Bayer and renewable fuels producer Neste have moved beyond an initial memorandum of understanding (MOU) signed last year by finalising a commercial agreement to jointly scale Bayer’s newgold® winter canola, a feedstock the companies believe can help meet rising demand for renewable diesel and sustainable aviation fuel (SAF).
The agreement marks the next phase of a collaboration first announced in January 2025, when the companies revealed plans to explore the expansion of winter canola as a biomass-based feedstock for renewable products. The new commercial deal formalises that relationship and establishes a route to market for farmers as Bayer prepares to launch its newgold® winter canola hybrids in autumn 2027.
From intention to commercial execution
While the original MOU focused on cooperation and supply chain development, the commercial agreement commits the companies to building a dedicated value chain around winter canola production in the Southern Great Plains of the US.
The partners say the crop could significantly increase supplies of lower-carbon-intensity feedstocks for renewable fuel production while also generating high-protein meal for livestock feed markets.
Importantly, Bayer is increasingly framing the opportunity through the lens of energy security as well as decarbonisation.
“In times of geopolitical tensions, the need for more energy security and resilience while decarbonizing the transportation sector leads to growing demand for renewable fuel,” said Frank Terhorst, head of strategy and sustainability for Bayer’s Crop Science division.
“This agreement further underscores Bayer’s commitment to help scale biofuels production.”
Geopolitics adds urgency to biofuels expansion
For Bayer, the commercial agreement reflects a growing belief that renewable fuels are becoming strategically important as governments seek to reduce exposure to volatile global energy markets.
The company noted that demand for renewable diesel and SAF is expected to grow substantially over the coming decades, with global biofuels demand forecast to approach 40 billion gallons by 2040.
That demand is particularly significant in sectors where electrification remains challenging, including aviation, marine transport, rail and heavy-duty equipment.
Against this backdrop, Bayer sees winter canola as an opportunity to create an additional domestic supply of renewable fuel feedstocks while giving growers a new rotational crop option.
“We see the Southern Great Plains as an untapped opportunity for winter canola,” said Terhorst. “The launch of newgold® winter canola will provide farmers with a profitable rotational crop with wheat and improve land utilization, while offering the opportunity to participate in a growing biofuels market.”
Building a new value chain
As part of the agreement, Bayer and Neste are establishing a newgold® network with additional value chain partners to support acreage expansion and ensure market access for growers.
“Maximizing the contribution of novel types of raw materials to support growth in renewables requires open supply chain collaboration,” said Artturi Mikkola, senior vice president of renewable products feedstock sourcing and trading at Neste.
“By building robust value chains, we can turn agricultural innovations into scalable realities for growers and energy markets.”
A wider biofuels strategy
The deal also highlights Bayer’s broader ambitions in renewable fuels. Earlier this year the company showcased its biofuels platform, including winter canola, camelina and CoverCress™, positioning intermediate oilseed crops as an emerging growth area for both agriculture and energy markets.
The finalisation of the Neste agreement suggests Bayer is now moving from demonstrating the potential of those crops to establishing commercial supply chains.
