Viterra’s plan to build the world’s largest canola processing facility in Regina could be crushed, according to a new report.
The United States Department of Agriculture’s Foreign Agricultural Service (FAS) said the project was placed in limbo in 2024 after Bunge announced it was acquiring Viterra for US$8 billion.
“It is under review, but industry contacts say plant construction is unlikely to go ahead,” the FAS stated in a March 31 report on Canada’s oilseed sector.
A Viterra spokesperson said the company remains focused on its integration with Bunge to ensure a smooth transition for customers across its asset network.
“We expect to complete the merger shortly, and we should be able to provide an update (on the Regina crush project) in the near future,” he said in an email.
If the FAS report turns out to be accurate it would be the second major Regina crush project to be mothballed.
Earlier this year, Federated Co-operatives Ltd. (FCL) paused plans to build its $2 billion Integrated Agriculture Complex at Regina for “the foreseeable future.”
The plan included a canola crush facility jointly owned with AGT Food and Ingredients capable of processing 1.1 million tonnes of seed per year and a renewable diesel plant capable of producing 870 million litres of the fuel.
FCL cited “regulatory and political uncertainty, potential shifts in low-carbon public policy and escalating costs,” as the reasons behind its decision to pause the project.
Codie Nagy, a canola grower who farms near Ogema, Sask., said it is “unfortunate” that these mega-projects appear to be falling by the wayside.
“There was a whole lot of optimism,” he said.
Cargill is still proceeding with construction of its Regina crush facility, which is expected to be operational this fall. It will be capable of processing 1.1 million tonnes of canola annually.
Nagy said one new plant is good, but three would have been much better.
He currently trucks most of his canola to the Yorkton crush plants, which are located three hours away from his farm.
Nagy is excited by the prospect of the much shorter one-hour trip to Cargill’s new Regina plant once it is up and running.
“Off the top of my head it would be about 50 cents a bushel cheaper driving it to Regina than Yorkton,” he said.
“If a guy is selling, say, 100,000 bushels of canola in the winter, if you can save 50 cents a bushel that’s $50,000.”
Viterra’s project would have been a whopper. The plan was to build a facility with an “initial” annual targeted crush capacity of 2.5 million tonnes of seed, more than double the size of Cargill’s facility.
It was supposed to be operational in late-2024 but there wasn’t even a shovel in the ground at that time.
If Viterra’s plant doesn’t come to fruition, it will be the third major Saskatchewan project to be sidelined.
Ceres Global Ag Corp. announced in 2022 that it was suspending plans to build a facility at Northgate, near the Canada-U.S. border.
The $350 million project would have had the capacity to process 1.1 million tonnes of canola annually into more than 500,000 tonnes of oil.
The cancelled projects are piling up and Canada’s once ballyhooed crush expansion is turning out to be less than advertised.
“While crush capacity growth has been significant, it falls short of the 59 per cent growth that was once expected to occur between 2021 and 2025,” the FAS stated in its report.
Once the new Cargill plant is up and running later this year, the national capacity will be 28 per cent higher than 2021 levels, or about half as much as originally anticipated.
The same goes for the renewable diesel plants that were supposed to be fueling that crush expansion.
Canada has the Braya Renewable Fuels plant in Come by Chance, N.L. , and the Tidewater Midstream plant in Prince George, B.C.
Together they can produce nearly one billion litres of the fuel per year.
Imperial Oil will double that capacity when it completes construction of its facility in Strathcona, Alta., later this year.
But another eight projects have either been cancelled or put on hold, including FCL’s massive facility planned for Regina, according to the FAS.
Canada also has six biodiesel plants with a combined capacity of 601 million litres per year.
Canada’s renewable diesel and biodiesel plants consumed 1.06 million tonnes of canola oil and soybean oil in 2024, a staggering 146 per cent increase over the previous year.
The FAS said that had everything to do with the sunsetting of the U.S. biodiesel tax credit in December 2024 and not Canada’s Clean Fuel Regulations.
U.S. fuel suppliers maximized imports of Canadian biodiesel and renewable diesel under the old program because imported fuel no longer qualifies under the new 45Z production tax credit that took effect in January 2025.
That wave of imports has now subsided and many of Canada’s biodiesel and renewable diesel plants have been operating at lower capacity since January or have been temporarily shuttered, according to the FAS.
That has resulted in a significant reduction in canola oil and soybean oil demand from Canada’s biofuel sector.
Canadian canola oil sales to the U.S. are also under threat by shifting regulations. Preliminary guidance for the coveted 45Z tax credit indicates that canola oil-based fuels no longer qualify for the credit.
Meanwhile, California’s Air Resources Board has proposed capping biodiesel and renewable diesel produced from soybean and canola oil at 20 per cent of a company’s annual output.
There are also question marks surrounding Canada’s Clean Fuels Regulation (CFR), which took effect in July 2023.
FAS said Canada’s plan to transition away from canola seed exports to canola oil and fuel exports is challenged by the cancellations of crush and renewable fuel projects and by the country’s transportation infrastructure.
“Canadian railway lines and vessel ports are unequipped to handle canola oil export diversion away from the United States,” the FAS stated in its report.
It noted that the Port of Vancouver handled 900,000 tonnes of canola oil in 2024, nearly double the volume of the previous year.
It only has the capacity to handle one million tonnes through its facilities including the Fraser Surrey Canola Oil Transload Facility and Pacific Coast Terminals.
