Earlier this month the Environmental Protection Agency (EPA) released a proposal which could open the export doors even wider for Canadian canola producers. The proposed plan would recognize renewable diesel and jet fuel made from canola oil as “advanced biofuels” under the U.S. Renewable Fuel Standard (RFS).
The Canola Council of Canada (CCC) is enthusiastic about the announcement, as the move to advanced biofuels means the product can be combined with traditional diesel, producing a fuel with lower greenhouse gas (GHG) emissions.
“This is a different technology and different approach,” says Jim Everson, president of the Canola Council. “This is where canola oil goes right into the refining process. At a refinery it is mixed with the regular diesel stream coming from fossil diesel. The outcome of the product is chemically equivalent to petroleum diesel, but has much less GHG emissions because of the canola oil that’s been utilized.”
The U.S. plan will create more opportunities for refineries to create biofuel from expanded crop options than soybean oil. Canada also looks to widen its horizons as this proposal creates the opportunity for Canada to diversify the overall canola export market, opposed to heavily relying on exports to China in the form of food-grade canola oil.
Additionally, Everson explains that the U.S. proposes to accept canola oil opposed to raw seed. This creates another opportunity for Canada by means of new infrastructure projects. As it sits right now, Canada has 14 processing plants, however, several more have already been announced, mostly in southern Saskatchewan, and will be built over the next two to three years. These opportunities aren’t only relevant for shipping to the U.S., but also for use in our own refineries as well, Everson says.
“In Canada, there’s a clean fuel regulation that’s also being developed by the federal government. And that would create a kind of a similar process in Canada, where canola oil at a processing plant located near a growing area in western Canada would be used in the Canadian refinery process to produce renewable fuel.”
It is very possible we could see a healthy does competition come down the pipe as some producers south of the border may start seeding canola acres over other commodities due to the unforeseen, but optimistic, increase in demand for canola oil. Everson says however, that he isn’t overly concerned about the possible uptick in canola acres in the US as we’ll likely see the same trend play out here, in Canada, as well.
Everson says the proposal will likely go through the final steps in the coming weeks and months and expects to have a final approval this summer or towards the end of the year, with the initial announcement pointing towards July 2022 for it to be solidified.