Canada Markets
Canola Oil Exports to US Not Likely at Risk During USMCA Talks
2/25/2026 | 1:11 PM CST
By Mitch Miller, DTN Contributing Canadian Grains Analyst
With the next number of months likely being spent enduring a renegotiation of the USMCA agreement -- and history suggesting it will be volatile and often threatening -- it is important to have some of the facts ahead of time, as plenty of false information is sure to come.
Canola oil trade between countries is a prime example of why so many on both sides of the border want the exempt status to remain for agricultural trade. DTN Ag Policy Editor Chris Clayton reported on U.S. support in his recent post: .
There is a mutually beneficial trade between countries where Canada exports the bulk of its canola oil to the U.S. as either refined or crude canola oil and then imports a significant amount of refined diesel or biodiesel in return.
In fact, Canada accounts for the bulk of exports of U.S. renewable diesel, with 74% of August shipments destined for Canada. Biodiesel was much the same prior to it being phased out, with a record high of 939,000 barrels (82.3% of the month's exports) being shipped to Canada in April 2023. As seen in the accompanying chart, Canadian imports of U.S. renewable diesel and biodiesel have been as high as 2.884 billion pounds in 2023, with the total pulling back over the past few years as biodiesel is being replaced by the renewable version.
Supporting the theory of free trade, it's also worth noting the additional benefits of the profits generated by U.S. biofuel producers on processing all the Canadian canola oil that doesn't get returned to Canada, but helps keep the domestic diesel prices down instead. Again, making it very easy to understand why many in the U.S. would not want to see any tariff-related trade disruption either.
On the Canadian side of the border, the success story of a greatly expanded canola crush industry was almost entirely built on supplying the U.S. with canola oil to help feed growing biofuel demand. In fact, the share of crude and refined canola oil that was exported to the U.S. versus total exports rose from 62.2% in 2015 to 95.4% by 2024. It fell back to 76.7% in 2025 while the U.S. biofuel industry remained in limbo, waiting for clarification on blending mandates and tax credits. But those are expected to be resolved soon.
The mutual benefits should help prevent an adverse outcome in the renegotiation of the USMCA agreement, but the entire consideration of the risks involved should be a wake-up call for Canadians. As a long-term goal, now that renewable diesel is so much more sustainable and practical than biodiesel, most of that production could and should be done within Canada to limit future risks.
Taking a step back to make sure readers are clear, renewable diesel is a synthetic diesel manufactured through a hydrogenation process using vegetable oil, such as canola oil, as a base feedstock. The chemically altered product is exactly like carbon-based diesel in every way, allowing 100% renewable diesel to be used with no changes required, in any environment. As many recall, biodiesel was a simple blend of vegetable oil and carbon-based diesel that not only limited the amount used but also had the horrible side effect of gelling and plugging filters (among other issues). As such, biodiesel is being phased out and replaced with renewable diesel -- the sooner the better.
As many may know, Imperial Oil recently completed its new renewable diesel refinery in Strathcona County, Alberta, and began production in August 2025. It reportedly has a maximum capacity to produce up to 20,000 barrels per day (3.18 million liters per day) or roughly 1.16 billion liters per year. With that being about 2.26 billion pounds per year, it should help reduce our reliance on canola oil exports and renewable diesel imports.
And the topic isn't just a Canadian consideration. As highlighted in last week's post at , the U.S. is already well on its way to the desirable goal of growing its soybean crush sector and providing additional soybean oil as a feedstock for a growing renewable diesel production industry, all while reducing dependency on soybean exports that can be heavily impacted by politics.
In a perfect world, renewable diesel will be key to a much more stable and profitable oilseed sector on both sides of the border with less reliance on exports or each other, yet allowing for mutually beneficial trade to provide a cushion where needed.
I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.
Mitch Miller can be reached at [email]mitchmiller.dtn@gmail.com[/email]
Follow him on social platform X @mgreymiller
(c) Copyright 2026 DTN, LLC. All rights reserved
For the following chart...
With Canada doing the Canadian thing -- exporting canola oil to the U.S. to be processed, then importing the finished product (with combined renewable diesel and biodiesel imports seen here) -- it's obvious why so many in the U.S. also want the USMCA agreement to be left intact. (DTN chart, Statistics Canada data)?
Canola Oil Exports to US Not Likely at Risk During USMCA Talks
2/25/2026 | 1:11 PM CST
By Mitch Miller, DTN Contributing Canadian Grains Analyst
With the next number of months likely being spent enduring a renegotiation of the USMCA agreement -- and history suggesting it will be volatile and often threatening -- it is important to have some of the facts ahead of time, as plenty of false information is sure to come.
Canola oil trade between countries is a prime example of why so many on both sides of the border want the exempt status to remain for agricultural trade. DTN Ag Policy Editor Chris Clayton reported on U.S. support in his recent post: .
There is a mutually beneficial trade between countries where Canada exports the bulk of its canola oil to the U.S. as either refined or crude canola oil and then imports a significant amount of refined diesel or biodiesel in return.
In fact, Canada accounts for the bulk of exports of U.S. renewable diesel, with 74% of August shipments destined for Canada. Biodiesel was much the same prior to it being phased out, with a record high of 939,000 barrels (82.3% of the month's exports) being shipped to Canada in April 2023. As seen in the accompanying chart, Canadian imports of U.S. renewable diesel and biodiesel have been as high as 2.884 billion pounds in 2023, with the total pulling back over the past few years as biodiesel is being replaced by the renewable version.
Supporting the theory of free trade, it's also worth noting the additional benefits of the profits generated by U.S. biofuel producers on processing all the Canadian canola oil that doesn't get returned to Canada, but helps keep the domestic diesel prices down instead. Again, making it very easy to understand why many in the U.S. would not want to see any tariff-related trade disruption either.
On the Canadian side of the border, the success story of a greatly expanded canola crush industry was almost entirely built on supplying the U.S. with canola oil to help feed growing biofuel demand. In fact, the share of crude and refined canola oil that was exported to the U.S. versus total exports rose from 62.2% in 2015 to 95.4% by 2024. It fell back to 76.7% in 2025 while the U.S. biofuel industry remained in limbo, waiting for clarification on blending mandates and tax credits. But those are expected to be resolved soon.
The mutual benefits should help prevent an adverse outcome in the renegotiation of the USMCA agreement, but the entire consideration of the risks involved should be a wake-up call for Canadians. As a long-term goal, now that renewable diesel is so much more sustainable and practical than biodiesel, most of that production could and should be done within Canada to limit future risks.
Taking a step back to make sure readers are clear, renewable diesel is a synthetic diesel manufactured through a hydrogenation process using vegetable oil, such as canola oil, as a base feedstock. The chemically altered product is exactly like carbon-based diesel in every way, allowing 100% renewable diesel to be used with no changes required, in any environment. As many recall, biodiesel was a simple blend of vegetable oil and carbon-based diesel that not only limited the amount used but also had the horrible side effect of gelling and plugging filters (among other issues). As such, biodiesel is being phased out and replaced with renewable diesel -- the sooner the better.
As many may know, Imperial Oil recently completed its new renewable diesel refinery in Strathcona County, Alberta, and began production in August 2025. It reportedly has a maximum capacity to produce up to 20,000 barrels per day (3.18 million liters per day) or roughly 1.16 billion liters per year. With that being about 2.26 billion pounds per year, it should help reduce our reliance on canola oil exports and renewable diesel imports.
And the topic isn't just a Canadian consideration. As highlighted in last week's post at , the U.S. is already well on its way to the desirable goal of growing its soybean crush sector and providing additional soybean oil as a feedstock for a growing renewable diesel production industry, all while reducing dependency on soybean exports that can be heavily impacted by politics.
In a perfect world, renewable diesel will be key to a much more stable and profitable oilseed sector on both sides of the border with less reliance on exports or each other, yet allowing for mutually beneficial trade to provide a cushion where needed.
I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.
Mitch Miller can be reached at [email]mitchmiller.dtn@gmail.com[/email]
Follow him on social platform X @mgreymiller
(c) Copyright 2026 DTN, LLC. All rights reserved
For the following chart...
With Canada doing the Canadian thing -- exporting canola oil to the U.S. to be processed, then importing the finished product (with combined renewable diesel and biodiesel imports seen here) -- it's obvious why so many in the U.S. also want the USMCA agreement to be left intact. (DTN chart, Statistics Canada data)?