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Canola sits on biofuel sidelines

Only 136 million litres of the 413 million litres of biodiesel used by Canadian drivers was canola-based in 2021.

WESTERN PRODUCER — Canada is using little canola-based biofuel, according to a new study.

One-third of all the biodiesel consumed in Canada and none of the renewable diesel used in this country is canola-based, according to the Biofuels in Canada 2022 study published by Navius Research Inc.

Only 136 million litres of the 413 million litres of biodiesel used by Canadian drivers was canola-based in 2021, compared to 213 million litres of soy-based biodiesel. The remainder was yellow grease, tallow and other feedstocks.

None of the 507 million litres of renewable diesel were canola-based. The leading feedstock for that fuel was used cooking oil, which accounted for 380 million litres, followed by tallow at 92 million litres.

The study was funded by Advanced Biofuels Canada.

Ian Thomson, president of Advanced Biofuels Canada, said it is important to understand the study measured use and not production.

A lot of Canada’s canola-based biodiesel is shipped to the United States because of trade flows and pricing issues and U.S. soybean-based biodiesel is imported to backfill, he said.

In the case of renewable diesel, there is no Canadian production yet. It is all imported from places like the U.S., Singapore and Europe to fulfil British Columbia’s low carbon fuel standard.

Thomson expected there will be way more canola-based biofuel use in Canada in the future, especially starting around 2027.

Several companies have announced renewable diesel projects to be built on the Canadian Prairies.

The latest announcement is from Reconciliation Energy Transition Inc., which hopes to build a $600 million plant near Calgary in conjunction with the Siksika Nation.

Federated Co-operatives Limited, Imperial Oil Limited and Parkland Corp. have also announced projects.

The oil companies are building the plants to comply with Canada’s new Clean Fuel Regulations (CFR) and crushers have responded by announcing they too will be expanding capacity.

The world has a limited supply of used cooking oil and tallow and he believes those two feedstocks are close to being tapped out.

“We’re not eating greasy food and slaughtering cattle for biofuels,” he said.

That bodes well for alternative feedstocks like canola and soybeans.

He said canola will see significant growth in demand in the next five years from the biofuel sector and a lot of that fuel will be consumed domestically due to the CFR.

World Agricultural Economic and Environmental Services released a report in December 2021, estimating the potential for canola-based biofuel production resulting from the CFR.

The report was released before the final regulations were published, but Thomson feels it still provides a good take on what could transpire.

Under the two most likely scenarios explored by the report’s authors, there could be between 500 and 800 million tonnes of canola oil used in biodiesel and renewable diesel by 2030, up from about 200 million tonnes today.

The demand looks relatively flat through 2026 and then starts increasing dramatically in 2027.

That is because the federal government agreed to grant refiners lower emissions reductions targets for the first three years of the regulation in return for a higher 2030 final emissions reduction target.

The concession allows them time to build renewable diesel plants and other infrastructure required to meet the targets.