Stinkweed to false flax: oilseeds race to reap biofuel bonanza
Send a link to a friend
[May 26, 2021] By
Karl Plume and Rod Nickel
ARENZVILLE, Illinois (Reuters) - A
disparate group met in an Illinois field on a windy spring morning to
study a crop some call stinkweed.
Botanists, businessmen, farmers and federal lawmakers, they all gathered
to peer at the waist-high plant usually considered a pest and uprooted
on sight because of its foul odor, toxicity and the grim taste it leaves
in the milk of grazing cattle.
This was a new version created by gene-editing, though. The compound
that made it stinky and poisonous in large doses was suppressed, leaving
an oilseed crop that its backers say could help the world transition to
a lower-carbon economy via biofuels, as well as meet growing demand for
livestock feed.
The group of about 25 people came to survey one of the first large-scale
plantings of covercress, the genetically tweaked version of stinkweed,
or pennycress.
It is among a handful of crops that could provide alternatives to the
world's most widely used oilseeds, soybeans and canola, crushed to
produce oil used in cooking and biofuels, plus high-protein meal for
pigs and chickens.
"How often is a brand new oilseed introduced?" Brian Engel, director of
biofuels at agribusiness giant Bunge Ltd, told Reuters after visiting
the field in Arenzville.
"We're going to do everything we can to get that seed crushed and get
the oil and meal into the marketplace."
Supplies of soybeans and canola are dwindling rapidly, with not enough
produced to keep up with global demand for food and feed products, let
alone greener fuels like renewable diesel. Prices have rocketed,
contributing to food inflation around the world.
The new candidates, which include carinata and camelina - known as false
flax - also represent potential "cover crops", off-season sources of
revenue for farmers to help insulate them from market downturns.
"The solution to this feedstock problem is going to come from a whole
lot of sources," said Jerry Steiner, executive board chairman at startup
CoverCress Inc, which is selling the edited stinkweed and has raised $22
million in funding, including from big players like Bayer AG and Bunge.
The company expects plantings of up to 1,000 acres this fall, swelling
up to 3 million acres by 2030, saying gene-editing is more accepted by
consumers than genetic modification, which introduces new genes.
LOW-CARBON ECONOMY
But it's early days for the new players.
While demand for oilseeds is rising, it is tough for niche crops to
break through as they must meet tough regulatory standards, for biofuels
in particular, and be produced at scale to be commercially viable.
Scaling up production can take years, requiring financial commitment and
risk for both the developers and the farmers who grow the new crops.
Yet the companies behind covercress and carinata spy an opportunity as
governments from Canada and California to Europe impose mandates to
reduce the carbon-intensity of fuel in an effort to meet stringent
climate goals.
Crops like covercress are particularly appealing because they soak up
carbon dioxide in the off-season, when fields would otherwise be fallow.
This new reality is putting pressure on refiners to produce fuel from
crops instead of fossil fuels and, as a consequence, biofuel demand is
forecast to grow exponentially in coming years as more renewable diesel
production capacity comes online.
A soaring global appetite for animal feed and vegetable oil has already
whittled down stockpiles of soybeans and canola. Farmers say they can't
significantly expand plantings because they must rotate crops to keep
soils healthy.
Global supplies of soybeans, by far the world's most widely used
oilseed, are set to hit a five-year low of 86.5 million tonnes by
September, while demand is expected to reach a record high, the U.S.
Department of Agriculture says. Demand from soybean processors that
crush it into oil and meal has swelled 45% over the past decade, while
production has grown just 37%.
In the United States, demand for soybean oil could outstrip production
by up to 8 billion pounds annually within two years if just half the
announced refinery expansion projects are completed, according to BMO
Capital Markets.
[to top of second column] |
Bottles of covercress seeds and oil are seen at an Illinois State
University laboratory in Normal, Illinois, U.S. May 6, 2021. Picture
taken May 6, 2021. REUTERS/Karl Plume
A consequent surge in prices for soybeans and canola has helped drive the United
Nation's broader food price index to its highest level since 2014, stinging
developing countries.
'IT IS A RARE CROP'
This year, for the first time, Argentine farmer Horacio Merialdo plans to sow
carinata, a towering plant crowned with yellow flowers, another new oilseed
hoping to make it big.
Merialdo said he would plant carinata in the off-season from growing soybeans,
and its deep roots would carve channels that allow rain to seep deep into the
soil, and stop weeds flourishing, benefiting the later soybean crops.
He is using seeds supplied by Nuseed, part of Australian agrichemical company
Nufarm Ltd, which launched commercial sales last year of carinata in Argentina.
Those plantings are currently less than 100,000 hectares, but the company
expects them to double within two years and rise exponentially in subsequent
years as it expands production to the United States, Paraguay and Uruguay.
"We experienced the industry repeatedly asking us to go faster, so we've ramped
up those plans," said Alex Clayton, Nuseed's business development lead for
carinata.
Yet the perils of plowing his own, experimental furrow are not lost on Merialdo.
"The prospects are good but the risk is that it is a rare crop, with a single
price maker and a single buyer," said Merialdo, who farms in the Pampas
grain-belt town of Suipacha, in Buenos Aires province. "So there is less
certainty."
'I CAN'T PRODUCE ENOUGH'
Nuseed currently sells all carinata production to Saipol, France's largest
biodiesel producer.
Saipol itself is also working on developing new crops, such as the flowering
oilseed camelina, to produce biodiesel alongside the fuel it makes largely from
rapeseed, a close cousin of canola, said CEO Christophe Beaunoir.
Unlike some new oilseeds like covercress, which have not previously been
cultivated, farmers already grow camelina in small quantities for use in fish
rations and in health products for dogs and horses.
Smart Earth Seeds, a Canadian seed developer and producer of camelina oil, said
the crop was now catching the demand wave lifting soybean and canola prices,
more than tripling the company's sales this year.
"I just can't produce enough," CEO Jack Grushcow said.
REFINERS: CAUTIOUS INTEREST
Yet it is a long road for new hopefuls.
"The trick will be whether we can get enough farmers to be interested and
comfortable," CoverCress CEO Mike DeCamp said.
Whole seeds will be sold as poultry feed, with crushing into oil and meal
expected to begin in 2025, he added.
Niche crops' use in biofuels is so far limited. The U.S. Environmental
Protection Agency said it was reviewing one fuel facility's request for approval
of carinata as a credit-generating feedstock under the Renewable Fuel Standard.
Camelina is already approved.
With production of such oilseeds currently small, refiners are cautious about
building plants that rely on them.
Covenant Energy will produce renewable diesel from canola at its planned
Saskatchewan refinery, but the facility will also be able to use carinata and
camelina, CEO Josh Gustafson said.
Joel MacLeod, CEO of Tidewater Midstream and Infrastructure, is planning to
produce 3,000 barrels per day of renewable diesel and renewable hydrogen in
total at its refinery in Prince George, British Columbia.
"On camelina and carinata, we definitely have an interest," he said. "But we
can't have massive swings in our blend, month over month."
(Reporting by Rod Nickel in Winnipeg and Karl Plume in Arenzville, Illinois;
additional reporting by Hugh Bronstein in Buenos Aires and Sybille de La Hamaide
in Paris; Editing by Caroline Stauffer and Pravin Char)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |