Parkland cancels plans to build renewable-diesel complex
Parkland Corp. cancelled its plans to build a stand-alone renewable diesel complex at its refinery in Burnaby, B.C. The company says it made the decision based on rising project costs, a lack of market certainty around emerging renewable fuels and U.S. legislation that advantages U.S. producers.
The Calgary-based energy and retail company that operates gas stations under the Pioneer, Ultramar, Columbia Fuels, Chevron and other brand names, announced its plan to build the complex in May last year.
The complex was slated for build at its Burnaby refinery with the capability of producing 6,500 barrels of renewable diesel per day. In the original plans, Parkland said the B.C. government would over 40% of the project costs in the form of low-carbon fuel credits.
Parkland indicated that the U.S. Inflation Reduction Act of 2022 played a role in cancelling its plans. The Act – which is the largest piece of U.S. federal legislation to address climate change – came into effect in August last year and advantages U.S. producers of renewable energy, including diesel.
At the time of the original announcement Parkland also said it would ramp up the amount of renewable material it currently refines alongside traditional petroleum-based materials at the refinery to 5,500 barrels per day. The company is still going ahead with those plans.
The announcement came alongside Parkland’s fourth-quarter and year-end results on March 2. The company reported record earnings (adjusted before interest, taxes, depreciation and amortization) of $455 million for the period, up 75% from its fourth-quarter earnings in 2021. The company says it delivered its best safety performance last year and record earnings (adjusted before interest, taxes, depreciation and amortization) of $1.6 billion, up 29% from 2021. Fuel volumes for the year were 27 billion litres, up over 13% from 2021.
"I would like to thank the Parkland team for delivering an excellent year and commend them for their ongoing focus on safely serving our customers," said Bob Espey, president and CEO of Parkland. "Our accomplishments demonstrate the strength of our integrated business model and highlight our focus on creating long-term shareholder value."
Parkland also increased its quarterly dividend to 34 cents per common share, up from 3.25 cents.
"While we are not proceeding with the planned renewable diesel complex at our Burnaby Refinery, we will continue to expand our co-processing volumes. We are grateful for the support our renewable diesel project has had from all levels of government, particularly the Province of B.C.,” added Epsey.
Along with its sustainability journey, Parkland launched one of western Canada’s largest ultra-fact electric vehicle charging networks, which the company originally announced plans for in February last year. The fuel retailer later announced it would double the size of its offering at the company’s existing Chevron and On The Run locations in B.C. and Alberta.
