Remember the parable of the mustard seed? Developers of three oilseed crops&mdash;relatives in the mustard family&mdash;have faith they&rsquo;ll soon have significant acreages of camelina, CoverCress and carinata seeded and harvested to meet growing demand. The exact acreages are held close to the vest, but developers are projecting tens of thousands of acres in the next few years, yielding between 1,300 and 2,500 pounds per acre, with oil yields ranging between 32 and 38%. The growing demand for renewable diesel feedstocks has already kicked the price of vegetable oils to new highs, raising hopes that growers and the developers of the new crops will reap nice profits as new capacity under construction promises to turn growth into a hockey stick-shaped curve.&nbsp; The three oilseed crops share several characteristics. Related to the more familiar canola, they are all small-seeded, high-oil-bearing crops being promoted as winter cover crops that pay a financial return, as well as provide ecosystem services. All have similar characteristics to canola oil as a biodiesel or renewable diesel feedstock. And all are considered nonfood crops with no indirect land use impacts. Winter cover crops are promoted by conservationists to stem erosion and reduce nutrient losses creating pollution issues through leaching into groundwater and surface runoff. Other ecosystem services include introducing biodiversity, which in turn reduces weed pressure and breaks disease cycles. Cover crops also provide spring blossoms for pollinators and build soil organic carbon. The major barrier to broad adoption, however, has been the farmers&rsquo; costs for seeding the crops and burning or working them down for spring planting. Common Challenges While the benefits seem clear, successfully commercializing a new crop is a steep mountain to climb. There&rsquo;s the agronomic challenge&mdash;developing crop varieties that reliably germinate and establish good stands, overwinter well and have minimal insect and disease issues. The varieties need to grow quickly in the spring and be ready for an early harvest, be easy to combine and resistant to shattering. On top of that, the development of any oilseed crop has to include ensuring the meal will be an acceptable feed. Development of better-performing varieties has been aided by land-grant university researchers for all three crops, with initial trials occurring in multiple regions for all three before developers narrowed their development efforts into their respective regions. Research plot work only goes so far, though. So, the next challenge is to find farmer cooperators willing to scale up the experiments in larger fields across a large enough area to evaluate different soils and growing conditions. For growers, a major advantage of the three new cover crops is that existing equipment can be used for planting and harvest, although the small seeds will require some adjustments. All three developers have aimed for varieties with growing seasons that don&rsquo;t disrupt traditional crop rotations in their targeted growing regions. There&rsquo;s also a significant midstream challenge to create a seed distribution network and facilities that can take in the crop after harvest and move it to the crusher.&nbsp; Crushers in canola country can readily adapt to a similarly-sized seed, but crushers in soybean country can face multiple modifications. &nbsp; Then, there&rsquo;s the downstream challenge&mdash;creating a reliable, stable market. No new crop is going to make it if growers aren&rsquo;t confident they&rsquo;ll get paid. And while USDA has aided crop research efforts through land-grant universities, the developers&rsquo; business models have to support profitable, sustainable, long-term operations. Major differences lie within the business models. CoverCress, Global Clean Energy Holdings and Nuseed&mdash;developers of CoverCress, camelina and carinata, respectively&mdash;are working in very different regions in the U.S. with their crops filling different niches with different approaches to building upstream, midstream and downstream business segments. All have landed major oil company support. CoverCress in the Midwest CoverCress is domesticated from a weed known by many names&mdash;pennycress, stinkweed, frenchweed&mdash;and infamous for the weed seed&rsquo;s ability to lie dormant and germinate for several years, earning noxious weed status in some states. Gene editing techniques were used to develop CoverCress, thinning the seed coat to achieve 90% germination, improving stands and reducing weediness. The breeding also reduced the fiber content and erucic acid compounds that would limit the meal&rsquo;s use as feed. CoverCress Inc. (CCI) was the commercial partner in the research effort involving Illinois and Minnesota university researchers.&nbsp;&nbsp;&nbsp; Working to scale up production, Dale Sorensen, CCI chief commercial officer, traveled across central Illinois and Missouri meeting with small groups of farmers this winter, holding spring field days and filming the CoverCress harvest this spring. &ldquo;It&rsquo;s blown my mind the interest farmers have shown over the winter,&rdquo; Sorensen says. He expects to recruit between 75 and 100 farmers for fall planting, with most interested in raising more than 100 acres and a few wanting to try 200 to 300 acres. The majority of acres harvested this spring will provide seed inventory for this fall&rsquo;s seeding alongside multiple 5- to 20-acre demonstration fields. With CoverCress maturing in time for a mid- to late May harvest in that region, the crop is targeted at growers interested in following CoverCress with a late-seeded soybean crop. The preceding crop can be either corn or soybeans.&nbsp; In the CCI business model, the company is supplying seed at no cost, contracting with farmers to grow the crop, and buying all of the harvested seed. &ldquo;If they manage the crop doing everything right, we&rsquo;ll do a production guarantee of 1,300 pounds per acre,&rdquo; Sorensen says. The first harvests will be heading for use as whole seeds in poultry rations, serving as a bridge market until sufficient volumes can supply a crusher, while also building potential customers for CoverCress meal. Starting in central Illinois (where CoverCress isn&rsquo;t hampered by pennycress&rsquo; noxious weed status), Sorensen says the crop could expand west to irrigated acres in Kansas and east as far as Delaware. &ldquo;That&rsquo;s greater than 30 million acres of corn and soybeans,&rdquo; he says. Having no expectation of being planted on all acres, he believes there is opportunity to reach 3 million acres in six to eight years. The midstream and downstream components for CCI firmed up this spring through expanded partnerships. In April, the company announced Bunge and Chevron were investing a combined $26 million in the company. Bunge had been early investor in CCI, and Chevron is increasing the investment made last year by its recently acquired REG. &ldquo;Bunge is taking our grain, crushing and turning it into meal and oil that they&rsquo;ll market,&rdquo; explains CCI CEO Mike DeCamp. &ldquo;Our arrangement with Bunge is unique. The value that gets created for us is tied to the value of downstream products.&rdquo; In February, Bunge and Chevron announced a joint venture through which Chevron will contribute about $600 million toward doubling Bunge&rsquo;s crush capacity at its soybean processing plants in Destrehan, Louisiana, and Cairo, Illinois. Chevron will have purchase rights for the oil feedstock, adding in the February announcement that it expects to create the capacity to produce 100,000 barrels per day of renewable diesel and sustainable aviation fuel by 2030. Camelina for the Northern Plains Global Clean Energy Holdings Inc. is taking a different approach to supply chain development for the camelina developed by its Montana-based subsidiary, Sustainable Oils. It plans to contract with farmers to grow the crop, crush the oilseed in its own facility and produce renewable diesel at its newly retrofitted California refinery. GCEH&rsquo;s downstream operations are nearly ready to go. In 2020, the company purchased a dormant oil refinery in Bakersfield, California, and began retrofitting it for renewable diesel using Haldor Topsoe technology. At full capacity, Bakersfield Renewable Fuels LLC is expected to produce 230 MMgy of renewable diesel, propane and naphtha. Future plans include building an oil crushing facility on the 510-acre campus to process the company&rsquo;s camelina and soybeans. GCEH has a long-term offtake agreement with ExxonMobil, announcing a $125 million investment from the major oil company in February. Camelina production is targeted at dryland wheat country in the Northern Plains and adjacent states&mdash;areas where the traditional practice is to grow wheat one year and leave the land fallow the following year, building moisture reserves to grow another wheat crop in year three. The low moisture requirement for a camelina cover crop doesn&rsquo;t compete, says GCEH President Noah Verleun. &ldquo;It&rsquo;s only taking the moisture they will lose anyway to evaporation.&rdquo; Furthermore, growing camelina saves farmers the inputs costs to manage weeds in the fallow year, he says. GCEH is contracting with growers and partnering with the large regional cooperative CHS for seed distribution and agronomy support, Verleun says. And because the harvest comes counter cyclically and elevators are familiar with canola handling, there&rsquo;s sufficient capacity to handle camelina. In an investor presentation on its website, GCEH says Sustainable Oil&rsquo;s contracted growers produced enough certified seed in 2019 to plant up to 110,000 acres in 2020 and enough seed would be available to double the acreage in 2022. Verleun led the company&rsquo;s regulatory efforts, securing a first-of-its-kind feedstock-only pathway in 2015 for Sustainable Oil&rsquo;s patented camelina. On the company&rsquo;s website, GCEH says its renewable diesel using camelina earns a carbon intensity score of 7 gCO2e/MJ, when a credit for meal is applied, and 23 without the meal credit. The U.S. EPA has listed camelina as an eligible Renewable Fuel Standard feedstock for advanced biofuels since 2013, which Verleun points out will generate not only a D4 RIN, but also D5 RINs (unlike soybean oil) for coproducts used as transportation fuel, such as naphtha or propane. GCEH is positioning itself to go international, having acquired a Spanish camelina company, Madrid-headquartered Espana SL, in January. &ldquo;With that acquisition, we&rsquo;ve got really strong genetics that been adapted in Europe,&rdquo; Verleun says. &ldquo;With our genetics the only fully advanced camelina genetics in the U.S., by combining them we have a dominant footprint in camelina expertise and genetics.&rdquo; Carinata in the Southeast Nuseed is preparing to commercially launch carinata in the U.S. Southeast this summer, having focused the crop&rsquo;s development in Argentina for the past five years. The company is partnering with France&rsquo;s cooperative-owned crusher Saipol, Europe&rsquo;s largest biodiesel producer, sending all of its carinata grain to France each year as it scales up production. Nuseed is a relative newcomer to biofuel feedstocks, having acquired carinata technology in 2018 from Agrisoma, which had been working on the crop in Argentina and the southeastern U.S., as well as other regions. Nuseed is a wholly owned subsidiary of Nufarm Ltd. working in Australia, Europe and North and South America with proprietary varieties of canola, sunflower, sorghum and now carinata, targeting value-added markets such as omega-3-rich canola. &ldquo;Argentina was chosen as the initial launch point for carinata because Nuseed has a strong footprint in Argentina with all four crops,&rdquo; explains Alex Clayton, Nuseed Carinata global business development lead. The company has teams across the country working on seed sales and agronomic support, plus a grower base where many employ cover crops after their main cash crop, typically soybeans.&nbsp; Another advantage for starting in Argentina, Clayton explains, is that farmers there are accustomed to supplying export markets with different requirements and willing to work with Nuseed as it figures out its regulatory approach. Shipping carinata to Europe for biofuel production requires clearing the hurdle of sustainability certification. Nuseed&rsquo;s South American carinata production is certified by the Roundtable on Sustainable Biomaterials for the European Renewable Energy Directive standard. Growers share information directly with Nuseed, data that is that is tied to their farm&rsquo;s GPS coordinates, and Nuseed then analyzes satellite images to certify the land use and grower compliance with certification requirements. A portion of the farms are audited annually. As a result, Clayton says, &ldquo;We have a very detailed knowledge of how to improve the greenhouse gas footprint of what our farmers do in the field. We&rsquo;re always looking at moving that bell curve forward by incentivizing farmers saying, if you do this practice that improves our GHG score, we&rsquo;ll pay you more.&rdquo; If the company can improve its GHG performance each year, he adds, it more than outweighs the cost. This year, Nuseed is expanding carinata acreage in South America and the U.S. while launching its first hybrid&mdash;a technology that promises more robust, hardier crops and more yield security. Carinata will not be entirely new in the U.S., as Nuseed continued the R&amp;D collaboration with land-grant universities started by Agrisoma. Nuseed has multiple plots testing the hybrid in Florida, south Georgia, Alabama and south Texas, in preparation for its U.S. launch this fall. As for midstream and downstream developments, Clayton says the company is in discussions around crush, but hasn&rsquo;t announced anything yet. In February, Nuseed announced a 10-year strategic agreement with BP, &ldquo;focused on accelerating our efforts and allows us to grow without worrying about where that grain is supposed to go,&rdquo; he says. &ldquo;BP may not consume all the oil, but they will market the oil as well.&rdquo; In those discussions, Clayton adds, &ldquo;They were asking how they could help us reach meaningful volumes by that 2024, &lsquo;25, &lsquo;26 timeline when the big demand crunch is going to come, and we start on that hockey stick growth.&rdquo; Author: Susanne Retka Schill Contact: editor@bbiinternational.com

Three developers take different approaches to filling the expected surge for demand in oilseeds with crops that promise low GHG scores. 

2022 Issue 2