Ontario perspective on bio-lubricants Dr. Gregory Penner Soy 20/20 Project
Overview • Motor oil production in Canada • The future for soybeans • Summary
Capital investment in motor oil refining is occurring globally. • Capital investment in petroleum refining capacity is occurring elsewhere. • Korea, 350,000 tons of group III • Finland, 30,000 tons of group III • China, 400,000 tons from group I to groups II and III • Qatar, 1,500,000 tons of group I • U.S. 325,000 tons total across groups • Taiwan, 500,000 tons
Ontario chemical companies are interested in vegetable oil. • Willing to lease existing blending facilities. • Willing to co-explore market opportunities.
Soybean price is driven by protein. Decreasing protein content, even with increases in oil content results in less crush value.
What price point is required to change this? • An increase of 15% in soybean oil price is necessary. • This results in a price per litre of $0.65 • Higher than current canola price. • Higher value soybean oil • High in oleic acid
Is an industrial soybean realistic in the future? • Yes if; • Canola prices are driven upward by demand for non-transfats. • Market demand exceeds canola oil capacity to supply. • In the absence of these events canola oil will out compete soybean oil in industrial markets.
Summary • Motor oil will become a significant market opportunity for vegetable oils. • Soy 20/20 Project supports the following; • Increased use of canola oil for industrial purposes • Development of industrial soybean varieties.
Industrial markets for current commodity crops is the only way to effectively increase Canadian crop farm profit margins.We are not going to eat more, and the world is not going to pay more for food.