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.
