Canola Demand Could Jump 2.7M Tonnes on Co-Processing

[wheatking16]

Today's Daily Kernel has some articles that I found interesting.

Canola demand and equipment scams.

Of course, I picked them, so my bias is in.


[url]https://www.dailykernel.ca/p/canola-demand-could-jump-2-7m-tonnes-on-co-processing[/url]

The Big Bin: Refiners Just Found a Back Door Into Canola

Remember last week, when we told you one in every three canola acres already ends up in a fuel tank?

Turns out that was only the first engine.

Here's the second one.

What happened. At Seeds Canada's annual meeting, biofuel folks laid out the math on co-processing — and it's a big number. If refiners in Ontario and Western Canada ran just 10% co-processing in their catalytic crackers and 5% in their hydrotreaters, it would create a brand-new market for 2.7 million tonnes of canola oil a year.

That's roughly five crush plants' worth of demand — conjured out of refineries that already exist.

Why it happened. Co-processing is the lazy-genius version of biofuel. Instead of building a billion-dollar renewable diesel plant, a refiner just pours refined, bleached and deodorized canola oil into the crude stream and runs it through the units it already owns. Out the other end comes lower-carbon gasoline, diesel and jet fuel — plus carbon credits under the Clean Fuel Regulations.

? Already an approved CFR pathway. ? Federated Co-operatives' Co-op Refinery Complex in Regina has completed trials on its cat cracker and hydrotreater. ? Industry chatter says there isn't a refiner in Canada that isn't at least testing it. ? Scale-up potential: nearly 2 billion litres of lower-carbon fuel a year with modest upgrades.

What it means for the farm gate. Crushers have already dropped $2 billion to expand Canadian crush capacity by 40% — a bet that looked a little lonely when Regina's big renewable diesel build got paused. Co-processing is how that capacity gets fed without anyone breaking ground on a new plant.

More domestic crush demand means a firmer basis, less of your canola riding a boat to a customer who may or may not like us that month, and a floor under Nov futures that isn't spelled C-H-I-N-A. That's a demand story you can farm around.