Exxon’s renewable-diesel facility was first announced in August 2021 and came amid similar project proposals from refiners including Phillips 66 and Valero Energy Corp. as companies sought to boost biofuel production to curb greenhouse gas emissions. The Canadian facility will reduce emissions in the Canadian transportation sector by about 3 million metric tons a year, Imperial estimates.
“We are making strategic investments to reduce greenhouse gas emissions from our own operations and to help customers in vital sectors of the economy reduce their emissions,” Imperial Chief Executive Officer Brad Corson said in the statement.
Renewable diesel is considered the cleanest form of the fuel because it is made from feedstocks such as vegetable oil but has the same chemical structure as oil-derived diesel, making it easier than biodiesel to substitute in traditional engines, National Bank of Canada analyst Travis Wood said in a note Thursday.
For Imperial, the announcement has a “neutral impact for now given the capital outlay and the long-term adoption, appreciating that Imperial continues to make strategic investments to reduce emissions from its own operations,” Wood said. He rates the shares sector perform, the equivalent of a hold.