BIOX Corporation has announced the purchase of Methes Energies 50 million per year biodiesel facility located in Sombra Ontario for U.S. $4.5 million. BIOX says the facility has not achieved nameplate production due to working capital and market challenges and today is not in production. The company plans to invest C$5 million over the next 12 months on upgrades that will improve the biodiesel plant’s efficiency, and allow the use of multiple feedstocks with a focus on lower carbon intensity feedstocks such as animal fats and recycled cooking oils.
“The Sombra acquisition represents a 75% increase in our production capacity and fits our strategy to control and distribute more gallons, leveraging our existing Sales and Marketing capabilities. We believe the Ontario market will play an increasingly important role in our distribution network. The implementation of the Greener Diesel program in Ontario, with its increasing blend rates and move toward lower carbon intensity fuels in 2017, made Sombra an attractive asset,” said Alan Rickard, BIOX CEO.
In April, Ontario implemented a Greener Diesel program based on biofuel percentage and carbon intensity. It also increases the use of biofuel from 3 percent to 4 percent in 2017. The regulation requires the use of an estimated 240 million litres of biobased diesel on an average greenhouse gas adjusted volume basis in 2017.
“We are already seeing with the increase in the Ontario mandate for 2016 that distribution of biodiesel from our Hamilton facility is shifting quickly from dependence on the U.S. market to fulfilling the demand in Ontario,” continued Rickard. “We expect this shift in distribution away from the U.S market to continue as the Ontario Greener Diesel mandate increases for 2017.”
BIOX currently supplies biodiesel to Shell Canada Limited through an inter-terminal pipeline that feeds directly to the Shell distribution terminal in Hamilton located adjacent to BIOX’s Hamilton facility.