Canola oil use for US biomass-based diesel production – as well as canola oil imports - are trending lower amid the uncertainty surrounding American biofuel policies, according to the USDA.
In its monthly Oil Crops Outlook on Monday, the USDA said canola oil use in biofuel production fell to 192.6 million lbs in January, a drop of almost 332 million or 63% from just a month earlier. Meanwhile, the lower use in biofuel production led to reduced imports of canola oil, which are primarily sourced from Canada. US canola oil imports totaled 2.8 billion lbs for the October–February period, down 3% from the same period last year, and as shown on the graph below.
Last month, US President Donald Trump asked big oil and biofuel groups – which are typically at loggerheads over biofuel policy – to jointly hash out new mandates for 2026. Reports suggest the two groups have jointly recommended to the US Environmental Protection Agency that federal mandates for biomass diesel blending for 2026 be set at 5.25 billion gallons, up sharply from 3.35 billion for the current year.
That increase could help reverse the downward trend in Canadian canola oil exports to the US, although shipments may still be hampered by the fact the US announced in January that canola-based biofuel does not currently qualify for the so-called 45Z tax credit. Without the credit, it is more difficult for canola to compete against other biodiesel feedstocks, including soybean oil, used cooking oil, and tallow.
Click here to see more...