“Remember carbon intensity because that’s the game changer,” said the president of the Canadian Fuels Association.
That factor will help determine the value of canola when large volumes of the crop are being consumed by the renewable diesel sector.
His member companies account for 95 per cent of Canada’s production of transportation fuels.
“We’ve got some work to do in terms of reducing our emissions,” he said.
Canola’s carbon intensity score is worse than competing feedstocks like soybean, animal fat and used cooking oil (UCO). That is primarily because the crop requires heavy doses of nitrogen fertilizer, which offsets its carbon sequestration benefits.
The other factor keeping canola’s score elevated is the lack of productivity gains. Average yields have been stuck around 40 bushels per acre for the past decade.
“Output is a big part of this carbon intensity equation,” said Vervaet. “We need more canola.”
Carbon intensity scores have a substantial impact on the bottom line for renewable diesel manufacturers because they collect credits amounting to about $100 for every tonne of carbon dioxide reduction.
A renewable diesel plant that produces one billion litres of the fuel per year could earn $248 million in credits for using UCO as its feedstock versus $146 million for canola.
“You bet they’re going to be looking for as much UCO as they can get their hands on,” said Vervaet.
The annual demand for biofuel in Canada is expected to reach 10 billion litres by 2030. That includes 3.5 billion litres of renewable diesel, a seven-fold increase over 2022 levels.
Manufacturers will be using a variety of feedstocks to produce that fuel and what they choose will be heavily influenced by the carbon intensity scores of those feedstocks.
“For us, that is very important, and we monetize that big time,” said Larocque.
Chris Vervaet, executive director of the Canadian Oilseed Processors Association, said the canola industry needs to roll up its sleeves and improve its score.
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