Crofton, Vancouver Island
A possible second site at the former Domtar pulp mill, making hydrogen on Vancouver Island for Island customers. It is under consideration; no decision to buy the site has been made.
Why Crofton
A closed pulp mill that already has grid power, a deep-water port, a gas line and wood-waste handling, close to the Island's ferries, navy base and mills.
See the detail
PDEC is a network of sites. Each site serves the customers near it, and the sites work together.
Vancouver Island geography
Making hydrogen on the Island supplies Island customers directly. Deliveries do not need a barge across the Strait of Georgia.
Infrastructure already built
A 138 kV grid connection, a 61.5M m³/yr water licence, a deep-water dock, a FortisBC gas pipeline and biomass handling are all on site. The site is already developed.
Independent economics
Crofton and Burrard each pay their own way. Savings from running them together are a bonus.
Proposal
The same three production methods as Burrard, sized to serve Vancouver Island from the Island instead of barging hydrogen across the Strait.
See the detail
Three ways of making hydrogen, all running from day one. Each uses what the site already has.
PEM Electrolysis
Share: 50%
Output: 11,453 kg/day
32 MW on the BC Hydro 138 kV connection. The grid is 98% clean.
Methane Pyrolysis
Share: 30%
Output: 7,500 kg/day
~7.5 TPD Ekona xCaliber on the existing FortisBC pipeline. Also makes solid carbon.
Biomass + BECCS
Share: 20%
Output: 5,000 kg/day
~5 TPD from coastal slash piles (logging waste). With BECCS, it removes more carbon than it emits.
Production and revenue
Power, gas and wood waste go in. Hydrogen, fuels made from hydrogen and co-products come out, and each earns money.
Read left to right: what goes in, how the hydrogen is made, what comes out, and who buys the hydrogen. Some hydrogen is made into e-fuels (methanol, bio-LNG, renewable diesel); that margin shows as its own product. Band widths are revenue in millions of CAD a year; yellow bands are hydrogen.
Economics
Crofton earns about the same as Burrard and pays back PDEC's share of the build in about five years.
See the detail
Phase 1 base case. All figures in CAD.
Pathway economics
| Pathway | Share | Output (kg/day) | Gross LCOH | Net LCOH |
|---|---|---|---|---|
| PEM Electrolysis | 50% | 11,453 | $4.46/kg | $4.46/kg |
| Methane Pyrolysis | 30% | 7,500 | $5.50/kg | $2.50/kgafter carbon sales |
| Biomass + BECCS | 20% | 5,000 | $4.00/kg | $2.30/kgafter biochar and stored carbon |
| Blended | 100% | 23,953 | $4.68/kg | $3.44/kg |
Capex
PDEC revenue (base case, per year)
| H2 sales (8.74M kg at $6.50/kg blended price) | $56.8M |
| BC Low Carbon Fuel Standard credits | $9.0M |
| Solid carbon byproduct | $8.2M |
| Clean Fuel Regulations dispensing credits | $5.2M |
| BC OBPS credits | $5.0M |
| District heat | $4.5M |
| Grid services | $3.0M |
| Oxygen byproduct | $2.8M |
| Sequestered CO2 credit | $2.6M |
| E-fuel margin | $2.0M |
| Property tax abatement | $1.5M |
| Pyrolysis cogeneration power | $0.7M |
| Biochar byproduct | $0.5M |
| Total PDEC revenue | $101.8M |
| Plus diesel savings kept by customers (above the $6.50/kg price) | +$37.4M |
| Plus social value (lower carbon and health costs) | +$67.7M |
| Total value created per year | $207.0M |
PDEC revenue is what PDEC earns. Diesel savings go to customers and social value goes to the public. Both come on top of PDEC's sale price.
Environmental impact
Customers
BC Ferries, the navy at Esquimalt, Island transit and local industry. Island demand is larger than what Phase 1 would make.
See the detail
At PDEC's $6.50/kg blended price, Vancouver Island customers could use about 38,500 kg/day, more than Phase 1 makes. These are estimates from fleet sizes. No contracts are signed.
Marine & ferry
BC Ferries Route 6, a possible first pilot, with its terminal at the mill gate. MV Coho. Canadian Coast Guard Pacific. Industrial marine users.
Transit & road
Cowichan Valley Regional Transit (its Duncan depot is ready for natural gas buses, CNG). Victoria Regional Transit. Heavy fleets of the CRD, CVRD and RDN regional districts. Mosaic forestry trucks. BC Emergency Health Services (BCEHS) and Island Health.
Industrial
Western Forest Products in Chemainus (hydrogen blended into kiln fuel). Catalyst Paper in Port Alberni. Coastland Wood. FortisBC gas blending.
Defence, federal & flagship
GVHA Ogden Point cruise terminal: a hydrogen power barge could replace the $159M shore power project that was dropped. CFB Esquimalt. CFB Comox. CCG Pacific. DFO, RCMP, ECCC.
Price is the barrier. Operators switching to batteries are turning down hydrogen at its $16.50/kg retail price. PDEC sells at $6.50/kg on average ($5.75 at the gate, $7.625 delivered). That is 60% below retail and about 13% below the diesel it replaces, so hydrogen comes out ahead. PDEC builds the supply, and demand follows.
First Nations
Local First Nations are offered an ownership stake from the start, and the site is planned with them, not around them.
See the detail
The Crofton site is on unceded Quw'utsun territory. Halalt, Cowichan Tribes, Penelakut and Lyackson hold interests in it. Indigenous partnership is built into the project from the start.
Cowichan 2025 decision
Cowichan Tribes v. Canada (AG), 2025 BCSC 1490, is the first Canadian ruling to recognize Aboriginal title over privately owned (fee-simple) land. It changes how any industrial land purchase in BC has to be structured.
Equity partnership
The goal is 25-49% Indigenous ownership, financed through the federal $10B Indigenous Loan Guarantee Program and BC's $1B Equity Financing Framework. Kruger Kamloops and Hydrogen Naturally Fort Nelson are precedents.
How we engage
Dr. Matt Murphy (UVic Gustavson, Balance Co-Lab) leads the relationship, following free, prior and informed consent (FPIC) protocols. Decisions on water and the weir go through the Cowichan Watershed Board. PDEC will not buy the site without an agreement that meets DRIPA.
Community
Jobs and tax revenue come back to a town that lost its mill, and Crofton village keeps a secure water supply.
See the detail
The mill closure put ~500 people out of work and took away the area's largest taxpayer. Whatever replaces it has to deal with jobs, taxes and the village water utility.
Jobs
About 55 full-time operations jobs once Phase 1 is running (from the model's staffing budget). There are also construction jobs, and ongoing indirect jobs in feedstock supply, maintenance and shipping. Mill workers' skills in process control, trades and power systems carry straight over to hydrogen.
Municipal tax base
Putting the site back into industrial use restores North Cowichan's largest single tax payment. The aim is for the site to again be the main local employer and taxpayer.
Village water utility
Domtar's commitment ends on Dec 31, 2026. PDEC proposes a funded handover to the right municipal body, agreed three ways with the CVRD and North Cowichan. PDEC would not run the utility long-term.
Cowichan Lake weir
PDEC proposes handing the weir and the water licence to the Cowichan Watershed Board. PDEC would buy its water under a commercial supply agreement.
Site infrastructure
Most of what a hydrogen plant needs is already on the site.
See the detail
Crofton is an existing industrial site. Decades of heavy-industry equipment and connections are still in service.
Electrical
Two dedicated 138 kV BC Hydro lines end at the site, ~9 km from Vancouver Island Terminal. No new substation to pay for.
Water
~61.5M m³/yr licensed on the Cowichan system. The Phase 1 electrolyzer needs <1% of that. The limit is seasonal drought.
Marine terminal
Three Panamax-capable berths on Shoal Island (136-163m length, 9.2-10.8m depth). Barges can link Crofton with the mainland site.
Natural gas pipeline
A FortisBC high-pressure pipeline is on site. It feeds pyrolysis, so no new pipeline or permit is needed.
Biomass handling
The mill ran on ~87% biomass energy, so bunkers, conveyors and dryers are already there. They can be adapted to make hydrogen from biomass.
Zoning & land
107 hectares (264 acres) of waterfront mill land zoned heavy industrial (about 121 ha with surrounding lands, per North Cowichan). North Cowichan's Official Community Plan (OCP) supports marine and industrial use. No rezoning needed.
Risks
The main risks at Crofton, and what PDEC does about each one.
See the detail
Click any card for detail on how PDEC handles each risk.
Environmental remediation
68 years of kraft pulp making. Under BC's Environmental Management Act (EMA), liability is absolute and retroactive. Cleanup is estimated at $40-85M. PDEC would handle it with indemnities, cleanup in stages under an Approval in Principle (AiP), pollution legal liability (PLL) insurance, and separate project companies that contain the risk.
Water licence transfer
The Water Sustainability Act (WSA) puts river flows for fish and nature first, and the Cowichan Watershed Board shares oversight. PDEC would monitor flows over several seasons and reuse wastewater. Seawater desalination (SWRO) is the drought backup.
Indigenous consent (critical path)
Since the 2025 Cowichan ruling, an Impact Benefit Agreement (IBA) that meets DRIPA is needed before construction debt. PDEC would offer 25-49% Indigenous ownership through the Indigenous Loan Guarantee Program (ILGP), follow FPIC protocols, and not buy the site without an agreement.
BC Hydro interconnection
The mill made much of its own power (load displacement). BC Hydro's CBLI System Impact Study confirms the grid can deliver the capacity. With three processes, PDEC does not rely on electrolysis alone.
Village water utility deadline
Handover is due Dec 31, 2026. PDEC would agree a transition plan with the CVRD and North Cowichan and fund the move. The utility would sit in a separate project company.
Supply chain lead times
Electrolyzer stacks take 18-24 months to arrive, and specialized transformers about the same. PDEC would order early, with part payment before the final investment decision (FID), and use two suppliers where it can.
Status
Under consideration. PDEC is studying the site with the community; no purchase decision has been made.
See the detail
Under consideration today. Early work is underway. Building would start in 2028, in phases.
Phase 0
Work with Nations toward an IBA. BC Hydro CBLI study. Phase I/II environmental site assessment (ESA). Water flow monitoring. Letters of interest from customers. Plan the village water handover.
Phase 1
Final investment decision (FID). Build all three processes: 32 MW PEM, 7.5 TPD pyrolysis and 5 TPD biomass with BECCS. BC Hydro upgrades. Start-up. First customers (Route 6 pilot, CVRT, WFP).
Phase 2
More customers (Victoria Transit, CFB Esquimalt, CCG, GVHA cruise terminal barge). Start barge runs to the mainland. Grow by-product sales.
Phase 3
Both sites run as one network. Green industrial products at export scale. More federal and defence commitments.
What PDEC needs next
Four contracts lock in the economics before anything is built. If you could sign one of them, or help find who will, a short call is the next step.
Customer contracts
Fleet, marine, port and industrial hydrogen buyers. They commit to buy a set volume at $6.50/kg, and the price never drops below $5.20/kg.
Off-peak power
BC Hydro. A supply agreement at about 5.5 cents a kilowatt-hour, with the plant running when power is cheapest.
Carbon buyer
Makers of steel, batteries, tires and building materials. They buy the solid carbon left when the plant splits natural gas, at $1,000 a tonne or better.
Anchor volumes
Transit, ferry and port operators. Committed volumes that keep the plant running at 85% of capacity.