Dow Inc. is moving forward with a $6.5 billion investment in sustainable materials — including polyethylene resin — in Fort Saskatchewan, Alberta.
The board of Midland, Mich.-based Dow recently approved funding for Path2Zero, which officials said will be the world's first ethylene cracker and downstream derivatives unit with net-zero Scope 1 and 2 emissions.
The major project will increase annual production capacity for PE resin at Dow's existing Fort Saskatchewan site by about 4.4 billion pounds. The project also will include construction of a new ethylene cracker and retrofitting of the site's existing cracker.
Path2Zero is expected to create $1 billion of EBITDA (earnings before interest, taxes, depreciation and amortization) growth at full run rates over the economic cycle. Officials said in a Nov. 28 news release that it "is expected to be one of Dow's most competitive sites in the world." The project also is expected to decarbonize 20 percent of Dow's global ethylene capacity.
The project will leverage $2 billion in additional investment from third parties for circular hydrogen, CO2 capture and other infrastructure assets. Path2Zero also will receive subsidies and incentives from federal, provincial, and local authorities.
Officials said the new PE capacity will enable Dow to capture growing customer demand in high-value markets, such as packaging, infrastructure and hygiene. They added the project "builds on Dow's expertise" in implementing large projects, such as its TX-9 cracker in Freeport, Texas, which officials said has delivered more than 15 percent return on invested capital since 2017.
Construction on the new project is set to begin in 2024. Capacity additions are expected to come on line in phases, with the first phase starting in 2027 and the second phase starting up in 2029.
To achieve net-zero Scope 1 and 2 emissions, the Fort Saskatchewan Path2Zero project will use Linde's technologies to convert the site's cracker off-gas to hydrogen, which will be used as a clean fuel for the site's furnaces. Carbon dioxide emissions will be captured and stored, reducing existing emissions by approximately 2.2 billion pounds while abating all emissions from the addition of the site's new capacity.
Officials said Dow selected Fort Saskatchewan for the investment because Western Canada offers highly cost-competitive natural gas relative to other regions, as well as cost-advantaged ethane feedstock. The region also features access to existing CO2 transportation and storage infrastructure. Dow has operated in the area for more than 60 years.
"The project serves as a leading example that industrial decarbonization is both possible and profitable," Dow Chairman and CEO Jim Fitterling said. "The opportunity to decarbonize our assets while driving growth is central to Dow's business strategy."
Packaging & Specialty Plastics President Karen Carter added that the investment "paves the way for growth of our entire Packaging and Specialty Plastics portfolio."
"Plastics have long been recognized for their environmental advantages, with a greenhouse gas footprint that is typically less than half of alternative materials," she said. "With this strategic investment and our commitment to transform plastic waste to create circular and renewable solutions, we are poised to achieve even greater reductions in emissions."
Dow is one of the world's largest producers of PE and specialty resins. The firm employs 37,800 worldwide and posted sales of almost $57 billion in 2023.