Bayer and Neste have signed a memorandum of understanding (MOU) to jointly scale winter canola as a biomass-based feedstock for renewable products like biofuels.
The companies aim to develop a winter canola ecosystem in the Southern Great Plains of the US, including product development and additional collaborations to enable Bayer to enter this market.
Renewable fuels are seen as increasingly important in efforts to combat climate change and transition to a more sustainable energy future.
According to Bayer and Neste, renewable fuels play a key role in decarbonising the transportation sector as electrification will take time in the hard-to-abate sectors, such as aviation.
They claim renewable fuels have a lower carbon intensity than fossil fuels and can significantly reduce greenhouse gas emissions over the life cycle compared to traditional fossil fuels, playing a key role in mitigating climate change.
On top, they can provide farmers with new revenue streams through the cultivation of biomass-based feedstocks.
But the sustainable aviation fuel (SAF) market is nascent and as the industry evolves, it is not clear cut which new feedstock sources and production technologies will play a role in achieving carbon reduction targets in aviation.
“Renewable fuels are playing an important role in the decarbonisation of transportation and energy while global targets continue to shape biofuel markets and accelerate demand for biomass-based feedstocks going forward,” said Frank Terhorst, head of strategy and sustainability for Bayer’s Crop Science Division.
“We are committed to supporting farmers’ ability to deliver low-carbon feedstocks on demand, through investments in new crops like winter canola and advancements in sustainable cropping systems.”
Bayer aims to launch a specialised variety of winter canola, called TruFlex, in 2027. Used as a new alternative rotational crop, it says winter canola helps sequester carbon in the soil and can improve soil health by increasing its organic matter content and water-holding capacity, leading to enhanced soil fertility and productivity.
The new partnership with Neste therefore hopes to enable profitable new crop options for farmers, while delivering on the unmet demand for renewable fuel, said Jennifer Ozimkiewicz, head of crop strategy soy and biofuels at Bayer’s Crop Science Division.
“We believe our next generation TruFlex products will provide farmers a new profitable rotational crop option, while offering potential sustainability benefits such as increased biodiversity, soil health and agronomic rotation to reduce pest, disease and weed pressure. Bayer is committed to continue to lead the way with alternative biomass-based feedstocks and regenerative agricultural solutions.”
What’s the outlook for sustainable aviation fuel?
The new partnership between Bayer and Neste also comes amid warnings that the incoming President Trump administration might do away with the 45Z Clean Fuels Production tax, a move which would threaten the development of the SAF market.
45Z is a tax incentive introduced by the Inflation Reduction Act that aims to promote the production of cleaner transportation fuels by offering higher incentives for fuels with lower carbon intensities.
Trump is yet to make public statements about the 45Z credit but has referred to the Inflation Reduction Act as the “Green New Scam”.
An expert panel at the upcoming at World Agri-Tech Summit in San Francisco will explore the outlook for the SAF sector and look at how US farmers can access SAF supply chains profitably and sustainably.
Leading up to launch, Bayer will work with Neste, the value chain, and farmers to introduce winter canola as a biomass-based feedstock that aism to delivers fuel with lower carbon intensity than traditional fuel sources. Bayer and Neste expect to finalize a definitive agreement in 2025.
“This collaboration with Bayer strengthens our strategy to develop together with value chain partners regenerative agriculture concepts that can be scaled up and can play an important role in diversifying and growing the raw materials pool for all of our renewable products,” added Artturi Mikkola, senior vice president, feedstock sourcing and trading at Neste.
“We believe winter canola can bring environmental benefits to cropping systems and result in lower carbon intensity feedstocks that help replace fossil resources with renewable raw materials.”
