QUEBEC CITY – There is a significant new market for canola emerging south of the border, says a leading U.S. biofuel producer.
In August, Imperium Renewables Inc. opened the largest biodiesel plant in the United States. It uses only Canadian canola as its feedstock in a market that until recently had been the domain of soy oil.
“It has been great for us,” Brian Young, director of international business development with the company, told delegates attending the Canadian Renewable Fuels Summit.
Imperium’s new plant in Grays Harbor, Washington, is capable of producing 378 million litres of biodiesel annually. It now runs at 75 percent capacity but should hit full speed early in 2008.
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In an interview, Young said Imperium’s canola-based fuel is highly sought after by European customers.
“The soy guys are pretty envious because the margins are there. The market recognizes that a higher quality fuel gets a higher price at the pump,” he said.
“It has definitely opened up a lot of markets that we wouldn’t have if we were solely based on soy.”
Archer Daniels Midland is the only other major U.S. biodiesel manufacturer using canola as a feedstock. Its plant in Velva, North Dakota, is slightly smaller than Imperium’s facility.
Young expects more biodiesel companies will opt for canola when they see the premiums Europeans are willing to pay for canola biodiesel, which has superior cold flow properties compared to soy biodiesel.
Imperium is developing sites for three other plants the size of its Grays Harbor facility, one each for the U.S. east coast, Hawaii and Argentina.
Young said Canada was in the running for a plant but those plans was shelved due to the rapid appreciation of the Canadian dollar. But the company remains open to the idea of building in Canada.
“We’d like to find Canadian partners to move it along,” he said.
Imperium’s new facilities will use Canadian canola wherever feasible. It has filled most of its feedstock needs for 2008 but is interested in securing supply for 2009 and 2010.
Imperium doesn’t have a crushing plant. It buys processed canola oil and has it shipped by ocean vessel from Vancouver to its plant in Washington state. Young estimates the firm has already bought more than 189 million litres of Canadian product.
He is convinced the U.S. biodiesel industry is going to become a large market for Canadian canola.
JoAnne Buth, president of the Canola Council of Canada, said canola biodiesel is a good fit for Europe, Canada and certain U.S. states.
“Along the northern tier they’re going to have to be using canola as part of a blend because of the cold weather properties,” she said.
How big the market becomes in the U.S. will depend on what happens with the renewable fuel standard, which establishes a base demand for biofuel products.
The U.S. House of Representatives passed its version of the energy bill last week calling for a five-fold increase in the renewable fuel standard. It is now up to the U.S. Senate to finalize its version of the bill.
But the U.S. and European markets are not the only growth areas. Imperium sees a potentially huge market in the same Canadian city where it loads its feedstock.
The company wants a commitment from the organizers of the 2010 Olympic Winter Games to use a 20 percent biodiesel blend in the plethora of buses, diesel generators and fleet vehicles that will be operating in Vancouver, just across the border from Imperium’s Grays Harbor plant.
“We would like to see the Vancouver Olympics truly live up to its billing as a very green, sustainable games,” said Young.
