Canola in flower - LNN

By Alice McFarlane

BIOFUEL STANDARDS

Canadian canola exports could increase on bio-diesel demand

May 3, 2021 | 3:26 PM

MELFORT, SASK. — Canada has been selling more canola seed to the European Union. The canola is crushed and used as a bio-diesel feedstock.

Canola has competition for that market from soybean, palm oil and domestic European rapeseed.

The EU is tightening its biofuel standards which could be good news for Canadian canola exports.

Canola Council of Canada vice-president of public affairs Brian Innes said the EU will phase out biofuel subsidies for product made with palm oil by the end of the decade.

Belgium recently notified the EU of its intention to ban biofuel from both palm and soybean oil from biofuels, effective January 1, 2022.

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Innes said the main criticism of palm oil is how it is produced in areas that are sensitive for carbon emissions.

“For example, cutting down forests and planting palm plantations. That’s the same thing that drove the Belgian political ministers to exclude soybean from any biofuel programs in Belgium,” Innes said. “The Europeans are putting a focus on how crops reduce greenhouse gas emissions, as well as how those crops are produced sustainably in a way that’s not taking forest, or other sensitive land, out of production.”

Innes said the measures are largely driven by European consumers who want the crops used for biofuels produced sustainably.

Unfortunately, part of what we’ve seen happen both with palm oil as well as soybean oil is when there are a few bad actors the crops are excluded entirely from biofuel use,” Innes.

Canadian canola has a much better environmental reputation. Innes said it’s important the Canadian canola industry pay close attention to what is happening in other countries.

“We have very sustainable agriculture here in Canada. For the canola we send to Europe, it’s all certified as sustainable, meaning that our farmers need to meet the requirements of the European Commission that is audited and verified, in conjunction with the grain companies who are servicing that market,” Innes said.

Biofuel policies flow from consumers interested in improving the environment. Innes said Canada needs to make sure it is doing what’s required.

“This shows a bad reputation can have a real impact,” Innes said.

The EU biodiesel and renewable diesel sectors consumed an estimated 6.1 million tonnes of canola and rapeseed in 2020. That compares to 2.4 million tonnes of palm oil and 900,000 tonnes of soybean oil.

Innes said two-thirds of all European rapeseed production goes to the biofuel market.