Agriculture
Bayer, Neste Lock In Pact to Expand Winter Canola Biofuel Feedstock
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Bayer and Neste have finalized a commercial agreement to jointly scale Bayer’s newgold winter canola as a feedstock for renewable diesel and sustainable aviation fuel, the companies announced on September 9, 2026, in a release datelined Monheim, Germany, and St. Louis.
The collaboration will enable Bayer to significantly expand winter canola acres in the Southern Great Plains of the United States, strengthening the oilseed supply potential of lower-carbon-intensity feedstocks. Bayer’s announcement estimates that global demand for biofuels such as renewable diesel and sustainable aviation fuel will increase almost threefold to approximately 40 billion gallons by 2040, citing the U.S. Energy Information Administration, McKinsey and Bayer internal estimates. The high-protein meal from the winter canola grain will be sold into the feed market, providing additional feed sources for dairy and beef cattle, poultry and swine.
Bayer and Neste are establishing a newgold network with additional value chain partners to support the expansion of winter canola and secure an additional market for farmers.
Frank Terhorst, Head of Strategy and Sustainability for Bayer’s Crop Science division, tied the agreement to energy security and the decarbonization of the transportation sector. “We see the Southern Great Plains as an untapped opportunity for winter canola,” Terhorst said, adding that the launch of newgold winter canola will provide farmers with a profitable rotational crop alongside wheat, improve land utilization, and offer the opportunity to participate in a growing biofuels market.
Artturi Mikkola, Senior Vice President, Renewable Products Feedstock Sourcing and Trading at Neste, said maximizing the contribution of novel raw materials requires open supply chain collaboration and that the partnership establishes a value chain in one of Neste’s key markets while developing opportunities to increase farm yields and grower income. “This renewable raw material can be scaled rapidly in the coming years, which can help meet increasing biofuels demand,” he said.
Bayer aims to launch newgold winter canola hybrids in the fall of 2027. According to the company, the hybrids combine winter-hardiness, TruFlex, its second-generation Roundup Ready trait technology, and pod shatter resistance technology, advancements Bayer said can deliver strong potential for yield performance and higher oil content. TruFlex winter canola will be sold under the newgold seed brand and is designed with the goal of acting as a new profit opportunity for Southern Great Plains growers, giving them flexibility to decide how and where the crop fits best in their operation.
The release presents biofuels as supporting the transportation sector’s energy transition where electrification may not be feasible, naming aviation, rail, heavy-duty equipment and marine applications. Biofuels can be produced from renewable organic materials such as corn, soy, canola and other intermediate oilseed crops, including winter canola. Bayer recently presented its biofuels platform at its investor day in Huxley, Iowa, where it highlighted a portfolio of intermediate biofuel crops including camelina, winter canola and CoverCress. The release describes Neste as the world’s leading producer of renewable diesel and sustainable aviation fuel.
From Memorandum of Understanding to Commercial Agreement
The commercial agreement follows a memorandum of understanding the companies announced on January 8, 2025, under which they planned to jointly scale winter canola as a biomass-based feedstock for renewable products and to develop a winter canola ecosystem in the Southern Great Plains, including product development and additional collaborations to enable Bayer to enter the market. At that time, the companies said they expected to finalize a definitive agreement in 2025.
The 2025 announcement also set out Bayer’s aim to launch hybrid TruFlex winter canola in 2027 and stated that, used as a new alternative rotational crop, winter canola helps sequester carbon in the soil and can improve soil health by increasing its organic matter content and water-holding capacity. Jennifer Ozimkiewicz, Head of Crop Strategy Soy & Biofuels at Bayer’s Crop Science Division, said at the time that the next-generation TruFlex products would give farmers a new profitable rotational crop option while offering potential sustainability benefits such as increased biodiversity and agronomic rotation to reduce pest, disease and weed pressure.
In the corporate disclosures accompanying the September 9, 2026 announcement, Bayer reported fiscal 2025 sales of 45.6 billion euros, research and development expenses of 5.8 billion euros, and approximately 88,000 employees. Neste, listed on Nasdaq Helsinki, reported 2025 revenue of 19.0 billion euros. The company expects its renewables production capacity to reach 6.8 million tons annually in 2027, with production on three continents and a network of nearly 1,000 fuel stations in Finland and the Baltics.
