Mackenzie County has finalised an agreement with Calgary-based PowerWood Canada Corp that will bring two pioneering wood pellet manufacturing facilities to the northern Alberta region in Canada, representing hundreds of millions of dollars in private investment and the potential for up to 300 direct jobs.
The announcement, made by Mackenzie County Reeve Josh Knelsen, marks what the company describes as a first-of-its-kind project in Canada, utilising wildfire-damaged wood to produce clean energy as an alternative to coal.
"We will be using tried-and-tested steam explosion method for converting this firewood into black pellets," said PowerWood Canada Corp CEO David Peters, adding that potential buyers in Japan have already expressed interest in purchasing the pellets for use in their power plants.
The facilities will introduce Canada's first steam explosion pellet production process, developed by industrial systems engineers Valmet, capable of producing black wood biofuel pellets with 94% less carbon release than coal. Similar plants are currently operating in France, Norway, and Malaysia, with additional facilities under construction across Europe and Asia.
The first site, dubbed the 'Peace River' facility, is located east of La Crete along the Highway 88 connector. Earthworks have recently been completed on 65 acres of prepared land, with the location described as "shovel-ready" with services already in place. Construction is expected to commence by mid-2026.
A second facility is planned south of High Level along Highway 35, which will be used for shipping finished product by rail and will also house a second production operation.
Raw materials and market
PowerWood Canada has secured long-term renewable Crown forestry licences to source raw materials from millions of hectares of Albertan forest containing a 15-20-year supply of fire-damaged timber. The company has agreed terms with a major Japanese buyer for 100% of the output from its Peace River plant on a long-term basis.
The project is expected to create more than 500 jobs across the entire supply chain, with employment opportunities spanning forestry, construction, transportation, and local businesses. Construction of the Peace River facility will be undertaken by WB MelBack Corp.
PowerWood Canada, a subsidiary of UK-based CoAlternative Energy Ltd, plans to list on the Toronto Stock Exchange in 2026, coinciding with the installation of its inaugural production facility.
Timing and context
The announcement comes at a challenging time for the region's forestry sector. West Fraser recently announced plans to curtail operations at its High Level OSB mill beginning in spring 2026, citing weak demand for oriented strand board.
In a joint statement released in December last year, Reeve Knelsen and High Level Mayor Josh Lambert expressed deep concern over the West Fraser closure, noting it would affect many workers, families, and businesses across northwest Alberta.
Addressing these concerns in his statement, Reeve Knelsen acknowledged: "I also know this announcement comes at a time of uncertainty for some in our region. Recent announcements by West Fraser regarding future curtailments have raised understandable concerns for workers and families who have long been the backbone of our forestry communities."
He added: "This project does not replace those jobs overnight, but it is encouraging news and a step towards diversification and long-term resilience in our forestry economy."
Regional diversification
The wood pellet facilities represent a new value-added energy stream for Mackenzie County, complementing the region's existing oil and gas, forestry, and agricultural sectors.
Reeve Knelsen thanked Council, administration, industry partners, and residents across the region for their hard work in advancing the project.
The development is part of a broader expansion plan by PowerWood Canada, which has announced intentions to build additional plants in New Brunswick and Nova Scotia.
Mackenzie County secures major wood pellet investment
