Plans World’s First Net Zero Ethylene Plant

Chemicals and materials science giant Dow announced plans to allocate approximately $1 billion per year of capex on investments aimed at decarbonizing its global asset base, as the company targets carbon neutrality by 2050.

The company outlined its capex goals at its 2021 Investor Day on Wednesday, while also announcing plans to build a net-zero carbon emissions ethylene plant, and a significant increase in its sourcing of renewable energy. Dow noted that Olefins – a class of chemicals including ethylene – and energy represent the bulk of the company’s operational carbon footprint.

Dow initially introduced its 2050 carbon neutrality goal last year, with the release of a series of sustainability commitments, which also included targets to reduce net annual carbon emissions by 15% by 2030, along with waste reduction and sustainable packaging pledges. At its investor day, the company outlined its strategy for its “phased” long-term approach to, with key steps including replacing end-of-life capacity with higher efficiency assets, and scaling carbon-efficient economical technologies.

While working to lower the carbon footprint of its own business, the company has identified multiple opportunities to capture value from the increasing demand for sustainable and low-carbon emissions products, such as circular packaging solutions, sustainable infrastructure, and green building materials.

One of Dow’s most significant emissions cutting moves announced at the event was the company’s plans for a net-zero carbon emissions integrated ethylene cracker and derivatives site in Fort Saskatchewan, Alberta. The production process to be used at the site will convert cracker off-gas into hydrogen for use as a clean fuel, and capture CO2 for transport and storage.

According to the company, the investment will enable Dow to decarbonize approximately 20% of its global ethylene capacity while growing polyethylene supply by about 15%.

Chairman and CEO Jim Fitterling, said:

“This investment builds on Dow’s strong leadership position and allows us to meet the increasing needs of customers and brand owners seeking to lower the carbon footprint of their products. Our advantaged position and disciplined approach to capital investment makes us well positioned to lead the industry in decarbonizing, growing and accelerating Dow’s path toward carbon neutrality.”

Dow stated that it selected the Alberta site due to the region’s competitive energy and feedstock positions, and its access to available third-party CO2 infrastructure.

Jason Kenney, Premier of Alberta, said:

“Today’s announcement from Dow is fantastic news for Alberta’s economy. If this project proceeds, it could represent one of the largest job-creating investments in Alberta in over a decade. By choosing Alberta to host the world’s first net-zero carbon emissions ethylene plant, Dow is highlighting our growing global leadership in emissions-reducing technology like carbon capture utilization and storage, and Alberta’s open for business policies.”

Dow also announced that it has signed several new renewable power purchase agreements (PPAs) across Europe and the Americas. The new agreements will provide 132 megawatts of energy from wind and solar sources, bringing the company’s renewable energy access to 850MW, significantly ahead of its 750MW 2025 target.

Jack Broodo, President, Dow Feedstocks and Energy, said:

“As one of the leading purchasers of clean power in the chemical industry and among the top 20 clean energy purchasers of corporations globally, we continually pursue opportunities to move our sites to cleaner, more cost-effective power while ensuring reliable operations. These agreements will keep Dow competitive now and into the future as we continue to deliver products and innovations that ultimately keep carbon emissions out of the environment.”