The planned construction of a multi-billion dollar, net-zero petrochemical project near Edmonton will be delayed as chemical firm Dow Inc. looks to conserve cash amid unfavourable market conditions, the company said Thursday.
Dow’s Path2Zero facility — to be built in Fort Saskatchewan in Alberta’s Industrial Heartland — was first announced in 2021 and garnered financial backing from the federal and provincial governments in 2023.
The $8.9 billion carbon-neutral project was touted as the world’s first net-zero emissions integrated ethylene cracker and derivatives site. Its plans to boost production of ethylene involved constructing a new facility and retrofitting an existing plant.
Dow Inc. said on Thursday that it expects extended pressure on earnings as uncertainty from U.S. President Donald Trump’s erratic trade policies adds to macroeconomic volatility.
Construction will be delayed until market conditions improve, CEO Jim Fitterling said in a post-earnings call.
“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 company said it was focused on ensuring the project’s returns are higher than its capital cost. “And because of that, now is the time to delay construction before spending ramps up.”
With the project stalled, Dow expects its total enterprise capital expenditure for 2025 to be $2.5 billion, compared to its original plan of $3.5 billion.
Dow, along with other chemicals firms, has been struggling with higher feedstock and energy costs alongside weak demand and prices for its products, especially in markets such as Europe.
The company said it expects to see delays in purchase and investment decisions — from both consumers and corporations — until negotiations on tariffs are finalized.
The U.S.-based company said it chose Alberta for the project because it offers cost-competitive natural gas as well as cost advantage ethane, a key feedstock for ethylene production.
“Our industry is in one of the most protracted down cycles in decades,” Fitterling said.
“Now — with the uncertainty around where tariffs are going to land, with the impact that’s having on demand — that’s driving our lower for longer [earnings] outlook.”
The expansion project would have produced and supplied about three million tonnes of low to zero-carbon emissions polyethylene and ethylene derivatives for customers around the globe, according to Dow.
The Alberta Petrochemicals Incentive Program has committed approximately $1.8 billion to the project. The federal government will be contributing up to $400 million from Canada’s carbon capture, utilization and storage investment tax credit as well as the clean hydrogen investment tax credit.
According to previous reporting, construction was to begin in 2024, with phase one expected to be completed by 2027 and phase two in 2029.
