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Ca$h crop: the rags-to-riches story of the Canadian canola industry continues as clever engineering creates new opportunities in the biofuels business.


It's a familiar vista: big blue prairie sky draped above a laser-straight horizon that gives way to vast fields of yellow. Canola, that iconic Saskatchewan crop introduced to the prairies just 30 years ago, is coming into its own once again, this time as a feedstock for biodiesel.

Foam Lake, Sask., a mixed-farming community situated halfway between Saskatoon and Yorkton, is at the centre of the biofuels buzz. The town of 1200 was settled by Icelanders and Ukrainians in the late nineteenth century. Today it unabashedly deems itself "the best place in the world to live" and celebrates its hockey heroes and protected wetlands. One could argue that the town fits nicely into that bucolic prairie scene, a quaint farming community. But to preserve that stereotype, one would have to ignore the feat of engineering operating at the edge of town for the past year.

Biodiesel production company, Milligan Bio-Tech Inc. celebrated the grand opening of their crushing and biodiesel facility in Foam Lake in July 2009. Founded by a group of forward thinking and passionate canola producers, Milligan uses technology licensed from Agriculture and Agri-Food Canada to produce biodiesel from non-food-grade canola that is normally considered unusable by the industry.

The market for canola has been growing steadily worldwide since its introduction just a few decades ago. Canola was developed through conventional plant breeding from rapeseed, an oilseed used for hundreds of years as oil in lamps or in cooking and, more recently as a lubricant in steam engines in naval and merchant ships. After World War II, when demand for rapeseed declined sharply, farmers began to look for other uses for the plant and scientists worked to improve the quality of the crop.

Canola was developed to reduce levels of glucosiniolates (which contribute to the sharp taste in mustard), lower erucic acid (which makes oils go rancid quickly) and to remove two fatty acids that are not essential for human growth. The resulting oilseed crop is high in good fats like monounsaturates and omega-3s, while low in bad fats such as saturates and trans and a good source of Vitamin E. Canola oil has found an important place in the world's kitchens, food processing companies and restaurants.

Now, thanks to another injection of scientific innovation and collaboration, new markets are opening up for what was once considered a waste product of canola, and in the process, a whole new canola-based biodiesel industry in Canada has been jump started.

High energy costs and depleting fuel supplies necessitate the creation of renewable energy sources around the globe. While other countries are developing their biodiesel industry, Canada can either ship its raw material elsewhere and import biodiesel back into the country, or create a biodiesel industry here.

According to, a subsidiary of the non-profit Canola Council of Canada which represents the entire canola industry, a canola-based biodiesel industry in Canada represents the opportunity to generate $620 million in capital investment in this country, contribute more than $1.1 billion per year in additional farm income, and inject an additional $2.4 billion into the economy annually.

Agriculture and Agri-Food Canada (AAFC) has played a key role in the canola story since its inception in 1974, when AAFC's Keith Downey and the University of Manitoba's Baldur Stefansson released the Cinderella crop to the world. A once-declining crop quickly transformed into a valuable commodity and created an entire industry in Canada--from growers, input suppliers, researchers, crushers and processors to exporters and marketers.

By 1993 canola was well established in Canada and had healthy export markets. Like other commodities, canola growers formed organizations such as the Saskatchewan Canola Development Commission (SaskCanola) whose mandate was to enhance canola producers' competitiveness and profitability.

At this time biodiesel was virtually unheard of in Canada, yet both Martin Reaney of AAFC's Saskatoon Research Centre and SaskCanola began investigating the potential for biodiesel production in Canada to create another market for the canola crop. This interest was supported by local canola producers from Foam Lake, (who incorporated to form Milligan Bio-Tech Inc. in 1996), and the Foam Lake Marketing Club.

Since technology using canola to produce biodiesel was available in Europe, the Canadian partners first analyzed the biodiesel industries in Austria, Germany and France. The European biodiesel industry was running on high fuel prices, tax incentives and government subsidies to encourage farmers to grow canola for use as a biofuel feedstock. In Canada, the price of the vegetable oil needed to produce biodiesel was significantly higher than the price of diesel fuel. In the absence of injections of government cash, the economics just weren't there.

Market research conducted by Sandy Bresciani, now Manager of Marketing and Licensing at AAFC, showed that consumers in the 1990s were not willing to pay a premium for a bio-based fuel.

"Nobody had heard of biodiesel in Canada when we started out," explains Bresciani who was a commercialization officer at the on-set of the project. "We were trying to investigate the market potential for a product that consumers did not yet understand. At the time, diesel fuel was relatively cheap and nobody was prepared to pay more for fuel."

The results of further market research and the development of a computerized economic model by Bresciani helped focus the research to develop a technology that produced biodiesel more economically. It became clear that for canola biodiesel to be successful in Canada, either lower-value oilseeds needed to be used or higher-value products needed to be produced.

Reaney, now the Chair in Lipid Quality and Utilization in the College of Agriculture and Bioresources at the University of Saskatchewan, was AAFC's lead scientist when the project began.

"It became clear that biodiesel could not be made economically with the technology that was available," recalls Reaney. "We soon realized that an alternative model of production was needed and set out to develop a technology that could be used to make biodiesel economically in Canada." Today, Reaney is credited with developing low-cost biodiesel using cold press technology for crushing off-grade canola that would have otherwise been waste.

Finding the right ingredients would be just the beginning. Biodiesel producers would need to find buyers for their product and determine if they could access enough raw materials in the form of low-grade canola. Zenneth Faye, P Eng. and former head of the Saskatchewan Canola Development Commission as well as one of the founders of Milligan Bio-Tech, was one of a small group of canola farmers who came together in 1991, trying to find new markets for their oilseed crop.


"Even with the development of a technology that relied on cheaper inputs, we didn't know whether we could obtain a constant supply of the low grade canola needed to produce a steady supply of biodiesel for the market," explains Faye, now the executive manager of Milligan Bio-Tech.

"Although a proportion of the Canadian canola crop routinely falls short of the high standards required for export and domestic crush, until we started advertising for off-grade canola, there were no records of annual supplies of such oilseeds. The grain was either disposed of in landfills, blended off in low ratios with higher grade seeds, or fed to livestock."

Reaney and AAFC colleague, Neil Westcott, embarked on "pioneer" research to develop a technology to produce biodiesel from low grade canola. They ran into numerous roadblocks in the production process brought about by the variability in the composition of the oil obtained from off-grade canola and other off-grade oilseed feedstocks.

Chemical conversions on low quality material are difficult as the process design must be robust and tolerate all input materials. Quality control and quality assurance measures must also be put in place to allow the handling of the low quality material.

As the researchers gained experience, and with lab testing, continuous improvements in terms of quality and process refining were realized and output and production efficiencies increased.

Once the technology was developed at the bench-scale, the end-product needed to be made on a large enough scale to test the market and create product awareness. It also had to be tested at the pilot scale before setting up a plant in Foam Lake.

The expertise of various players in Saskatchewan--including POS Pilot Plant (a Saskatoon-based company specializing in extraction, fractionation, purification and modification of bio-based materials), Saskatchewan Research Council and the BioProcessing Centre in Saskatoon--was called upon to not only gather the data necessary to scale up the technology, but also to help increase the visibility of the project. The results from the test market would help determine whether there was a business case to set up a larger-scale facility.


"For the first 10 years or so, there was not much interest in biofuels in Canada," explains Faye. "The early years were spent educating the public on the benefits of biodiesel and working with potential end-users to solicit their input and evaluate the product."

These potential end-users included industries that typically operate in environmentally-sensitive areas, expose workers to diesel emissions within enclosed environments, or expose the general public to diesel emissions--for example agriculture, aviation, forestry, trucking, mining, provincial and municipal government fleet vehicles.

One concern voiced by these potential end-users was that the engine and pump manufacturers would not honor their warranties if they used biodiesel in their equipment and vehicles. Barry Hertz, of the Department of Mechanical Engineering at the University of Saskatchewan, joined the research team in the mid 1990s and began performing engine-wear tests using the canola biodiesel that was being made in Reaney's laboratory.

As part of the field testing in 2002, the team joined forces with Saskatoon Transit and introduced a "Bio Bus" (which is still in operation) to examine how bio-diesel would affect the fuel consumption, engine wear, and longevity of these heavy duty engines. (A later phase of the Bio Bus testing would include use of 1 per cent biodiesel in the entire Saskatoon Transit fleet and testing of 5 per cent biodiesel with Ultra Low Sulphur Diesel (ULSD) in four of the newest buses with the latest emissions technologies.)

Hertz's lab discovered that canola biodiesel blended with regular fuel reduced engine wear. It was ultimately shown that as little as 0.1 per cent biodiesel could have a dramatic effect on increasing lubricity and decreasing engine wear. In addition, even at this low concentration, fuel economy was significantly improved, especially in vehicles operating on Canadian winter diesel.

This lubricity researeh propelled the group to examine non-traditional, higher-value co-products such as fuel additives: if sold as fuel additives, the products did not need to compete with diesel fuel, but rather with other fuel additives of comparable value.

Milligan Biotech saw an opportunity to establish a new industry in Saskatchewan and has worked with Reaney to introduce several new products including a diesel fuel conditioner (2001), penetrating oil (2003) and road dust suppressant (2004).

The research group also knew canola had been converted to fuel in Europe, but the winters are milder there than in Saskatchewan, so the challenge was to develop a fuel that wouldn't freeze at sub-zero temperatures.

Additional field testing during a 2007-08 initiative known as the Alberta Renewable Diesel Demonstration confirmed the suitability and operability of low-level renewable biodiesel blends in cold weather. Managed by Climate Change Central and sponsored by AAFC, Shell Canada Ltd., the Canola Council of Canada, Milligan Bio-Tech and others, the field tests became Canada's largest study into the cold weather performance of renewable diesel with over 60 trucks of various sizes participating in the demonstration.

Throughout the years and with the input from various field tests and end-users, canola biodiesel has improved continuously to the point of passing both the North American ASTM 6751 and the European EN 14214 standards. Sales of Milligan's four canola-based products have increased annually since production began in 2001 and markets have expanded across Canada, the United States and overseas.

Scientific efforts have resulted in a trade-secret technology and numerous patents on innovations that increase the value of biodiesel for producers and consumers. Five of the twenty patents Reaney has filed are in commercial use. Milligan is using two of these applications and is seeking additional filings with Reaney.

Milligan's crushing and biodiesel facility in Foam Lake came about thanks to this technology. This partnership between scientists and canola producers has not only helped establish a canola-based biodiesel industry in Canada, it has also significantly benefited Foam Lake and Saskatchewan through job creation and economic benefits. Milligan now has a total investment of over $15 million, employs 35 people in Foam Lake, and brings new residents to a rural community that was in decline.

Milligan continues to introduce new products and plans to expand production to 150 million litres of biodiesel per year by 2012. Their goal is to establish plants near sources of low-grade seed in a "hub and spoke" model across the prairies to reduce transportation costs.

Biodiesel can replace a significant percentage of petroleum diesels worldwide with a positive environmental effect. While other forms of biofuel have been said to compete for food production, the Canadian technology increases total food production by recovering the low quality stream and converting 70 per cent of the seed to animal feed. Through access to university and AAFC facilities for large animal feeding trials, Reaney has been able to arrange testing of feed materials for cattle for Milligan's canola-based meat feed supplements.

The biodiesel technology developed in Saskatchewan will help the Canadian industry achieve federal targets requiring two per cent renewable fuel content in diesel fuel and heating oil that go into effect in 2012. It also enables the use of oilseed crops in high value applications, constitutes a more cost effective process for refining waste from the oilseed industry, reduces the cost of producing biodiesel, allows manufacturers to diversify their product offerings and increases the performance of biodiesel for the end consumer.

Of the 10 million tonnes of canola seed produced annually in Canada, more than hall of this seed is processed elsewhere. Bioprocessing more crops in Canada benefits the Canadian economy through job creation and economic development. To meet Canada's future bioenergy and bioproducts needs, technology for processing Canadian agriculture commodities to finished products must be developed in Canada following the lead of this "pioneer" canola research that was developed in Saskatchewan.


Debbie Lockrey-Wessel is a Science Business Analyst with the Research Branch of Agriculture and Agri-Food Canada.

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Author:Lockrey-Wessel, Debbie
Publication:Canadian Chemical News
Geographic Code:1CANA
Date:Sep 1, 2010
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