Biofuels: A Growing Market for Your Canola
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By Tenesha Lawson
Senior Communications Manager, Canadian Canola Growers Association
Diversifying markets and creating new opportunities for Canadian canola is critical to help drive added value for canola farmers, especially during a time of increasing trade volatility. And as farmers head into the 2026 growing season, they’ll be paying close attention to trade and market access to ensure they have reliable markets for their crop.
One market with significant value potential, but not always top of mind, is biofuels.
Over the past few years, Canada’s biofuel industry has been driving demand for higher volumes of canola oil, expanding the domestic market for farmers. It is anticipated that by the end of 2026, Canada could have the capacity to process 15 million metric tonnes annually through the expansion of canola processing on the prairies.
In fact, the recently constructed facility in Strathcona, Alberta, can drive demand for up to 2.5 million metric tonnes of canola seed – a volume rivalling each of Canada’s top seed export markets.
Ultimately, what does that mean for farmers? A growing, diversified market and more value for your crop.
Canadian Canola Growers Association (CCGA) recently completed a study showing that the current domestic biofuel policy is estimated to add nearly $600 million in value to farmgate prices in the 2025/2026 crop year, which breaks down to $0.62 per bushel of canola.
“It is estimated that one in three acres of Canadian grown canola ends up in the biofuels market in either Canada, the U.S., or the EU,” says Brittany Wood, CCGA’s Senior Manager, Trade and Transportation Policy.
“We’re working to ensure domestic biofuel policy supports the use of local feedstocks. This will help drive canola market diversification.”
MARKETS FOR CANADA’S CANOLA OIL
Canadian canola oil is consumed in two major markets: the U.S. and Canada. As you can see, Canada’s canola oil consumption is significant. In 2025, domestic consumption rose nearly 60% compared to 2021 due to domestic biofuel production.
“At the end of the day, farmers need reliable markets,” says Andre Harpe, Chair of CCGA and Alberta Canola.
“Export markets can change quickly. The biofuels market helps strengthen our position and manage risk, creating more opportunities for canola that’s grown in Canada to be used in Canada.”
ADVOCATING FOR BIOFUEL POLICY THAT WORKS FOR FARMERS
Players from across the entire biofuels sector, including farmers, fuel producers, and government, participated in a Biofuels Summit hosted by BASF, the Canadian Fuel Association, the Canadian Agri-Food Policy Institute, CCC, and RealAgriculture.
Although the current biofuels market is a good news story for Canadian agriculture, more can be done within the Clean Fuel Regulations amendments to further support farmers and industry.
In a joint submission to Environment and Climate Change Canada, CCGA, Canola Council of Canada (CCC), and the Canadian Oilseed Processors Association (COPA) advocated for three areas of improvement to federal biofuel policy:
- Only allow fuels made from domestic or North American feedstocks to be eligible for programs that support domestic biofuel production.
- Provide a strong market signal that expands domestic biofuel production volumes, resulting in increased demand for local feedstock.
- Reduce the risk of fuels made from potentially fraudulent foreign used cooking oil (UCO) from entering the Canadian clean fuels market.
“Federal biofuel policy is a file CCGA has been working on for over a decade,” says Cheryl Mayer, CCGA’s Vice-President, Policy Development.
“As Canada and global markets see the value in canola-based biofuels, the Canadian canola industry has a big opportunity to meet demand.”
CCGA, along with CCC, COPA, Alberta Canola, and other provincial canola commissions, will continue to advocate for policy changes to the Clean Fuel Regulations that will benefit canola farmers and the industry.