Farmers Want Stable Canola Demand – Domestic Biofuels Market is Key

Trade Wins & the Need for Market Diversification: Lessons from the Canola Tariff Breakthrough

After months of uncertainty, we are pleased to report positive developments on the trade front. Prime Minister Carney and Premier Moe’s diplomatic visit to China in January 2026 resulted in a resolution that led to a reduction in China’s canola tariffs—read this news release for greater detail on this file. While this is welcome news, it has also highlighted the risks of relying too heavily on only a couple of export markets.

In today’s global trade environment, market diversification is more important than ever. Over the past year, canola—one of our largest export crops—has faced significant market risk. The recent tariff ruling confirms that depending on foreign buyers leaves us vulnerable to unpredictable policy changes. That’s why expanding domestic demand, especially biofuel, is crucial. Unlike exports, local biofuel markets can’t be affected by foreign tariffs.

Crush It: Renewable Diesel Changes the Canola Demand Picture

The renewable diesel industry is reshaping canola demand across North America. Fuel producers are seeking ways to reduce carbon emissions, and canola-based renewable diesel stands out as the best option. This next-generation fuel works seamlessly with existing engines, even in cold weather, and canola’s naturally low carbon intensity gives it a competitive edge over other crops. This is an advantage sitting right in our fields.

Currently, about 30% of Canadian canola seed is used for renewable diesel, but much of it is processed abroad due to a lack of domestic policies supporting local production. A strong national biofuel policy—similar to the US Renewable Fuel Standard—could transform this advantage into meaningful demand, as American corn farmers saw their incomes soar after similar regulations were introduced.

Meeting the Moment: Modernized Clean Fuel Regulations Needed to Stabilize Canola Demand

Canada’s Clean Fuel Regulation (CFR) holds promise for canola. With a modernized CFR, farmers can benefit from price premiums for low-carbon intensity canola, while prairie economies would attract new investment in crushing and refining facilities. The key is predictability: a robust policy means steady demand and real income growth for farmers.