EU Biofuel Boom Benefiting Aussie Canola Growers
A new industry report predicts that canola prices could continue to climb past their recent record-breaking levels over the next 10 years as emissions policies in the EU and North America shift.
As countries take steps to phase out fossil fuels and increase utilization of biodiesel, demand for canola is rising due to this new value channel. And as drought in Canada, the world’s top exporter, has significantly cut global supply, demand from the EU (which is also phasing out palm oil from its biodiesel production) continues to climb - driving canola prices up by 23.5 percent, approaching $1000 per ton.
This global scenario represents a major opportunity for Australia’s canola growers, who in 2017 came very close to losing the $1 billion EU market when the EU threatened to close its ports to Australian canola unless it was proven to be a low-emission variant. Australia’s CSIRO released a report verifying the suitability of Australia’s canola just in time.
To meet demand, Australia’s canola output increased by 11.3 percent year-over-year, expanding acreage by 600,000 hectares, and increasing exports by 500,000 tons over 2020/2021.
And while global canola production for the 2022/2023 season is expected to rise, Canada’s domestic crushing capacity will also be coming online, further reducing that country’s export volumes.