Thousands of replaced railway ties sit stockpiled near Dunmore on Wednesday. The company that has an agreement with CPKC railways to process the ties into biodiesel fuel has cancelled a deal to build a refinery in Dunmore and will take over a facility in Carseland, Alta., it announced Wednesday.--News Photo Collin Gallant
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A proposal to build a bio-diesel refinery in Dunmore has been cancelled as the company puts all its efforts into buying and commissioning a similar facility in Carseland, Alta. to process railway ties into fuel.
Cielo Waste Solutions said in a release Wednesday that it offered to pay $2 million after a March deadline passed to offer the group of investors, known as Renewable U, a plan to advance the agreement to build a refinery near Medicine Hat.
Instead, Cielo says it will focus on the purchase of an existing plant, also announced Wednesday, owned by Rocky Mountain Fuels, then adding major components to have it operating by the end of 2024.
“As a result … Cielo will redirect railway tie processing to the (enhanced gas to liquids) facility,” reads a Cielo release. “This realignment of resources reflects Cielo’s commitment to enhancing operational efficiencies and advancing immediate revenue-generating projects.”
The plant, which is already in operation, will provide annual revenue of $18 million, according to Cielo, which it expects to grow to $100 million in gross revenue by late 2027 after additional investment.
Cielo CEO Ryan Jackson said in a prepared statement that transaction has played a key goal of showing positive income within two years, after he joined the firm from a former position with Renewable U.
“We have taken the first of many steps to build Cielo into a revenue generating company with continuous operations in 2024,” said Jackson. “We believe that Cielo will be able to provide a low technical risk and a compelling business model that offers a path to profitability without the need for subsidies.”
Principals with Renewable U did not respond to media inquiries Wednesday.
Alberta-based Cielo Waste Solutions and Renewable U first proposed in late 2018 a network of refineries that would be fed by ag, municipal and industrial solid waste, including sites in territories around Grande Prairie, Medicine Hat, Kamloops and Winnipeg.
However, the effort stalled during the pandemic and as Cielo worked to scale up its own technology and processes. Memorandums of understanding and franchise rights for several facilities were exited in May 2023.
Company officials still promoted its goal to build a flagship refinery planned for Cypress County later in the year however, though only after scaling up a prototype facility it owned in Aldersyde, near High River.
At the same time, Cielo acquired rights to a patented process to convert bio mass to fuel from Expander Energy.
That firm built its process into a now-operating bio-solid-to-fuel facility owned by Rocky Mountain Fuels.
The purchase price is considered to be $125 million, including the assumption of $23 million in debt.
Cielo will also have access to a $21-million grant won by Rocky Mountain Fuels from the Province of Alberta payable following confirmation of operating targets.
In 2021, Cielo officials along with local political leaders and two provincial cabinet ministers hosted local investors for a luncheon and tour of the Dunmore site – located at the intersection of the Trans-Canada Highway and Highway 41 N. in Cypress County.
Last year it sold land it was holding in Fort Saskatchewan in order to fund and focus on scaling up the prototype facility in Aldersyde before putting a deposit on the potential land sale in Dunmore and designing that plant.
