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Cielo to turn construction waste, railway ties into biofuel

Using tech from Expander Energy, Cielo plans to produce greener diesel, SAF at 2 Alberta sites

Cielo is sourcing wooden railway ties from Canadian Pacific Railway as a source of renewable fuel. (Courtesy Cielo Waste Solutions Corp.)

Calgary-based Cielo Waste Solutions Corp. has secured the technology needed to produce biofuels made from wood byproducts at two Alberta sites. Now, the firm has its eye on expansion into the U.S.

“We’re a little bit of a unicorn because we’re not using a food source to create a fuel,” Ryan Jackson, CEO of Cielo, said in an interview with Sustainable Biz Canada.

Unlike its industry peers that rely on crops for oil (corn, soy, canola), Cielo uses wood byproducts, overcoming a supply bottleneck problem Jackson believes will arise in the future, and thus restrict the supply of renewable fuel.

The waste-to-fuel company licensed the Enhanced Biomass To Liquids (EBTL) technology from fellow Calgary firm Expander Energy Inc. in November 2023 for use in the Alberta hamlets of Carseland and Dunmore.

At its Carseland project scheduled for commissioning and operations in fall 2026, Cielo plans to produce its Bio-SynDiesel, a low-carbon fuel that can be used to make cleaner-burning diesel, sustainable aviation fuel (SAF) and marine fuel.

In Dunmore, its proximity to a Canadian Pacific Railway mainline will be key, as Cielo plans to source wooden railway ties as a feedstock for EBTL, also to make Bio-SynDiesel. The Dunmore project is anticipated for commissioning and operations in the fall of 2027.

Cielo’s biofuel ambitions

Jackson outlined Cielo’s major steps since its founding in 2011, particularly the acquisition of a research and development facility in 2016. There, the company turned an existing biodiesel plant in Aldersyde, Alta. into a site to test its design for a commercial facility.

After acquiring the license to use Expander Energy’s EBTL, Cielo embarked on its plan to develop Carseland and Dunmore.

At Carseland, just outside Calgary, EBTL will be used to turn wooden construction waste into Bio-SynDiesel. It is planned to be adjacent to the Rocky Mountain Clean Fuels Synthetic Fuel Facility.

In Dunmore, close to Medicine Hat, EBTL will be used to convert 500,000 to one million wooden railway ties per year into Bio-SynDiesel. Jackson said Cielo has secured an agreement with Canadian Pacific Railway to source the wooden railway ties.

The decision to license the technology was made because the “the amount of time to develop the existing technology that Cielo had wasn’t going to line up with the feedstock milestones that we needed to hit,” according to Jackson. The Expander Energy technology would allow Cielo to commercialize quickly.

The Cielo CEO said the company acquired the Carseland site via a transaction with Expander Energy, and has a lease with Alberta Infrastructure to situate it on a 25-acre plot. By comparison, Dunmore will sit on an 88-acre parcel of land, with the facility taking up 40 acres.

The Carseland facility is expected to produce 8.2 million litres of Bio-SynDiesel per year, while Dunmore is projected to generate approximately four times as much at 34 million litres per year.

Investor interest in Cielo’s projects has come from institutions and family offices, Jackson said.

He would not disclose the amount of investment needed for its two projects, but said most of Cielo’s projects will be done in partnerships or joint ventures.

Cielo’s next major step is closing the $5-million convertible debenture offerings for the Carseland project.

Plans for North American growth

Jackson’s expectation is to see Cielo grow over the next 18 months and bring in over $20 million in revenue per year in the next 24 months.

The company is in discussions with more companies in the railway ties and wood byproducts space to acquire additional feedstock.

After its Carseland and Dunmore projects, Cielo plans further expansion in North America.

Cielo’s intent is to have six facilities in Canada and the U.S. within the next five years using the Expander Energy technology. Locations are being scoped, and Cielo is examining regulations in both countries.

Jackson would not disclose where Cielo is considering for its other four facilities, saying it is too early to publicly announce the information.

He said Cielo is on track to meeting its goals, despite some roadblocks.

“We had a little bit of a stumble way back in the day but we have a number of initiatives now and we have all of the appropriate people engaged. We expect that everything we’ve mentioned as it relates to our timeline or expectations and production, that we’ll meet or exceed those.”

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