Canada, like other countries worldwide, is actively pursuing policies to reduce greenhouse gasses. In 2020, the Government of Canada proposed new regulations for the Clean Fuel Standard (CFS) which will require fuel suppliers to reduce the carbon intensity of the Canadian fuel supply. This new policy could provide a considerable demand-pull for biofuel and biofuel feedstock.
A key biofuel feedstock is canola oil, a variety of rapeseed grown in Canada with 19.5 million metric tonnes (MMT) produced in 2020, mostly in the prairie provinces of Alberta, Saskatchewan and Manitoba. In 2020, approximately 3 MMT of Canadian canola seed were used for producing global biofuel (mainly biodiesel) [1]. Canola/rapeseed is also an important oilseed worldwide, accounting for 12% of global oilseed production in 2020 [2], and has been widely studied and used for low-carbon fuel production worldwide [3–6]. For example, canola/rapeseed oil is the dominant feedstock for biodiesel and renewable diesel production in the European Union (EU), accounting for 38% of total feedstock use in 2020 [7].
Though there have been sustainability concerns over using some oilseeds for biofuel production [5, 8, 9], Canadian canola production is widely recognized as environmentally sustainable. For example, the greenhouse gas (GHG) emissions from Canadian canola meets sustainability criteria in the EU’s Renewable Energy Directive [10] and renewable biomass requirements under the United States (US) Renewable Fuel Standard (RFS) [11]. Moreover, canola is the only Canadian crop certified as sustainable by the International Sustainability and Carbon Certification (ISCC) system [12]. Canola is also an approved feedstock under the US RFS I and II [13], and canola oil biodiesel qualifies as both advanced biofuel and biomass-based diesel, which meets the lifecycle GHG emission reduction threshold of 50% [14].
Within Canada, canola oil is the main feedstock for biodiesel production. The annual capacity of Canadian biodiesel plants was 650 million liters in 2020 [15], with over 50% produced from canola oil [16]. The Archer-Daniels-Midland (ADM) biorefinery in Lloydminster, Alberta – the largest in Canada with an annual capacity of 284 million liters – uses canola oil as feedstock [16].
With low-carbon fuel regulations expanding in North America, and growing interest in low-carbon fuels and co-processing worldwide, demand for Canadian canola as a biofuel feedstock could increase [1]. For example, Imperial Oil, the largest petroleum refiner in Canada, has proposed building a renewable diesel biorefinery in the province of Alberta with an annual capacity of over one billion liters, which would double the current level of Canadian production of biodiesel and renewable diesel [17]. If sourced solely with canola feedstock, this massive biorefinery would require approximately 2.3 MMT of seed, which is approximately 40% of Alberta’s total canola production in 2020 [18].
Current uses of canola as biofuel feedstock are focused on using food-grade oil. But harvested canola is of varying quality, depending upon the percentage of green seeds and other criteria. The top grade of seed, No. 1, generally accounts for the majority of total canola production, however, the occurrence of early frosts and poor growing conditions can lead to significant quantities of non-No. 1 Canola. The lower grades are less desirable for food purposes [19], and food-grade crushing plants may reject lower grade seed when they have sufficient quantities of No. 1 Canola [20, 21].
In the current canola oil supply chain, approximately 90% of the oil is for human consumption (Chris Vervaet, Canadian Oilseed Processors Association, personal communication) and the remaining 10% for industrial use, including biofuels [22]. But oil for food and industrial uses are produced in the same supply chain with only minor differences in quality specifications. For example, both types of oil are transported in rail tank cars or tank trucks that are approved for edible oil [23].
Research on biofuel production from low-quality oil has shown promising results [24, 25], making it a potentially good feedstock for biofuel production [19]. Moreover, purchasing non-No.1 seeds, then processing and transporting the canola oil for biofuels with non-food grade infrastructure could involve substantially lower costs. But what is the potential of this feedstock to facilitate a separate fuel-grade canola oil supply chain? Our objectives are: 1) to assess how much non-No. 1 and total canola seed/oil could be available and their spatial distributions, and 2) to identify the best potential fuel-grade crushing sites based on the amount of annually accessible non-No. 1 Canola oil after incorporating transportation costs. Such information has important implications for potential biorefinery investors in terms of feedstock risk, and for policy makers interested in encouraging low-carbon fuel industries.
Our study involves investigating prospects for a fuel-grade canola oil supply chain that prioritizes the use of non-No. 1 Canola as biofuel feedstock in Alberta, a major canola producing province in Canada. In our approach we pay attention to three aspects frequently ignored in the literature. First, our focus is on feedstock quality, which could provide a potential specialized low-grade canola supply chain for biofuels. Second, our GIS approach considers heterogenous transport costs conditional on the actual location and condition of roads. Finally, we employ multi-year (2016–2019), high-resolution data (30m*30m) that displays spatial and temporal variability and helps portray township-specific prospects of locating fuel-grade crushers for canola-based biorefineries.