FCL Pauses Plans for New Canola Crush Plant; Renewable Diesel Facility

Federated Co-Operatives Ltd. (FCL) has put on hold plans for a new canola crush plant and renewable diesel production facility in Regina. 

Three years to the day the projects were initially announced, FCL said Friday that due to regulatory and political uncertainty, potential shifts in low-carbon public policy, and escalating costs, the two projects, as originally conceived, “are paused for the foreseeable future.” 

“The decision to press pause on these two projects is not one we took lightly,” said Heather Ryan, FCL CEO. “When making this decision, we undertook a robust due-diligence process, that carefully considered our best pathway to meet compliance obligations, while ensuring investments are appropriate, provide value and benefit to the Co-operative Retailing System and support our short and long-term sustainability goals.” 

FCL announced the signing of a memorandum of understanding to form a joint venture partnership with AGT Food and Ingredients in January 2022. The plan was for the joint venture to construct a $360 million canola crush facility, with FCL holding the majority ownership stake. Meanwhile, the canola crush facility was to supply approximately 50% of the feedstock required for FCL’s wholly owned 15,000-barrel-per-day renewable diesel plant. The remainder of the feedstock supply was to be contracted from other canola crush facilities. 

The FCL project was among a number of crush plant announcements three and four years ago that were expected to help expand domestic canola crush capacity from the current approximately 11.2 million tonnes annually to just over 17 million over the next five years.    

The planned merger between Bunge and Viterra – which was just greenlighted by the Canadian government earlier this week – has also sparked uncertainty about Viterra’s planned 2.5-million tonne capacity crush plant that was originally announced in April 2021. 

Ceres Global Ag has already shelved its crush plant plans, announcing in June 2022 that it was suspending a new 1.1 million tonne capacity canola crush plant at Northgate SK. 

On the other hand, Cargill said in July that its new canola crush plant in Regina was half complete and expected to be operational sometime later this year.  

In 2021, Richardson International said it would double the capacity of its Yorkton, SK crush facility to 2.2 million tonnes, a project that is now up and running. 

Louis Dreyfus Company announced in April 2023 that it was expanding its canola processing facility in Yorkton, SK. The project will double the company’s annual crush capacity to over 2 million tonnes, with work still ongoing.