Ontario perspective on bio-lubricants

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Ontario perspective on bio-lubricants

• Dr. Gregory Penner
• Soy 20/20 Project

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Overview

• Motor oil production in Canada
• The future for soybeans
• Summary

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Ontario produces 75 of Canadas motor oil.
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Ontario produces more lubricants than it consumes.
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Vegetable oils currently cost less than base
motor oil.
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Capital investment in motor oil refining is
occurring globally.

• Capital investment in petroleum refining capacity
  is occurring elsewhere.
• Korea, 350,000 tons of group III
• Finland, 30,000 tons of group III
• China, 400,000 tons from group I to groups II and
  III
• Qatar, 1,500,000 tons of group I
• U.S. 325,000 tons total across groups
• Taiwan, 500,000 tons

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Ontario chemical companies are interested in
vegetable oil.

• Willing to lease existing blending facilities.
• Willing to co-explore market opportunities.

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Soy 20/20 Project pushing for development of
industrial soybean.
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Soybean price is driven by protein.
Decreasing protein content, even with increases
in oil content results in less crush value.
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What price point is required to change this?

• An increase of 15 in soybean oil price is
  necessary.
• This results in a price per litre of 0.65
• Higher than current canola price.
• Higher value soybean oil
• High in oleic acid

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Is an industrial soybean realistic in the future?

• Yes if
• Canola prices are driven upward by demand for
  non-transfats.
• Market demand exceeds canola oil capacity to
  supply.
• In the absence of these events canola oil will
  out compete soybean oil in industrial markets.

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Summary

• Motor oil will become a significant market
  opportunity for vegetable oils.
• Soy 20/20 Project supports the following
• Increased use of canola oil for industrial
  purposes
• Development of industrial soybean varieties.

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Industrial markets for current commodity crops is
the only way to effectively increase Canadian
crop farm profit margins.We are not going to
eat more, and the world is not going to pay more
for food.