Carbon levy cash to finance biodiesel refinery in Edmonton

An Edmonton based company plans to commercially produce a new biofuel capable of completely replacing diesel by the end of the year, at a lower cost than existing renewable fuels.

SBI Bioenergy in south Edmonton is in the final stages of building a biorefinery to convert canola oil and animal fats into a renewable fuel that can replace or be blended with regular diesel.

CEO Inder Pal Singh said his technology produces a cleaner fuel that other renewable products, because it doesn't use water or hydrogen. The process also doesn't produce any waste, he said.

"Any kind of vegetable oil can be converted into renewable diesel or renewable jet fuel using our technology," he said.

He added the low operating costs allow SBI to market a cheaper product than most renewable fuels.

While the new biofuel is capable of replacing diesel entirely, gas stations aren't equipped to carry entirely renewable fuels, Singh said.

His company plans to sell the fuel to refineries to be mixed with other diesel products to help meet federal renewable fuel standards.

Interest from investors

He said he's already had interest from investors in the U.S. and Europe.

"There's international interest in this technology because our technology provides a major advantage in greenhouse gas reduction benefits and in operating and capital costs compared to what is out there today," Singh said.

SBI is preparing to move into its new demonstration refinery in the Edmonton Research Park, which will produce 10 million litres of renewable fuel per year by the end of 2016.

After that, Singh plans to launch a full-scale plant capable of producing 240 million litres per year by 2018.

Based on his rough estimates, Singh said at that stage the company may be able to supply the entire province with enough biofuel to meet renewable fuel standards.

The Alberta government has earmarked $10 million from the existing carbon levy for the $20 million refinery.

Premier Rachel Notley announced the funding at a press conference on Thursday.

"The potential of this innovation is game changing," she said.

According to the government, the investment will reduce greenhouse gas emissions by more than 112,000 tonnes by 2020 – the equivalent of removing 23,000 cars from the road for one year.

Singh said he eventually hopes to grow his business to manage gas stations that carry his product, so consumers can fill up their tanks with an entirely renewable fuel.