(Reuters) -Dow Inc unveiled on Wednesday plans to boost its core earnings by $3 billion a year over the next decade, with investments that include building a new net-zero carbon emissions ethylene and derivatives facility in Alberta, Canada.
The chemicals maker, once part of DowDupont, joins a growing list of companies that have announced plans to cut emissions and reduce carbon footprint following pressure from investors.
Calling the new project a “no-regrets” move, Dow’s Chief Executive Officer Jim Fitterling said he expects the facility to deliver about $1 billion of additional earnings before interest, tax, depreciation and amortization (EBITDA) per year by 2030.
Near-term investments to expand manufacturing capacity of chemicals and materials used in packaging, specialty plastics, coatings and other businesses are expected to generate about $2 billion of EBITDA, the company said.
The new project would more than triple Dow’s ethylene and polyethylene capacity at its Fort Saskatchewan, Alberta site, while retrofitting the site’s existing assets to produce net-zero carbon emissions. Dow expects to allocate about $1 billion of capital spending annually to decarbonize its global assets site-by-site.
The project will help Dow produce about 3.2 million metric tons of certified low- to zero-carbon emissions polyethylene and ethylene derivatives.
Dow said it chose Fort Saskatchewan because the region offers competitive energy and feedstock prices, and has access to third-party carbon storage facilities that will help the project reach net-zero emissions.
Alberta Premier Jason Kenney said the project could become the largest investment in the province in more than a decade. Alberta is Canada’s main energy-producing province but its economy has been battered in recent years by volatile global oil prices.
“If this project receives regulatory approval and a positive final investment decision, it will lead to a multibillion-dollar investment in our economy and huge job opportunities in both the construction and operating phases,” Kenney said in a statement.
Dow also signed eight new renewable power purchase agreements to reduce Scope 2 emissions, or emissions from the power a company uses for its operations, by more than 600,000 metric tons of carbon dioxide equivalent per year.
Last year Dow said that by 2030, it would reduce its net annual carbon emissions by 5 million metric tons versus its 2020 baseline, amounting to a 15% reduction, and set a target to be carbon neutral by 2050.
Net zero plans require companies to decrease carbon dioxide emissions and offset any remaining emissions using projects that capture the gas.