Ontario perspective on
bio-lubricants
Dr. Gregory Penner
Soy 20/20 Project
Overview
• Motor oil production in Canada
• The future for soybeans
• Summary
Ontario produces 75% of Canada’s
motor oil.
Other
Alberta
Ontario
Quebec
Atlantic
0
200
400
600
800
Annual production (M litres)
1,000
Ontario produces more lubricants
than it consumes.
Other
Alberta
Ontario
Demand
Quebec
Production
Atlantic
0
200
400
600
800 1,000
Motor oil (M litres)
Vegetable oils currently cost less
than base motor oil.
$0.80
$0.75
$0.70
$/Litre
$0.65
(Cdn)
$0.60
$0.55
$0.50
G
ro
up
G
I
ro
up
G
II
ro
up
G
II+
ro
up
So
C
an
yb
ol
ea
a
III
n
oi
oi
l
l
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
Ontario chemical companies are
interested in vegetable oil.
• Willing to lease existing blending facilities.
• Willing to co-explore market opportunities.
Oil percent
Soy 20/20 Project pushing for
development of industrial soybean.
22.00%
21.00%
20.00%
19.00%
18.00%
17.00%
40%
39%
38%
37%
Protein percent
36%
35%
Crush margin
Soybean price is driven by protein.
$80.00
$60.00
$40.00
$20.00
$0.00
40%
39%
38%
37%
36%
35%
Protein content
Decreasing protein content, even with increases in oil
content results in less crush value.
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
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.
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.
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.