Co-Processing
What is Co-Processing?
Co-processing is an innovative refining technique that allows biogenic feedstocks—such as canola oil, animal fats, used cooking oil, and forestry biomass—to be processed alongside crude oil in existing refinery infrastructure. This process produces drop-in, lower-carbon fuels that are fully compatible with today’s engines, fuel distribution systems, and infrastructure.
Co-processing doesn’t require building new standalone biofuel plants. Instead, it leverages existing refinery equipment, such as hydrotreaters and fluid catalytic crackers (FCCs) to integrate renewable feedstocks and reduce the carbon intensity of fuels like gasoline, diesel, and jet fuel.
How does it work?
Biogenic materials (like canola or animal fats) are blended with petroleum feedstocks in refinery units. These blended materials are processed through conventional refining operations, converting them into renewable liquid fuels. The resulting fuels are chemically identical to their petroleum-based counterparts but have lower lifecycle carbon emissions.
Depending on the refinery configuration and feedstock, co-processing can yield:
- Renewable diesel
- Renewable gasoline
- Renewable jet fuel
- Other lower-carbon products
Current biogenic feed rates are typically around 5%, with 10% being a near-term target. Globally, some advanced operations are currently co-processing at rates upwards of 20%.
Benefits of Co-Processing
- Fast scalability – Uses existing infrastructure, reducing time and capital investment needed to increase production
- Lower cost – Significantly less capital-intensive than building new standalone biofuel facilities
- Drop-in fuel compatibility – Products work seamlessly with the current vehicle fleet and distribution system
- Energy security – Reduces reliance on imported fuels
- Economic impact – Creates jobs, stimulates investment, and strengthens agricultural and forestry sectors
- Refinery optimization – Improves utilization and enables production of in-demand fuels
- Feedstock flexibility – Can use oils, fats, and future biocrudes derived from forestry biomass (currently being studied)
- Supply diversification – Strengthens resilience of Canada’s fuel system by enabling domestic production
By the Numbers: The Opportunity Ahead
Canada is already a co-processing leader, with three refineries currently producing renewable fuels, including Parkland’s Burnaby refinery, which was the first Canadian refiner to start co-processing in 2017. Other Canadian refiners are preparing to implement co-processing at their sites.
- As of 2024, Canada consumed ~6.5 billion litres of biofuels annually.
- Over 60% of biofuels consumed in Canada were imported, mainly from the U.S.
- By 2030, demand for biofuels in Canada is expected to reach 10 billion litres.
- With the right policies in place, Co-processing could supply between 1.7 billion and 2 billion litres of that demand by 2030, significantly, support domestic value chains, strengthening the economy, and enhancing national energy security.
Based on estimates derived from a recent study commissioned by CFA from GlobalData, Co-processing projects could:
- Generate approximately $10 billion in total economic impact by 2030
- Create or sustain about 15,000 jobs across Canada
- Strengthen rural communities by opening new markets for canola and other agricultural feedstocks
- Strengthen the agricultural and forestry sectors by diversifying their markets to include energy for their residues and seed oils.
- Reduce lifecycle GHG emissions and help Canada meet its Clean Fuel Regulations (CFR) and climate targets
Canada’s Competitive Edge
Co-processing is one of the most practical, immediate, and economically sound ways to grow lower-carbon fuel production. Canada’s early adoption, proven capacity, and access to abundant biomass offer a competitive advantage and with a supportive policy environment, Canada has a unique chance to become a global leader in the co-processing field.
For more information on Canadian Co-Processing operations:
