News
10/07/25
US biofuel support clears way for new crush capacity
New York, 10 July (Argus) — North American oilseed crushers told Argus that
projects to increase processing capacity are on track for the next year,
potentially enabling more renewable fuel production. After a difficult start to
the year for biofuel producers, US policymakers are increasingly making clear
that they want refiners to up their output in future years and rely more on
domestic feedstocks like soybean oil. That could pave the way for more oilseed
crush capacity to come online, after some facilities delayed or cancelled plans
over the last year on stagnant demand. Companies confirmed to Argus that more
than 620,000 bu/d of new soybean and canola crush capacity were on track to come
online in North America in the next year, and other facilities that did not
respond to requests for comment have plans in the coming years too. Greater
vegetable oil supply also could at least partly address concerns from oil and
biofuel refiners that Republicans' protectionist approach to biofuels threatens
feedstock shortages and price spikes. A multi-seed crush facility under
construction in Mitchell, South Dakota — which will be able to process up to
96,000 bu/d of soybeans — is scheduled to start up this October, South Dakota
Soybean Processors chief executive Tom Kersting told Argus. US crush company Ag
Processing similarly said that a new 137,000 bu/d soybean crush plant in David
City, Nebraska, will open "later this year". In Canada, Cargill confirmed that a
121,000 bu/d canola processing plant in Regina, Saskatchewan is also on track to
open this year. In the first half of next year, French agribusiness Louis
Dreyfus said it plans to complete two major projects in North America. The
company plans to open a 151,000 bu/d soybean crush plant in Upper Sandusky,
Ohio, and to double capacity to more than 240,000 bu/d at a canola crush
facility in Yorkton, Saskatchewan. US soybean oil futures have climbed by 12pc
in the past month on recent policy shifts, providing more incentive for
processors — already crushing more soybeans than ever before — to expand
production. The US recently proposed record-high biofuel blend mandates for the
next two years, projecting that domestic soybean oil production could increase
by 250mn USG/yr. And President Donald Trump over the weekend signed legislation
that retools a crucial US tax credit to increase subsidies for crop-based fuels.
Canadian canola processors, which depend on US incentives because Canada's
biofuel sector is far smaller, benefit less from some of these policy shifts.
While US fuels made from Canadian feedstocks can still claim the tax incentive
next year, the Trump administration has proposed halving credits generated under
the biofuel blend mandate for fuels made from foreign feedstocks. That makes US
soybean oil a far more attractive input for US refiners than Canadian canola
oil. A Canadian farm cooperative earlier this year paused plans for a combined
canola crush and renewable diesel plant in Regina, Saskatchewan, citing
"regulatory and political uncertainty". And Bunge was vague about its plans for
building the world's largest canola crush plant in the same city, which was
initially envisioned to start up last year. The US-based agribusiness, which
recently took over the project with its acquisition of Viterra, told Argus it
was "focused on integration to ensure a smooth transition for our customers" and
"may be able to provide an update in the near future". Even then, canola oil
stands to benefit from increased demand from food companies if more US soybean
oil is diverted to fuel markets. And despite recent struggles for other Canadian
biorefineries, ExxonMobil subsidiary Imperial Oil has plans to soon open a
20,000 b/d renewable diesel plant in Alberta that will draw on canola oil.
Canadian policymakers have taken steps to assuage local feedstock suppliers and
refiners, including a domestic renewable fuel mandate in British Columbia and a
proposed mandate in Ontario. Biofuel production and oilseed crush margins also
will depend on interactions with other policies, including a temporary tax break
through 2026 in the US for small biodiesel producers — historically more reliant
on vegetable oils than more versatile renewable diesel plants — as well as
low-carbon fuel standards in the US west coast region and Canada. The perennial
risk for any company is that policy, especially around biofuels, often swings
unexpectedly. By Cole Martin Send comments and request more information at
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