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Projects aimed at expanding oilseed crushing capacity in the United States are on track for next year, a development that could boost renewable fuel production, according to a report by Argus Media citing North American oilseed processing companies.
After a difficult start to the year for biofuel producers, US policymakers have increasingly signalled their desire to see refiners raise output and use more domestic feedstocks such as soybean oil, according to a report published on 10 July.
The report noted that some crushers had paused or scrapped their plans last year amid weak demand, but the new policy push could lead to an increase in oilseed crushing capacity.
Companies confirmed to Argus that more than 620,000 bushels per day of new soybean and canola crushing capacity is due to be added in North America next year, while other companies — which did not respond to requests for comment — are also planning to expand output.
The report added that increased vegetable oil supply could help partly ease concerns among oil and biofuel producers that the Republican Party's protectionist approach to biofuels could lead to feedstock shortages and sharp price increases.
Tom Kersting, chief executive of South Dakota Soybean Processors, said a multi-seed processing plant currently under construction in Mitchell, South Dakota, with capacity of up to 96,000 bushels of soybeans per day, is expected to begin operations in October this year.
Meanwhile, US soybean processor Ag Processing announced that a new plant with capacity of 137,000 bushels per day in David City, Nebraska, will open "later this year".
In Canada, global agribusiness giant Cargill confirmed that a canola crushing plant with capacity of 121,000 bushels per day in Regina, Saskatchewan, is scheduled to open in 2025.
At the same time, Louis Dreyfus Company (LDC) said it plans to complete two major North American projects in the first half of next year. The company's plans include building a soybean crushing plant with capacity of 151,000 bushels per day in Upper Sandusky, Ohio, and doubling the capacity of its canola plant in Yorkton, Saskatchewan, to more than 240,000 bushels per day.
The report noted that US soybean oil futures rose by 12% in the month preceding the report's release, following policy changes including a proposal by the Environmental Protection Agency (EPA) for record biofuel blending requirement levels for 2026 and 2027, giving refiners a stronger incentive to expand production.
Former US President Donald Trump also signed into law the "Big Beautiful Bill Act" on 4 July, which includes a two-year extension of the "45Z" clean fuel production credit, restricted to feedstocks sourced from the United States, Canada and Mexico, alongside the elimination of penalties linked to indirect land use change (ILUC).
Source: Argus Media