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Canadian Chemical Hub Looks to Greener Chemicals Amid Carbon Tax

Canada has increased pressure on carbon-intensive industries β€” and provides incentives for cleaner alternatives.

Last year, a Canadian biotech company opened a new facility to convert sugar into chemicals in the hub of the country’s chemical industry.

But as Ontario's government implements a cap-and-trade policy on carbon dioxide emissions, Reuters reports that BioAmber is considering a second, much larger facility in Sarnia, Ont. β€” and that local officials hope it will facilitate the city's transformation from conventional, carbon-intensive production to greener sources of chemicals.

The company expects to announce a decision on the location of the $500 million second plant early next year. It is also considering a site in Louisiana β€” which the Obama administration backed with $360 million in loan guarantees from the Energy Department β€” but the choice between the two nations changed dramatically in recent days.

As Canada increases pressure on carbon-intensive industries β€” and provides incentives for cleaner alternatives β€” the president-elect of the U.S. previously called climate change a "hoax." The Republican-controlled Congress, meanwhile, is unlikely to support tax benefits based on environmental considerations.

BioAmber indicated that it is waiting to hear back from officials in Canada about a competing incentive package.

The company's initial plant in Sarnia, which opened last August, converts glucose sourced from nearby agricultural suppliers into succinic acid, which can be used as feedstock for chemicals in plastics, coatings, paints, flavorings, personal care products and other industries.

The process costs less than making those chemicals from petroleum and equates to a 100 percent reduction in greenhouse gas emissions.

Officials from Sarnia, which lies across the St. Clair River from Michigan, are wary of the rising cost of carbon and see the new plant as a way to increasingly diversify the city's economy. The area reportedly accounted for some 16 percent of Canada’s industrial emissions in 2014.

"If they want to make the carbon price and the green economy work, they've got to invest in places like Sarnia," Mayor Mike Bradley told Reuters.

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