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Covenant Energy gets ready to meet demand for renewable diesel

covenant energy plant

Covenant Energy, a Canadian-based fuel innovator, is getting ready to meet the increasing demand of renewable diesel, as well as other low-carbon fuels. The company announced this Thursday its processing plant in Saskatchewan just finishes its initial pre-FEED engineering and feedstock studies.

Firstly, the company highlights that studies finished for its plant include, apart from the mentioned above, marketing, demand, and pricing studies; all of which gave positive results. Consequently, when receiving all the necessary approvals, the plant will start production in the second half of 2023.

Secondly, the plant will have some special characteristics, like 6,500 barrels a day of production capacity. Around 300 to 325 million liters per year. Finished products for this output will include renewable diesel, arctic-grade renewable diesel, as well as sustainable aviation fuels.

Moreover, the plant will have a reduction of greenhouse gas emissions in the range of 80 to 85%; compared to a traditional diesel plant; as it will utilize recycled hydrogen in its production, the plant will reduce its carbon footprint.

In addition, it will create demand for 35 million bushels of canola seed to produce 325 to 350 thousand tons of canola oil feedstock per year; demand which is worth in around $500 million.

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Covenant Energy’s project to be key driver in demand for renewable diesel

Consequently, the renewable diesel plant of Covenant energy will positively impact the local labor market with up to 60 permanent job positions; plus hundreds of thousands of hours of employment throughout the project construction.

However, Covenant Energy remarks that “while this project is advancing; it is important to restate that the right demand signal for clean fuels is imperative for the approval of this renewable diesel facility.

In fact, one of the key drivers for this demand would be the Canadian government’s Clean Fuel Regulations; published as a draft in December 2020. Therefore, if the planned demand boosts, Covenant energy will increase its investment in the plant to double its production capacity, later in time.

On the other hand, the plant’s construction will happen at a strategic location, on a Class 1 railway; giving the ultimate flexibility to access feedstock from across Canada and the U.S.; as well as providing the potential to sell product into the U.S. market.

Finally, Josh Gustafson, Covenant Energy CEO, said. “We are also excited to explore partnership with the oil and gas industry; through fuel blending to bring longevity and diversity to a region that traditionally produces other fossil fuels.”

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