinery would be capable of producing sustainable aviation fuel (SAF) or renewable diesel — allowing it to help meet B.C.'s new diesel requirements.

“Our facility would produce about 500 million litres per year,” Vredenburg said.

“My calculations — I think B.C. currently is estimated to utilize about 3.4 billion litres per year, so eight per cent would be about 272 [million] so we would oversupply that with our facility.”

Go with the market

Vredenburg said the climate targets Canada has agreed to would indicate there was market demand for a facility like 7 Mile, but without similar requirements for SAF it is harder to gauge what demand looks like.

“I think it would be great if there was a similar requirement put out for SAF, but obviously there isn’t any SAF being produced, or not significant quantities in Canada right now, to really be a need for that,” she said.

“It’s kind of a chicken or egg situation.”

Azure says SAF is already used by carriers such as WestJet and Air Canada.

But without minimum requirements for SAF, Vredenburg doesn’t see the product becoming more widely adopted — unless the cost for SAF comes down to be more comparable with conventional jet fuel, or new regulations are introduced.

“That’s where these regulations coming out makes it that, OK, now you have to have this much, so that’s a reason to spend more money on it,” she said.

Last December the project was anticipated to start up in 2028, and Vredenburg said what the facility will end up producing when it opens will depend on market conditions.

“We have to go by what the market is saying,” she said.

“This regulation really would point towards more of a diesel need, but again, then you have to also look at what is currently out in the market, and I think the market is pretty flooded with diesel right now."

Plans for a network

Azure has a plan to build a cross-Canada network of sustainable aviation fuel plants — one on Tk’emlups land, another in Manitoba and a third in Ontario.

Vredenburg the plan is to go forward with all three plants, but market demand to see which is most economically viable will determine which is built first.

After U.S. President Donald Trump’s 10 per cent levy on Canadian energy came into effect last week, Vredenburg said she thinks there needs to be a focus on creating more energy security within Canada.

“Obviously, the focus would be on B.C., but then beyond that I think we need to look within Canada to satisfy all of our climate targets in Canada before looking to export,” she said.

In a statement to Castanet, the B.C. Ministry of Energy and Climate Solutions said the province "has sufficient production of biofuels to meet the new fuel requirements."

It expects the five per cent requirement for gasoline will be met with co-processed renewable gasoline and naphtha at B.C. refineries and with ethanol produced in other provinces. No ethanol is currently produced in B.C.

The eight per cent diesel requirement is expected to initially be met with 5.5 per cent coming from renewable diesel and biodiesel production, and co-processed renewable diesel at B.C. refineries, while the remainder will come from other provinces.

“We expect these proportions will shift as companies in B.C. and other provinces increase production to help respond to our new requirements,” the ministry said.