CIB invests $277M in biofuels facility

Quebec plant to be biggest in Canada

This article was written by Amanda Stephenson and was published in the Toronto Star on March 28, 2023.

The Canada Infrastructure Bank is making its first investment in low-carbon fuels, committing $277 million to a biofuels facility under construction in Varennes, Que.

The facility, known as Varennes Carbon Recycling, has a total price tag of $1.2 billion and is a jointventure project between Shell, Suncor Energy Inc., Swiss natural gas company Proman and the government of Quebec.

It is being built by Montreal-based Enerkem, whose proprietary technology will be used to produce biofuels and renewable chemicals out of landfill waste and wood waste. The plant will also incorporate one of the world’s largest electrolyzers, which will split water molecules into oxygen and green hydrogen for use in its biofuel-making process.

The project, which was first announced in 2020, will be the largest biofuels facility in the country once completed in 2025, said Canada Infrastructure Bank CEO Ehren Cory.

“What attracted us to the project was the scale and ambition of it, first of all,” Cory said. “For us at the CIB, this is our first investment in an area that I believe has a ton of potential for our country.”

There has been a recent explosion of interest in biofuels — these are fuels derived from renewable biomass such as agriculture waste, food waste, even algae — as companies seek to lower their greenhouse gas emissions.

Other projects in the works in this country include Imperial Oil’s plans to build a renewable diesel complex at its Strathcona refinery near Edmonton, and Atco Energy’s plans to operate a renewable natural gas facility near Vegreville, Alta.

In last year’s federal budget, the Canada Infrastructure Bank, a federal Crown corporation, was given the mandate to include clean fuel production, carbon capture utilization and storage, and hydrogen production under its existing clean power and green infrastructure investment areas.

“I don’t think the private sector is lagging or reticent. We’ve actually seen a ton of interest from private sector players, big and small, across the country,” Cory said. “The challenge that we see, and I think this is why the Canada Infrastructure Bank plays such an important role, is the level of risk and uncertainty these projects still bear.”

Recently, Parkland Fuel Corp. announced it would not go ahead with its plan to build a stand-alone renewable diesel complex at its refinery in Burnaby, B.C., arguing the company cannot compete with the financial incentives being offered in the U.S. for renewable fuel construction.

Cory said there is also market risk and uncertainty around what kind of premium customers will pay for low-carbon fuels, and how carbon pricing systems and carbon credits in different jurisdictions will influence that market.

“We all know what 2050 looks like, but getting there has a lot of uncertainty,” Cory said. “That’s where we can help.”

He said the CIB is seeking to finance up to $5 billion in green infrastructure projects, which should accelerate deployment of these technologies by helping private sector proponents reduce their risk.

The Varennes carbon recycling facility is expected to convert more than 200,000 tonnes of non-recyclable waste into biofuels annually, with a capacity of up to 130 million litres.

Project proponents say the facility will reduce greenhouse gas emissions by more than 170,000 tonnes annually, the equivalent to taking 50,000 passenger vehicles off the road.

Author: Ray Nakano

Ray is a retired, third generation Japanese Canadian born and raised in Hamilton, Ontario. He resides in Toronto where he worked for the Ontario Government for 28 years. Ray was ordained by Thich Nhat Hanh in 2011 and practises in the Plum Village tradition, supporting sanghas in their mindfulness practice. Ray is very concerned about our climate crisis. He has been actively involved with the ClimateFast group ( for the past 5 years. He works to bring awareness of our climate crisis to others and motivate them to take action. He has created the website, for tracking climate-related news articles, reports, and organizations. He has created to focus on what you can do to address the climate crisis. He is always looking for opportunities to reach out to communities, politicians, and governments to communicate about our climate crisis and what we need to do. He says: “Our world is in dire straits. We have to bend the curve on our heat-trapping pollutants in the next few years if we hope to avoid the most serious impacts of human-caused global warming. Doing nothing is not an option. We must do everything we can to create a livable future for our children, our grandchildren, and all future generations.”

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