- Brownfield investment in Fort
Saskatchewan, Alberta, will be the world's first net-zero
Scope 1 and 2 emissions ethylene and derivatives complex
- Delivers 2 million MTA of organic growth in attractive,
high-end markets while decarbonizing 20% of Dow's global ethylene
capacity
- $1 billion of EBITDA growth expected at full run
rates over the economic cycle; expected to be one of Dow's most
cost-competitive sites in the world
- Eliminates 1 million MTA of CO2e by converting
hydrogen from cracker off-gas as a clean fuel as well as
CO2 capture and storage
- Best-owner mindset leverages additional $2 billion of
investment from third-parties for circular hydrogen, CO2
capture, and other infrastructure assets
- Subsidies and incentives from federal, provincial, and local
authorities support Dow's targeted returns
MIDLAND,
Mich., Nov. 28, 2023 /PRNewswire/ -- Dow
(NYSE: DOW) today announced that its board of directors has
declared Final Investment Decision on the Company's Fort Saskatchewan Path2Zero investment to
build the world's first net-zeroi Scope 1 and 2
emissionsii integrated ethylene cracker and derivatives
facility in Alberta, Canada.
The $6.5 billion project,
excluding governmental incentives and subsidies, includes building
a new ethylene cracker and increasing polyethylene capacity by 2
million MTAiii as well as retrofitting the site's
existing cracker to net-zero Scope 1 and 2 emissions. The
investment is expected to deliver $1 billion of EBITDA growth
per year at full run rates over the economic cycle while
decarbonizing 20% of Dow's global ethylene capacity.
This new capacity will enable Dow to capture growing customer
demand in high-value markets, such as packaging, infrastructure and
hygiene, among others, with potential additional value captured
from commercializing low and zero-emissions products. The project
builds on Dow's expertise in successfully implementing large
projects, such as its TX-9 cracker in Freeport, Texas, which has delivered more than
15% return on invested capital since its 2017 start-up through
best-in-class capital intensity, conversion cost, and low emissions
intensity.
The board's approval enables the Company to begin construction
in 2024. Capacity additions are expected to come online in phases,
with the first phase starting up in 2027, adding approximately
1,285 KTAiv of ethylene and polyethylene capacity,
and the second phase starting up in 2029, adding an additional
approximately 600 KTA of capacity.
To achieve net-zero Scope 1 and 2 emissions, the Fort Saskatchewan Path2Zero project will
deploy Linde's air separation and autothermal reformer
technology to convert the site's cracker off-gas to hydrogen, which
will be used as a clean fuel to supply the site's furnaces. In
addition, carbon dioxide emissions will be captured and stored,
reducing existing emissions by approximately 1 million MTA of
CO2e while abating all emissions from the addition of
the site's new capacity.
The Canadian and Alberta Advantage
Dow selected the Fort Saskatchewan
site for this investment as Western
Canada offers highly cost-competitive natural gas relative
to other regions, as well as cost-advantaged ethane, a key
feedstock for ethylene production. At full run-rates, the site is
expected to be one of Dow's most cost-competitive in the world. The
region also features access to existing CO2
transportation and storage infrastructure with available capacity
to fully support decarbonization of the project. It is home to a
high-class workforce and Dow has been part of the community for
more than 60 years.
Additionally, the governments of Canada, Alberta, and Fort
Saskatchewan have made subsidies and incentives available to
support this project and to drive innovation in low-emissions
manufacturing in Canada. It will
be the first project to access Canada's new ITC program.
Dow's investment leverages approximately $2 billion of investment from third-party
companies for circular hydrogen, CO2 capture, and other
infrastructure assets critical to the project execution. Earlier
this year, Dow announced that Linde had been selected as its
industrial gas partner for the supply of clean hydrogen and
nitrogen for the site, and Fluor was selected for front-end
engineering and design. Additionally, Dow is partnering with Wolf
Midstream, which will provide CO2 transportation along
the Alberta trunk line, and with
Ravago which will provide third-party logistics for finished
products from the site.
Attributable Quotes
Jim
Fitterling, Dow Chair and CEO
- "The project serves as a leading example that industrial
decarbonization is both possible and profitable."
- "The opportunity to decarbonize our assets while driving growth
is central to Dow's business strategy. All our stakeholders benefit
from this investment – creating value for our customers and
shareholders, new opportunities for our employees, economic growth
for the community, and fewer greenhouse gas emissions for the
environment."
Karen S. Carter, Dow
President, Packaging & Specialty Plastics
- "This investment paves the way for growth of our entire
Packaging and Specialty Plastics portfolio. It gives us the
opportunity to become the industry's first provider of
zero-emissions products and solutions. Our commitment to innovation
and designing products for circularity allows us to meet the
evolving needs of our customers across growing sectors such as
packaging, infrastructure, and hygiene, among others."
- "Plastics have long been recognized for their environmental
advantages, with a greenhouse gas footprint that is typically less
than half of alternative materials. 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, empowering our customers to make
significant strides in their sustainability efforts."
Diego Ordonez, Dow Canada
President
- "This project will have a profound positive impact on our
employees and the community, creating jobs and economic opportunity
while positioning the region to be a leader in low emissions
manufacturing. Our collaboration with government officials, the
community of Fort Saskatchewan,
our Indigenous neighbors, and the host of partner companies
involved has been key to enabling this investment to move
forward."
Danielle Smith, Premier of
Alberta
- "This investment by Dow is further evidence of the opportunity
that exists in Alberta. We are
proud that Dow has chosen to build and launch their project here.
This project does not just mean net-zero emissions, it means more
jobs and a stronger economy. I look forward to the next steps,
including construction starting next year."
About Dow
Dow (NYSE: DOW) combines global
breadth; asset integration and scale; focused innovation and
materials science expertise; leading business positions; and
environmental, social and governance leadership to achieve
profitable growth and help deliver a sustainable future. The
Company's ambition is to become the most innovative, customer
centric, inclusive and sustainable materials science company in the
world. Dow's portfolio of plastics, industrial intermediates,
coatings and silicones businesses delivers a broad range of
differentiated, science-based products and solutions for its
customers in high-growth market segments, such as packaging,
infrastructure, mobility and consumer applications. Dow operates
manufacturing sites in 31 countries and employs approximately
37,800 people. Dow delivered sales of approximately $57B in
2022. References to Dow or the Company mean Dow Inc. and its
subsidiaries. For more information, please visit
www.dow.com or follow
@DowNewsroom on Twitter.
Cautionary Statement about Forward-Looking
Statements
Certain statements in this press release
are "forward-looking statements" within the meaning of the federal
securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Such statements often address expected future
business and financial performance, financial condition, and other
matters, and often contain words or phrases such as "anticipate,"
"believe," "estimate," "expect," "intend," "may," "opportunity,"
"outlook," "plan," "project," "seek," "should," "strategy,"
"target," "will," "will be," "will continue," "will likely result,"
"would" and similar expressions, and variations or negatives of
these words or phrases.
Forward-looking statements are based on current assumptions and
expectations of future events that are subject to risks,
uncertainties and other factors that are beyond Dow's control,
which may cause actual results to differ materially from those
projected, anticipated or implied in the forward-looking statements
and speak only as of the date the statements were made. These
factors include, but are not limited to: sales of Dow's products;
Dow's expenses, future revenues and profitability; any global and
regional economic impacts of pandemic or other public
health-related risks and events on Dow's business; any sanctions,
export restrictions, supply chain disruptions or increased economic
uncertainty related to the ongoing conflict between Russia and Ukraine; capital requirements and need for and
availability of financing; unexpected barriers in the development
of technology, including with respect to Dow's contemplated capital
and operating projects; Dow's ability to realize its commitment to
net neutrality on the contemplated timeframe; size of the markets
for Dow's products and services and ability to compete in such
markets; failure to develop and market new products and optimally
manage product life cycles; the rate and degree of market
acceptance of Dow's products; significant litigation and
environmental matters and related contingencies and unexpected
expenses; the success of competing technologies that are or may
become available; the ability to protect Dow's intellectual
property in the United States and
abroad; developments related to contemplated restructuring
activities and proposed divestitures or acquisitions such as
workforce reduction, manufacturing facility and/or asset closure
and related exit and disposal activities, and the benefits and
costs associated with each of the foregoing; fluctuations in energy
and raw material prices; management of process safety and product
stewardship; changes in relationships with Dow's significant
customers and suppliers; changes in consumer preferences and
demand; changes in laws and regulations, political conditions or
industry development; global economic and capital markets
conditions, such as inflation, market uncertainty, interest and
currency exchange rates, and equity and commodity prices; business
or supply disruptions; security threats, such as acts of sabotage,
terrorism or war, including the ongoing conflict between
Russia and Ukraine; weather events and natural disasters;
and disruptions in Dow's information technology networks and
systems; and risks related to Dow's separation from DowDuPont Inc.
such as Dow's obligation to indemnify DuPont de Nemours, Inc.
and/or Corteva, Inc. for certain liabilities.
Where, in any forward-looking statement, an expectation or
belief as to future results or events is expressed, such
expectation or belief is based on the current plans and
expectations of management and expressed in good faith and believed
to have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or accomplished. A
detailed discussion of principal risks and uncertainties which may
cause actual results and events to differ materially from such
forward-looking statements is included in the section titled "Risk
Factors" contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 2022, and
the Company's subsequent Quarterly Reports on Form 10-Q. These are
not the only risks and uncertainties that Dow faces. There may be
other risks and uncertainties that Dow is unable to identify at
this time or that Dow does not currently expect to have a material
impact on its business. If any of those risks or uncertainties
develops into an actual event, it could have a material adverse
effect on Dow's business. Dow Inc. and The Dow Chemical Company
(TDCC) assume no obligation to update or revise publicly any
forward-looking statements whether because of new information,
future events, or otherwise, except as required by securities and
other applicable laws.
For further information, please contact:
Rachelle Schikorra
989-638-4090
ryschikorra@dow.com
Twitter: https://twitter.com/DowNewsroom
Facebook: https://www.facebook.com/dow/
LinkedIn: http://www.linkedin.com/company/dow-chemical
Instagram: http://instagram.com/dow_official
i Inclusive of Scope 1 and 2 emissions
ii Carbon
emissions refer to GHG emissions in
CO2e
iii MTA refers to
metric tonnes per
annum
iv KTA refers to
kilo tonnes per annum
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SOURCE The Dow Chemical Company