April 27 (Reuters) - Global grains merchant Bunge Ltd is updating select U.S. crushing facilities to process covercress, a gene-edited version of an annual weed known as field pennycress, that it says can be used to produce renewable fuel, the company said on Wednesday.
Bunge and oil company Chevron Corp late on Tuesday announced a strategic partnership with CoverCress Inc, the privately owned startup that developed the oilseed and will contract with farmers to grow it as a winter cover crop between corn and soybean plantings.
The deal comes amid rising demand for biofuels and tightening global vegetable oil supplies after top palm oil producer Indonesia has banned exports and the Russia-Ukraine war disrupted sunflower oil shipments from the world’s top two exporters.
Under the agreement, Bunge will process the covercress seeds into animal feed as well as vegetable oil that Chevron can use to produce biofuels such as renewable diesel via a Chevron-Bunge joint venture.
The companies did not disclose financial terms of the partnership.
Covercress is a low carbon intensity crop that U.S. Midwest farmers would plant as a soil sustaining cover crop after harvesting corn in the autumn. The seeds, which would be harvested before soybean planting in the spring, can be fed directly to livestock or poultry or crushed for meal and oil.
It may be years before covercress oil will meaningfully add supply to the global vegetable oils market, but Bunge is making “incremental” investments now, Bunge Chief Executive Greg Heckman said during an earnings day conference call with analysts.
“We’ve got planned projects in place today that have been approved and under way to be able to accommodate processing covercress at our selected facilities, especially those related to the Chevron JV,” John Neppl, Bunge’s chief financial officer added. (Reporting by Karl Plume in Chicago; Editing by Sandra Maler)
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