Dow will build a new net-zero-emission ethylene cracker as part of an $11.5-billion project at the company’s Edmonton-area petrochemical plant.

U.S.-based Dow announced that it will invest US$6.5 billion to build the world’s first net-zero Scope 1 and 2 emissions integrated ethylene cracker and derivatives facility at the site of its plant in Fort Saskatchewan, Alta. The project includes retrofitting the site’s existing cracker to net-zero Scope 1 and 2 emissions.

Ottawa will provide up to C$400 million from Canada’s carbon capture, utilization, and storage investment tax credit and clean hydrogen investment tax credit, Deputy Prime Minister and Finance Minister Chrystia Freeland announced.

Alberta Premier Danielle Smith said her government will provide a 12% grant, or approximately C$1.8 billion, through the province’s petrochemicals incentive program.

Dow said the new cracker will increase the site’s polyethylene production capacity by two million metric tonnes per annum.

Polyethylene, refined from oil, is a liquid used to produce plastics. Dow said the new capacity will enable the company to capture growing demand in high-value markets, such as packaging, infrastructure and hygiene.

The investment comes after Dow’s board made a positive final investment decision on the project that was announced in 2021. Construction is slated to begin in 2024 with the capacity additions coming in phases.

The first phase is slated to start up in 2027 and the second phase is schedule to launch in 2029.