Canola seen gaining ground as biofuel during COVID-19

A drop in used cooking oil supplies because of the pandemic’s effect on restaurants has opened a door for the oilseed

COVID-19 is boosting the use of canola oil in the biofuel sector, says an industry official.

That is because production of one of canola’s main competing feedstocks has been severely curtailed, said Ian Thomson, president of Advanced Biofuels Canada.

There is suddenly nowhere near as much used cooking oil on the market.

“With COVID and people not eating at restaurants the numbers have gone way down,” he said.

“You’re seeing more canola (oil), you’re seeing more corn oil.”

But corn oil is a byproduct of ethanol production and ethanol output is down in the United States, so there is not as much of that feedstock around either.

There have also been supply problems with another major feedstock. Animal fat production is down due to production disruptions in the meat packing industry.

Thomson hasn’t seen recent numbers about canola oil consumption by the renewable diesel sector but he strongly believes it is up.

“Anecdotally, what I am very much hearing is that the (used cooking oil) availability is down and that people are having to tap into more conventional feedstocks,” he said.

On the demand front, biodiesel consumption hasn’t declined as much as ethanol because diesel fuel use hasn’t fallen as precipitously as gasoline during the pandemic.

The Saskatchewan Canola Development Commission was contacted for this story but declined to comment. The Canadian Oilseed Processors Association was also contacted but did not respond.

Thomson said the long-term outlook for canola oil consumption by the biofuel industry is also encouraging.

The liquid fuels portion of Ottawa’s proposed Clean Fuel Standard is scheduled to be implemented in 2022.

Advanced Biofuels Canada will soon be releasing a study analyzing how the standard could impact the demand for agricultural commodities.

The study outlines a number of scenarios for how Canada will meet the objective of reducing annual greenhouse gases by up to 30 million tonnes by 2030.

“All of those scenarios require higher blends of biodiesel, higher blends of HDRD (hydrogenation-derived renewable diesel), higher blends of ethanol,” said Thomson.

“You’re going to see significant growth in all of the biofuels.”

The caveat is that obligated parties may decide to meet their CFS obligations by reducing upstream emissions in the oilsands or focusing on hydrogen-derived energy or electric cars.

But Thomson expected biofuels will play a big role in meeting the CFS because they are readily available and obligated parties already have experience working with them.

HDRD is a biofuel that has been gaining a lot of traction.

Navius Research recently completed a study funded by Advanced Biofuels Canada showing Canada consumed 316 million litres of HDRD in 2019. That is close to the 345 million litres of biodiesel used in this country.

The two forms of renewable diesel combined made up 2.5 percent of the country’s total diesel pool volume. That is slightly higher than the two percent federal mandate.

HDRD doesn’t have the same cold-weather flowability and shelf-life problems that biodiesel has. It is so similar to petroleum diesel that it can be used as a “drop-in” fuel with no blending limits.

However, HDRD plants are far more expensive to build than biodiesel plants and the fuel is also more expensive.

The facilities tend to be co-located with existing petrochemical plants because one of the key inputs is hydrogen. HDRD facilities also produce volatile coproducts such as benzyne that require special handling.

Canada does not have any HDRD plants so the entire 316 million litres consumed in this country has to be imported.

Thomson said HDRD tends to be made with used cooking oil and animal fats but supplies of those commodities is finite, so there is opportunity to include canola oil in the mix.

There is also opportunities to use canola oil in co-processing plants, aviation fuels and marine fuels.

“This is why I think clean fuels are a really bright light for canola,” he said.

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