US chemical producer Dow has pressed pause on its plan to build the world’s first net-zero chemical plant in Canada, broadcaster CBC reports.
It was planning to invest US$6.5bn on the ethylene plant in Fort Saskatchewan, near Edmonton in Alberta.
The project to expand its existing facility was first announced in 2021. It secured funding from provincial and federal governments in 2023 (see further reading).
The Alberta Petrochemicals Incentive Programme committed around US$1.3bn to the project. The federal government said it would contribute up to US$288m from its carbon capture and clean hydrogen tax credit scheme.
So far, the company has been carrying out site preparation, installing utilities and erecting administrative buildings.
The plant would have produced about 3 million tonnes of polyethylene and ethylene derivatives a year for export.
Dow chief executive Jim Fitterling said in an earnings call yesterday the company was expecting problems from Donald Trump’s tariff chaos, and that the project would be delayed until market conditions improve.
“This decision supports our near-term cash flow and adjusts the project timing to align with the market recovery,” Fitterling said. “We remain committed to the long-term strategic rationale of the project and the growth upside that it will enable in targeted applications like pressure pipe, wire and cable and food packaging.”
The first phase of the “Path2Zero” plant was expected to be finished by 2027, with the second phase following in 2029.
Dow and other chemicals firms have also been hit by higher feedstock and energy costs, as well as weak demand in Europe.
The choice of Alberta for its pioneering plant was partly driven by the availability of low-cost natural gas and ethane.
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