Renewed carbon footprint approval means country’s canola exporters have unrestricted access to EU’s biodiesel market
Canadian canola growers will continue to have unfettered access to the European Union’s biodiesel market.
As of Jan. 1, all EU biodiesel must demonstrate greenhouse gas reductions greater than 50 percent compared to fossil diesel.
Until the end of 2017, the threshold had been 37 percent and all canola/rapeseed-based biodiesel received a higher value than that.
But the European Commission decided to up the ante and require different carbon footprint calculations for every separate region in a country where canola is produced.
The commission recently announced that Canada’s submission had been approved. The decision is valid for five years.
Feedstock exporters that do not meet the new standard will lose access to the EU’s biodiesel market, so the stakes are high.
“This decision means continued access to an important market for Canadian canola,” Jim Everson, president of the Canola Council of Canada, said in a news release.
“The EU is far ahead of North America in using renewable fuels, which creates a good export opportunity for us.”
Canada shipped 759,060 tonnes of canola seed to the EU in 2016-17, amounting to seven percent of total exports that year.
Exports of seed, oil and meal to the EU have averaged $200 million annually over the past three years. The vast majority of the canola Canada ships to the EU is used for biodiesel production.
Brian Innes, vice-president of public affairs with the council, said the council worked with the federal government for two years on Canada’s submission.
“We don’t see this announcement as growing the market. What we see is that this announcement enables us to continue serving this market,” he said.
“It’s the type of success that everyone in the value chain benefits from.”
Innes acknowledged some other biodiesel feedstocks might not make the cut, which could present an opportunity for more sales into Europe.
The bad news is that biodiesel production is expected to contract in the EU, according to the European Commission’s recently released EU Agricultural Outlook report.
The commission forecasts biodiesel production of 12.3 billion litres in 2030, a nine percent decrease from 2017 levels.
That is largely because Europeans are expected to use less fuel as they drive more fuel-efficient cars and increasingly take mass transit.
Road transport fuel use is expected to decrease by 13 percent for gas and 11 percent for diesel by 2030, according to the report.
That will have a big impact on rapeseed/canola demand because the crop accounts for 62 percent of the vegetable oils used for biodiesel production in the EU.
The other bad news for the rapeseed/canola sector is that the share of vegetable oils in the biofuels complex is expected to decrease in favour of waste oils and residues.