In agriculture, finding a new use or market is typically a win-win. In the case of canola, the meal created after the oil extraction makes great dairy cattle feed. The oil itself also has several uses, including as cooking oil or as a feedstock for biofuel. In fact, even used canola oil can also become biofuel.
That seems an excellent story when looking at the potential for using both canola oil and used cooking oil, for example, as feedstock for biofuel generation in the United States. However, if a new law ends up passed with a highly specific, country-of-origin requirement for biofuel feedstock, Canadian canola could end up as collateral damage.
The rule in question is 45Z, which is part of the Inflation Reduction Act in the U.S. As Chris Vervaet, executive director of the Canadian Oilseed Processors Association explains, Canadian canola has a hard road ahead to ensure its access into the U.S. is not cut off in an effort to curtail imports of other undesirable feedstocks from overseas.
It’s a complicated but important issue for the Canadian canola industry, Vervaet says, as the biofuel market is a vital one for supporting domestic crush here in Canada. Depending on the definition of “domestic feedstock,” the final language of 45Z could create a major hurdle for Canadian canola, one that may require using other trade agreements or policy avenues to create a carve-out for Canadian product.
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