Dow delays US$11 bn Canadian project; cites market uncertainty

US firm Dow Chemical is delaying the construction of its US$11.6-billion Canadian Path2Zero petrochemical project, situated in Fort Saskatchewan, Alberta, citing global economic uncertainty and market volatility. The flagship blue hydrogen-based complex will be delayed by up to two years, according to Dow CEO Jim Fitterling.

Path2Zero was to have been the world’s first net-zero ethylene cracker and derivatives site with Scope 1 and 2 emissions eliminated.

The project includes a hydrogen-powered ethylene cracker and a carbon capture and sequestration system, intended to decarbonise 20% of Dow’s global ethylene capacity as well as add 1.8 million tonnes of ethylene capacity in a phased manner through 2030, while growing PE supply by about 15% to 2 million tonnes/year.

At the heart of Path2Zero is a large-scale blue hydrogen facility, designed to fuel Dow’s new ethylene cracker and existing operations in place of natural gas. Built and operated by industrial gas major Linde, the plant will combine hydrogen production with carbon capture and storage.

Phase one of the development was due in 2027 before expanding in 2029.

However, the firm delayed construction of the development, citing concerns over global economic conditions and the impact of US tariffs. As a result of the delay, Fitterling said it would save US$1billion in 2025 in capital expansion.

Earlier in April, Dow issued a statement when announcing its results, “Following a comprehensive review, Dow has decided to delay construction of its Path2Zero project in Fort Saskatchewan, Alberta, Canada until market conditions improve. The company now expects Dow’s total enterprise 2025 CapEx to be US$2.5 billion compared to its original plan of US$3.5 billion. Dow remains committed to its Path2Zero project and the growth upside it will enable in targeted applications like pressure pipe, wire and cable, and food packaging. The project is being built at an existing Dow site in a significantly cost-advantaged region. It is expected to be a first quartile asset with attractive returns and the added benefit of being the world’s first net-zero Scope 1 and 2 emissions integrated ethylene cracker and derivatives facility.”

Originally announced in 2021 and greenlit in 2023, construction began in 2024, with operations expected to start in phases between 2027 and 2029. The project was backed by both federal and provincial support, including tax credits and an Alberta grant worth US$1.8 billion.

The delay comes as businesses navigate unpredictable markets, exacerbated by US tariffs and geopolitical shifts. Experts say companies are reluctant to commit capital to long-term projects under these conditions.

Despite the pause, Dow has reaffirmed its long-term commitment to the project. The Alberta government echoed that optimism, emphasising the project’s economic importance and job potential, with 8,000 construction jobs and 500 permanent roles on the line.

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