The U.S. Environmental Protection Agency has announced its final Renewable Volume Obligation (RVO) blending rule for biomass-based diesel.

The EPA set the blending mandate for biodiesel and renewable diesel to 5.4 billion gallons in 2026 and 5.5 billion gallons in 2027.

That is a 61 to 64 per cent increase over the 2025 level of 3.35 billion gallons.

“We’re very pleased to see those updates, and Canadian canola can make a meaningful contribution there,” said Canola Council of Canada president Chris Davison.

WHY IT MATTERS: The U.S. is the biggest buyer of Canadian canola oil.

He has not yet seen the EPA’s official regulatory text, but based on the agency’s announcement, there does not appear to be anything preventing Canadian canola oil from helping to meet the feedstock demand for the new RVOs.

“Canola is a modest but important feedstock in U.S. biomass-based diesel production,” said Davis.

The new RVOs should create an “appreciable opportunity” for Canada’s canola crushers who have greatly increased production capacity in recent years.

U.S. oilseed groups were thrilled with the EPA’s announcement.

The American Soybean Association said soybean farmers needed a win to boost domestic markets, and U.S. president Donald Trump’s administration delivered “in a big way.”

“The 2026-27 RVOs will increase soybean oil use, boost U.S. soybean processing and grow domestic biofuel markets for our crop,” ASA president Scott Metzger stated in a press release.

The final rule also reallocates 70 per cent of retroactive small refinery exemption volumes dating back to 2016 back into the blending pool to support additional biofuel production and soybean demand.

The only letdown for U.S. soybean growers was that they did not get their wish for the rule to prioritize domestically sourced biofuel feedstocks in 2026 and 2027.

EPA to reduce credits for imported biofuel, feedstocks

However, the EPA announced that it will reduce credit generation for imported biofuels and biofuel feedstocks by half, beginning in 2028.

If the EPA lives up to that promise, it would serve as a significant additional economic driver for the U.S. soybean sector, according to the association.

Davison is not sure what the EPA means by imported biofuel and feedstocks. At one point, the agency was considering a proposal to create a ring fence covering all of North America, and anything outside that zone would be considered imported.

He needs to see the details of the regulation to figure out what the EPA is considering for 2028.

The U.S. biofuel industry accounts for more than half of all U.S. domestic soybean oil consumption.

Clean Fuels Alliance America noted that biodiesel and renewable diesel facilities were forced to shut down or run far below previous year levels in 2025 due to market uncertainty.

U.S. biodiesel production declined by one-third compared to 2024 levels.

“The robust biomass-based diesel volumes set in this rule support America’s farmers and consumers,” Kurt Kovarik, Clean Fuel’s vice-president of federal affairs, stated in a press release.

Demand from the biodiesel and renewable diesel sector accounts for 10 per cent of the value of every bushel of U.S. grown soybeans.

The National Oilseed Processors Association called it a “landmark rule” that provides certainty and confidence for American farmers and processors.

“The historic volumes for biomass-based diesel, the 70 per cent reallocation of waived gallons, and the commitment to account for SREs (small refinery exemptions) on a go-forward basis, restores program integrity and puts the RFS (renewable fuel standard) back on a growth trajectory,” association president Devin Mogler said in a press release.

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Prices in Europe and the Middle East rose by about US$50 per tonne in early March with the first significant spot sale into northwestern Europe trading at $750 per tonne cost and freight for mid-March delivery from North Africa.

“Further gains are widely anticipated on expectations for a prolonged disruption,” Ruth Sharpe, global editor for ammonia with Argus Media, said during a recent webinar.

Prices were already starting to firm in 2026 due to a tightness in supply when war broke out in Iran.

The Middle East accounts for 23 per cent of global ammonia trade, shipping out 4.2 million tonnes of the product in 2025.

WHY IT MATTERS: Spring planting is around the corner for growers in the Northern Hemisphere.

Production from Saudi Arabia, Qatar, Bahrain, the United Arab Emirates and Iran has been cut off from the global market. Oman is the only country in the region capable of near-term shipments.

Three ammonia vessels that were partially or fully loaded at the time hostilities broke out were unable to exit the region. Another six en route had to be diverted.

Production has also been sharply reduced in Trinidad, which is the world’s largest exporter of ammonia.

Nutrien shut down its plants in the country in October 2025 due to a dispute with the government over port access and the lack of reliable natural gas supply.

That reduced Trinidad’s exports by nearly 40 per cent.

Nutrien is negotiating with Trinidad’s government. If the situation is resolved, it could return one million tonnes of supply to the export market.

However, there is another market that could be an even bigger help.

“A meaningful increase in U.S. Gulf exports would be one of the few options capable of offsetting a portion of the (Middle East) shortfall,” said Sharpe.

Gulf Coast Ammonia is commissioning a new facility in Texas City, Texas, while Woodside Energy’s new plant in Beaumont, Texas, is targeting its first exports in April.

Those two new plants will eventually contribute up to two million tonnes per year in exports once production ramps up.

Southeast Asia and China could also add some tonnes on the spot market.

Sharpe said ammonia prices are also being influenced by the European Union’s carbon border adjustment mechanism, which was implemented Jan. 1, 2026.

That is adding about $75 per tonne to the price of imported ammonia in that region due to higher compliance and carbon costs.

It is also leading to delayed purchases because there is considerable uncertainty surrounding implementation details of the program. EU member states are hoping to sort out those details by July.

Sharpe said the current situation is reminiscent of 2022, when ammonia prices shot up above $1,600 per ton due to sanctions removing Russian supplies from the market following its invasion of Ukraine.

That took about the same number of tonnes out of the market.

However, she doesn’t think prices will get anywhere near that high this time because of the new U.S. supplies coming online.

India will be the market most affected by the Middle East shortfall. It purchases about two million tonnes per year from the region.

“Market concerns are growing over possible shortages ahead of the kharif season, should the blockade extend into June,” she said.

South Korea, Morocco, Turkey and South Africa are other big buyers of Middle East ammonia.

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The grain company rejoined the organization at its March 12 annual general meeting after nearly a nine-year hiatus.

“Richardson is a significant player in the industry in a number of different capacities, including as an exporter and processor, so it’s great to have them around the table as a member of the council,” said council president Chris Davison.

Richardson withdrew its funding from the canola council, the Flax Council of Canada and Soy Canada at the end of 2017.

It had been spending more than $1 million per year funding the three organizations.

“We don’t think we got the value out of it,” Jean-Marc Ruest, Richardson’s senior vice-president of corporate affairs, said at the time.

Davison said the council maintained a working relationship with Richardson over the ensuing years.

Recently he discussed the council’s updated priorities with the grain company.

“That led to a decision from them to rejoin the council as a regular member,” he said.

WHY IT MATTERS: Richardson was the only major grain company that was not a member of the council.

He doesn’t know what tipped the scale.

“That’s a question you might have to ask them,” said Davison.

“I think it’s more than one thing.”

Richardson was contacted for this story but did not reply in time to meet The Western Producer’s publication deadline.

One of Richardson’s original concerns surrounded the council’s extensive work on agronomy when the private sector had its own agronomists working in the countryside.

The council seemingly addressed that concern when it announced a “refreshed” strategic framework on July 31, 2025.

In that announcement, the organization said it would no longer maintain a field-based agronomy team.

Davison said the council will instead focus on maintaining or enhancing the ability to innovate, promoting canola’s role in biofuel, ensuring market access for canola products and conducting targeted market development around the world.

Exporters and processors provided $1.33 million, or 36 per cent, of the council’s core funding in 2025.

That compares to $1.55 million contributed by provincial grower groups, $750,000 from life science companies and $21,000 from affiliate memberships.

Davison would not divulge how much Richardson would be paying in 2026.

“We don’t talk about the amounts that individual organizations contribute,” he said.

However, he noted that it will be helpful to have the grain company back in the fold when it comes to tackling priorities and co-ordinating and aligning activities.

“The more of the industry that we have represented at the table the better that is,” said Davison.

Aaron Anderson of Richardson is one of three new directors for 2026-27. He will be a director-at-large nominated by the council’s board.

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“If you have a cargo with any of the shipping lines, they are ending the journey at a destination that is not on your bill of lading,” said Tala Mobayen, director of Victoria Pulse Trading Corporation.

“They are very, very hefty at this point in time,” she said.

As a result, there is no business being conducted in that market.

“I don’t see anyone buying new cargo because they’re just worried about their safety,” said Mobayen.

Mideast accounts for $769M in pulse sales

The Middle East and North Africa (MENA) region bought 801,000 tonnes of Canadian pulses worth $769 million in 2025, according to Pulse Canada.

Roughly 78 per cent of that business was lentils, with chickpeas chipping in another nine per cent.

Shippers face $2,000-per-container surcharges

Saleh Reda, vice-president of GEDKO Global Trading Partners, said shippers with product on the water heading to the Middle East are being slammed with a US$2,000 per container, or $80 per tonne, surcharge.

They are also being forced to pay an $800 per container, or $32 per tonne, rerouting charge with their cargo being dropped off at the nearest safe port.

“It is for the importer to figure out how to get it from that safe port to their own destination,” he said.

GEDKO ships Canadian pulses primarily to the MENA region, although it services other markets around the world as well.

Reda said further sales to the Middle East market are “frozen” because freight forwarders are telling buyers they must pay a $200 per container emergency conflict surcharge a $500 per container rate restoration initiative fee and a $150 per container emergency fuel surcharge.

“The long and short of it is, I don’t think anybody is really having the stomach to make a sale to that region,” he said.

Algeria adds to regional trade complications

Business was already slow in the MENA region even before war broke out. Liquidity has dried up in the pulse industry due to U.S. President Donald Trump’s tariffs and ensuing market uncertainty.

Reda had been anticipating brisk sales due to vastly reduced pulse prices in 2025-26, but if anything, business has been slower than the previous year.

“The demand was lousy and now it’s lousier,” he said.

Exporters are used to encountering unexpected problems in the MENA region.

For instance, Algeria recently announced that only the Algerian government is allowed to import pulses as of January 2026.

Port closures block access to key distribution hub

In the past, a couple dozen Canadian exporters would ship product to a couple dozen Algerian importers.

“It’s now pretty much going to be just one or two exporters from Canada (shipping) to that one Algerian importer,” said Reda.

“That’s one unfortunate event that has happened recently.”

However, the war in Iran is affecting multiple markets at once. Shippers can no longer access ports such as Jebel Ali located near Dubai in the United Arab Emirates.

It is an important hub that services many other countries in the region.

“As an exporting nation, we need every single market out there to be open for us,” he said.

Red lentil prices slip as markets close

Reda believes the sudden loss of many vital markets in the Middle East will hurt pulse prices in Canada.

Red lentil prices were about $0.23 per pound as of March 16, according to Stat Publishing. That compares to about $0.25 before the onset of the conflict in Iran.

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Aaron Anderson of Richardson International is listed as one of three new directors for 2026-27.

Anderson will be a director-at-large nominated by the council’s board.

It is an interesting development because Richardson withdrew its funding from the Canola Council of Canada, the Flax Council of Canada and Soy Canada in late-2017.

It had been spending more than $1 million per year funding the three organizations.

“We don’t think we got the value out of it,” Jean-Marc Ruest, Richardson’s senior vice-president of corporate affairs, said at the time.

WHY IT MATTERS: The board appointment suggest industry heavyweight Richardson may have rejoined the commodity group.^

There were no press releases issued by either the canola council or Richardson about the company rejoining the fold.

The Western Producer has contacted both organizations and is waiting for a reply.

One of Richardson’s original concerns was over the canola council’s extensive work on agronomy when the private sector already had its own agronomists working in the countryside.

“Is there an element of duplication that should be looked at?” said Ruest at the time.

The council seemingly addressed that concern when it announced a “refreshed” strategic framework on July 31, 2025.

In that announcement, the organization said it would no longer maintain a field-based agronomy team.

The council said it would instead focus on three core priorities:

• Sustainable and reliable supply — growing the volume of Canadian canola to meet domestic and global market needs.
• Stable markets for value optimization — growing the economic value of canola by developing and defending markets for Canadian canola and canola products.
• Member service excellence — delivering continued value to members through council services and working to strengthen coordination and engagement with industry partners.

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“You’re going to feel that influence on land from those above average ocean temperatures,” Rippey told delegates attending the USDA’s 102nd annual Agricultural Outlook Forum.

That doesn’t mean there will be devastating heatwaves everywhere, but it does mean temperatures will likely be above normal around the globe heading into the 2026 growing season.

When there are ENSO neutral conditions “other weird things happen,” said Rippey.

A lot of times it results in a meandering jet stream or what meteorologists call a blocking pattern.

There has already been a lot of blocking at high latitudes over the winter months. That resulted in a sprawling winter storm that delivered more than a foot of snow to parts of the lower Midwest and northeast.

Unfortunately, blocking patterns are hard to predict more than a few days in advance.

“It makes it very difficult to look ahead at some of the spring and summer weather patterns because blocking can just kind of randomly come and go,” said Rippey.

Spring weather forecast 2026

His spring forecast for the U.S. calls for warmth across the south and possible wetness in the eastern corn belt.

He expects some episodic cold outbreaks, although the duration and intensity levels will decrease as nights become shorter and the sun angle increases. Those cold shots could cause some winter wheat damage in late spring.

The southwest could trend dry through the spring, while drought may expand in the Plains region.

Approximately 45 per cent of the U.S. winter wheat production area was experiencing some level of drought as of Feb. 10.

It was the ninth driest August to January period on record in the U.S. and the driest since 1999-2000.

Some key winter wheat growing states managed to get moisture at the right time.

Wheat growing conditions

Things are looking good in Kansas for instance, where 61 per cent of the crop was rated good to excellent as of the end of January.

However, that is not the case next door in Nebraska, where only 24 per cent fell into those two categories, down 30 percentage points from where it was rated at the end of November.

Parts of Oklahoma and Texas also have drought issues.

“The bottom line is we have kind of a mixed bag for the winter wheat production areas,” said Rippey, who has been the author of the U.S. Drought Monitor since its inception in 1999.

There are no excessively wet areas, so spring flooding should not be a problem this year.

“Generally speaking, planting is going to proceed fairly rapidly unless we get some crazy spring storm that floods somewhere,” he said.

What the weather models say

La Niña will be completely gone by summer, which means other factors, such as atmospheric blocking, will control the weather.

A consensus of climate models suggests there could be a dip in the jet stream across the Plains and the Midwest, keeping extreme heat at bay.

However, there are also indications that a ridge of high pressure could form over the western U.S., leading to enhanced odds of a hot and dry summer in the northwest.

El Niño will likely return in late 2026. That will be too late to have any effect on North America’s crops.

But it could have a “profound impact” in the western Pacific Rim, causing drought in parts of Australia, southeast Asia and southern Africa.

El Niño tends to have the opposite impact in South America, resulting in wet conditions in southern Brazil and Argentina.

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Urea barges in New Orleans traded roughly US$50-$80 per short ton, or 11 to 17 per cent higher, on March 2 compared to Feb. 28, according to Argus Media.

The conflict presents a “major risk” to North American urea supplies ahead of spring planting, according to an analysis published on the Argus website.

A vessel loading on Monday in the Middle East would arrive in the United States by mid-April. March and April are the largest months for urea imports.

“If shipments from the Middle East are delayed or disrupted, the U.S. would lose a critical source of urea, likely crunching supply and laying the groundwork for upward price volatility,” Argus analyst Calder Jett said in his article.

“Middle Eastern producers of urea so far have suspended offers and are grappling with shipping complications in the Strait of Hormuz.”

WHY IT MATTERS: This is the time of year when farmers are contemplating spring fertilizer purchases.

StoneX fertilizer analyst Josh Linville said the conflict couldn’t come at a worse time for North American farmers, who are gearing up for spring.

Commercial shipping traffic through the Strait of Hormuz has started to “grind to a halt.” Vessel owners do not want to put their ships and crews in harm’s way.

The market impact will depend on how long the strait is shut down, he said in a YouTube video on the subject.

U.S. president Donald Trump has stated that U.S. military operations in Iran are likely to last at least one month.

“The unfortunate part is that means you have locked in three of your top 10 global urea exporters and three of your top 10 global anhydrous exporters,” said Linville.

Saudi Arabia is also a major exporter of phosphate fertilizer.

The phosphate market was already suffering from the lack of Chinese exports. The world’s largest exporter of the product said it will not be shipping any product until August 2026.

The urea market has also had problems with supply keeping up to rising demand due to a lack of Chinese exports and the European Union functioning at about 75 per cent of its normal operating rate.

“We have gotten to the point where we don’t have any excess supplies anymore,” said Linville.

Iran and Saudi Arabia don’t have any alternatives to shipping through the Strait of Hormuz.

“For those manufacturers that rely on the Persian Gulf to get out to the rest of the world, if you shut down that narrow body of water, you’re stuck,” he said.

Dennis Voznesenski, agricultural economist with the Commonwealth Bank of Australia, reports that three freight vessels from the U.S. and United Kingdom have already been struck in the Strait of Hormuz.

He noted in a post on X that one-third of global urea trade passes through the strait, according to Kpler.

The hostilities will also disrupt natural gas shipments through the strait, which could lead to higher fertilizer production costs.

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“Millions of people will die,” said Andy Harrington.

Governments are drastically slashing their international development assistance budgets to focus on domestic concerns and military spending.

The United Nations Office for the Coordination of Humanitarian Affairs warns that global funding for humanitarian aid fell by a third in 2025.

“It’s really quite catastrophic,” said Harrington.

WHY IT MATTERS: Millions of people will die.

Harrington said he was standing outside a childhood malnutrition centre in South Sudan earlier this year where there was a lineup of children suffering from hunger.

“We’re not talking, ‘we missed a meal here;’ we’re talking seriously acute malnutrition with consequences for life,” he said.

As he was taking in that disturbing scene, he was informed that the centre would be shutting down in 24 hours with no prior notice.

It was one of 1,100 centres being shuttered in South Sudan alone, all casualties of budget cuts at the United States Agency for International Development (USAID).

The Lancet, a medical journal published in Britain, estimates that 14 million people will die by 2030 because of the USAID belt-tightening.

But it is not just USAID. Britain, Germany, the European Union and many other governments around the world are also chopping their humanitarian aid budgets.

The Canadian government announced in its 2025 budget that it will be reducing foreign aid spending by $2.7 billion between 2026 and 2030.

Harrington has been told that most of the cuts will be to long-term development programs rather than emergency assistance.

In the meantime, global hunger is spreading at a pace not seen in decades.

“Gaza crossed into famine, following Sudan, where famine started in 2024 and grew in 2025,” he said.

“These are stark reminders of the human cost of inaction, and how quickly hunger can escalate when the world chooses to look away.”

The number of acutely food insecure people nearly tripled to 295 million people in 2024 from 105 million in 2016, according to the Global Report on Food Crises.

“We get lost in the numbers, but these are real human beings,” said Harrington.

“These are mothers and fathers with children that they’re watching starve.”

Harrington fully expects that the number of acutely food insecure people grew in 2025 and will only get worse in 2026 as more funding cuts take effect.

He believes it is not too late for Canada to reverse course and drop the looming cuts to its international aid budget.

“Before we make these cuts, we have to question ourselves as a country and say, ‘who do we want to be?’ ” he said.

“When others are stepping back, we need to be stepping forward and standing with the world.”

Future funding

Harrington understands that Canadians are facing a cost-of-living crisis at home, but he noted that the average inflation rate in the countries where the Canadian Foodgrains Bank works is 45 per cent.

That is a harrowing statistic for a family living on a few dollars per week.

He worries what impact the government cuts will have on his organization, which receives about 40 per cent of its funding from Ottawa and the remainder from private donations.

In the 2024-25 budget year, the organization provided $74.6 million of assistance to 1.18 million people overseas.

He doesn’t anticipate much of a funding reduction for the upcoming fiscal year, but he is concerned about future years as the proposed government cuts take effect.

Harrington said it is going to be hard for organizations such as his to fill the massive gaps that have been created in humanitarian aid programs because they are already overstretched.

He is grateful that private donors appear to be stepping up to help fill the void.

However, if governments don’t reverse course in a few short years, people around the world will be asking themselves, “what have we done?” when they turn on their televisions.

“The pictures are going to be horrific,” said Harrington.

He is confident those disturbing pictures will trigger a wave of public empathy and support.

However, it will be far more costly in terms of both money and human lives to address the horror at that stage rather than preventing it from happening today.

The Canadian Foodgrains Bank is a partnership of 15 churches and church agencies that works with local partners in 37 countries.

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Gaurav Jain, analyst with AgPulse Analytica, expects the Government of India to hike the existing 10 per cent duty to 30 per cent as of April 1, 2026.

The government has repeatedly told farmers that it will purchase up to 100 per cent of their 2026 lentils, pigeon peas and black matpe at its minimum support prices (MSP).

“If there is a need, they will buy all of it,” said Jain.

The government is already actively buying pigeon peas and black matpe and will soon be acquiring lentils.

Bridging import, MSP price gap

The MSP for lentils equates to US$771 per tonne, while imported lentils are selling for about $600 per tonne after the 10 per cent duty.

That means the government would be losing about $171 per tonne if it purchased lentils from farmers at the MSP and then sold the crop at the prevailing market price.

That’s why Jain and many other industry officials in India believe the government will increase the duty to 30 per cent after the existing 10 per cent duty expires on March 31.

WHY IT MATTERS: India is the top market for Canadian lentils.

That would increase the price of imported product to about $710 per tonne after additional expenses to clear customs and transport the product from port to inland markets.

That would still be below the MSP, but many Indian farmers would choose to sell to private traders because it’s less hassle.

That would ease the burden on the government while raising prices for farmers.

Exporters rush shipments ahead of deadline

Jain thinks a duty hike is inevitable.

“That is why you see a lot of shipments happening in January and early February,” he said.

Lineups of ships destined for India have been strong since December in Canada and Australia as exporters try to take advantage of the 10 per cent duty while it’s still in place.

He anticipates movement to slow down substantially in March.

Exports to Pakistan, Bangladesh and the United Arab Emirates are also expected to subside in late February and March because Ramadan demand from those markets is already fed and they’re entering a post-Ramadan lull.

High yield forecast softens prices

AgPulse is forecasting 1.78 million tonnes of Indian lentil production as the crop approaches harvest. That would be up from the five-year average of 1.51 million tonnes.

Stat Publishing is more optimistic, forecasting 1.99 million tonnes of production.

Either way, it’s expected to be a big crop, and that’s pushing down lentil prices in the country.

Chuck Penner, analyst with LeftField Commodity Research, said with red lentil prices at multi-year lows, he too worries the government will increase import tariffs beyond the existing 10 per cent.

He told farmers attending the Saskatchewan Pulse Growers’ recent Swift Current winter pulse meeting that anything above 30 per cent would not be good for export prospects.

Opportunity rises for green lentil exports

The good news out of India? The country’s short pigeon pea crop, which is sending prices higher and creating opportunity for imported green lentils.

Prices for green lentils have been significantly higher than pigeon peas in India since late 2023.

“Now that we have this thing flipped around, I think we’re going to open the door for more movement of green lentils,” said Penner.

Jain is forecasting India will import one million tonnes of all types of lentils in 2026-27, down from 1.25 million tonnes this crop year, 1.22 million tonnes the previous year and 1.68 million tonnes in 2023-24.

Export outlook dims

This year’s big crop, the anticipated increase in import duties and good carryover from previous years, will all combine to limit imports.

Jain thinks Kazakhstan will grow more lentils in 2026-27, while Turkey’s production should rebound, which could also limit Canada’s exports in the coming year.

“If Canada has an average crop, it may find it difficult to market,” he said.

The Indian government has still not made a decision on lentil tariffs as of Feb. 19.

Lentil market outlook: India import duty hike

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Chris Davison, president of the Canola Council of Canada, hasn’t had a chance to do a deep dive into the proposed regulation, but he likes what he has seen on the surface.

“On first blush, there are a number of provisions that can certainly help support Canadian canola’s access to the U.S. biofuel market,” he said.

It took one year for the U.S. Department of the Treasury and the Internal Revenue Service to clarify how the credit will work.

The credit has been available since January 2025, but producers and farmers have struggled to capitalize on it because there was minimal guidance to accompany the credit.

The newly published guidance helps biofuel producers determine their eligibility for and to calculate the credit made available under the One, Big, Beautiful Bill.

WHY IT MATTERS: The U.S. biofuel sector could be a huge customer for Canadian canola oil.

Davison is pleased to see that the credit limits feedstocks to those grown or produced in the U.S., Mexico and Canada.

“That’s a critical provision in terms of helping ensure that the economic benefits of biofuel accrue back to farmers domestically from the (Canada-U.S.-Mexico Agreement) countries,” he said.

It means biofuel made from used cooking oil and tallow from overseas markets does not qualify for the credit.

Canada’s canola industry is advocating for similar measures to be included in Canada’s Clean Fuel Regulations amendments.

The updated 45Z guidance also confirms that fuel made from Canadian canola is an approved pathway and that the indirect land use change penalties associated with agricultural feedstocks have been removed.

Biofuel is a policy-driven market, and there is one big remaining piece of that puzzle, which is when the U.S. Environmental Protection Agency establishes its Renewable Volume Obligations (RVOs) for 2026 and 2027.

The EPA has floated a proposal that imported biofuel and biofuel made with imported feedstock would be assigned half as many Renewable Identification Number (RIN) credits as fuel made with domestic feedstocks.

That idea has been embraced by groups such as the American Soybean Association but strongly opposed by Canada’s canola sector.

The EPA recently said it expects to issue its final RVO rule during the first quarter of 2026.

Davison said the 45Z credit and the RVO ruling will strongly influence Canada’s canola oil sales to the U.S. market.

He is pleased to see that the first domino appears to have fallen in the right direction.

“This is a positive development and we should recognize that,” he said.

“It recognizes that Canadian canola is an important feedstock for biofuel producers in the U.S. as well as Canada.”

Crux, a capital markets platform for the clean economy, estimates that US$1 billion in 45Z credits were transacted in 2025.

It anticipates the new guidance will unlock an additional $1 to $1.5 billion in credits by the end of the third quarter of 2026.

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