Amount: grants worth 12% of a project’s eligible capital costs.
The Alberta Petrochemicals Incentive Program (APIP) is a key part of Alberta’s Recovery Plan and the Natural Gas Vision and Strategy to turn the province into a top global producer of petrochemicals. It provides grants to companies to attract investment in new or expanded market-driven petrochemical facilities.
About the Program
The Alberta Petrochemicals Incentive Program will enhance certainty and flexibility for investors and cut red tape to attract investment into Alberta’s petrochemicals sector. Alberta has a tremendous opportunity to capitalize on the growing global petrochemical sector and diversify the province’s economy, with our abundant natural gas reserves and a competitive, investor-friendly business environment.
Key features of the program include:
- A 5 or 10-year program period, depending on the scope of the project, during which eligible projects must be built and operational to receive funding.
- An open and transparent approach, whereby every project submitted that meets the program’s criteria will receive funding once built and operational.
- Grants worth 12% of a project’s eligible capital costs will be issued to companies after projects are operational. Grants allow companies to account for the full value of the incentive provided when calculating their project’s return on investment.
- Better alignment with typical investment cycles by making funding available throughout the program’s duration.
Eligibility Requirements
- The proposed petrochemical project must be physically located within Alberta.
- The petrochemical project must process natural gas, natural gas liquids (ethane, propane, butane etc.), or petrochemical intermediates into different petrochemical intermediates, petrochemicals products, hydrogen, fertilizers or fuels.
- A portion of a petrochemical project may be eligible if it produces an ingredient not mentioned in the point above but is a core input to manufacture of the petrochemical products, fertilizers or fuels. In this case, the ingredient may be considered to be an eligible feedstock.
- Both new greenfield petrochemicals facilities, as well as brownfield expansions/debottlenecking, are eligible for the program, provided they meet other eligibility criteria.
- The petrochemical project must have a minimum investment in capital dollars of CAD $50 million.
- Prior Or Other Funding A petrochemical project is allowed to apply for and obtain funding from other government sources (federal/provincial/municipal), but projects can only receive funding from the Department from either PDP or APIP.
- The project creates at least one or more of new and incremental permanent jobs in Alberta’s petrochemical sector.
- Projects using eligible feedstock to produce hydrogen are eligible.
Carbon capture projects do not qualify for APIP. However, standalone hydrogen projects and projects that produce fuels from natural gas and natural gas liquids must capture the carbon dioxide by-product generated from the production process.
Eligible Projects
Eligible projects must meet these criteria:
- The project must be physically located in Alberta.
- The capital investment must be at least (CAD) $50 million.
- The facility must use natural gas, natural gas liquids, or petrochemical intermediaries such as ethylene, propylene, benzene etc. in the manufacturing of its own products.
- The project must create permanent jobs in Alberta.
Both new facilities, as well as brownfields and expansions on existing facilities, will be eligible for the program.
Eligible Costs
Not all capital costs associated with a project are eligible for reimbursement as part of the grant process. Costs eligible for reimbursement under APIP are related to manufacturing and processing capital expenditures.
Ineligible Activities
- Projects that have a Technology Readiness Level 8 or lower are ineligible.
- Routine maintenance and turnaround activities associated with existing petrochemical plants are ineligible.
- Any facilities associated with transportation, processing, storage or other activities in the midstream sector, such as midstream infrastructure facilities that capture ethane for further processing, gas plants, straddle plants, fractionators, pipelines, tankage, storage etc. are ineligible.
- Any facilities associated with the extraction or processing of hydrocarbons at a refinery, upgrader or partial upgrader are ineligible.
- Projects that propose to build liquefied natural gas facilities are ineligible.
- Projects that propose to build facilities that manufacture end user consumer products, as defined in the program, are ineligible
Eligibility Timeline
The program is open to applications starting from November 1, 2020 until November 1, 2030, based on capital investment. No further applications under the program will be accepted after the application window closes on November 1, 2030.
The program will be open to receive applications from proposed projects for either five years or ten years from the launch of the program, depending on the size of the project’s capital investment.
- Projects with a capital investment of between $50 million to $150 million will have until November 1, 2025 to apply to the program.
- Projects with a capital investment of more than $150 million will have until November 1, 2030 to apply to the program.
- At the end of the tenth year, the program application period ends and no new applications to the program will be accepted.
Amount of the Grant
The amount of grant funding that a project may receive equals to 12% of Total Eligible Capital Cost.
