Bayer and bp Form Strategic Alliance to Scale Camelina for $40 Billion Biofuels Market by 2040

Bayer and bp have entered a long-term strategic alliance to jointly scale the cultivation of camelina, an oilseed crop targeted at biodiesel, renewable diesel and sustainable aviation fuel production. The partnership will commercialise the crop under Bayer's newgold brand, starting in North America before expanding to additional markets. The alliance combines bp's expertise in fuels and refining with Bayer's leadership in seed technology and access to a global farmer customer base, addressing a structural gap in low-carbon feedstock supply.

 

Why the Alliance Matters Now

 

The collaboration targets a renewable fuel market that is projected to nearly triple to 40 billion gallons by 2040, driven by mandates and corporate procurement across biodiesel, renewable diesel and sustainable aviation fuel. Demand growth at this pace cannot be met by traditional feedstock sources alone, particularly without intensifying competition between food and fuel uses of agricultural land. Building dedicated intermediate oilseed supply chains is therefore central to the long-term viability of the low-carbon fuels sector.

Camelina has emerged as a particularly attractive option because it can be grown without displacing food crops, complementing rather than competing with traditional rotations. Its agronomic profile and processing characteristics align with the technical requirements of refiners producing renewable diesel and SAF, which makes it suitable for integration into existing biofuel production infrastructure. The combination of expanding demand and limited feedstock options creates a clear strategic rationale for dedicated commercial-scale development.

 

The Camelina Agronomic Profile

 

Camelina is a winter-hardy oilseed with pod shatter resistance and drought-tolerant characteristics, making it suitable for cultivation on idle or fallow land and between traditional main crop rotations. The crop also requires lower agronomic inputs than many conventional alternatives, supporting better unit economics for farmers and a lower lifecycle carbon footprint for the resulting fuel. These features collectively underpin the crop's promising lower-carbon intensity profile within renewable fuel value chains.

The crop's flexibility allows it to be grown across spring and winter cycles, expanding the geographic and temporal range over which it can be planted. This versatility supports its role as an intermediate or rotational crop that contributes to good agronomic management while diversifying farmer income. Bayer has already introduced newgold camelina in the Northern Plains of the United States and the Southern Saskatchewan and Southern Alberta regions of Canada, with testing of long and short season biotypes currently underway.

 

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Strategic Roles for Each Partner

 

Bayer brings its industry-leading seed breeding capabilities, agronomic research infrastructure and direct relationships with farmers across multiple geographies. The company acquired camelina assets in January 2025 and has since been ramping up production capacity in preparation for full-scale commercial launch. Frank Terhorst, Head of Strategy and Sustainability for Bayer's Crop Science division, said the alliance helps connect the value chain necessary to bring camelina to market while giving farmer customers greater market certainty when considering the crop on their farms.

bp contributes deep expertise in fuel processing, refining and downstream offtake into established renewable fuel markets, particularly for renewable diesel and sustainable aviation fuel. Philipp Schoelzel, Senior Vice President for Biofuels Growth at bp, said the collaboration represents bp at its best, working with trusted partners with complementary capabilities to develop products that customers want and need. The combination of seed innovation and refining infrastructure addresses both ends of the camelina value chain simultaneously.

 

Farmer Economics and Land Use Considerations

 

The newgold camelina seed brand has been designed to function as a profit multiplier, giving growers the flexibility to determine how and where the crop fits best within their operations. As an intermediate crop, camelina can add value between traditional growing seasons, while in rotations it can contribute to soil and pest management while diversifying farmer income streams. On marginal or underutilised land, the crop can convert otherwise low-yielding acres into more productive assets.

This flexibility is intended to allow farmers to participate in the low-carbon fuel economy while maintaining control over their agronomic and financial decisions. The model preserves food production capacity on prime agricultural land while opening new revenue opportunities on land that might otherwise sit idle. The combination supports broader rural economic outcomes alongside fuel sector decarbonisation, which is increasingly important for the political and regulatory durability of biofuel policy.

 

The Role of Biofuels in Sector Decarbonisation

 

Biofuels are expected to play a critical role in decarbonising segments of the transportation sector where direct electrification is not technically or commercially feasible. Aviation, rail, heavy-duty road transport and marine shipping all face structural barriers to full electrification because of energy density, refuelling requirements and existing infrastructure. Drop-in fuels derived from renewable feedstocks offer a practical pathway to reduce lifecycle emissions in these segments without requiring fleet replacement or major infrastructure investment.

The diversification of feedstock sources beyond traditional corn, soy and canola is increasingly important as policy frameworks tighten around indirect land use change and food and fuel competition. Camelina and other intermediate oilseed crops provide a way to expand renewable fuel supply without expanding agricultural land use or displacing food production. This characteristic is becoming particularly important in jurisdictions where sustainability criteria for biofuels are tightening.

 

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Market Implications and Supply Chain Build-Out

 

The Bayer and bp alliance illustrates how upstream agricultural and downstream refining companies are increasingly aligning to build dedicated low-carbon fuel value chains. Traditional spot-market sourcing of feedstock has limitations at the scale required for emerging fuel mandates, particularly in aviation where SAF requirements are tightening rapidly across major jurisdictions. Vertically aligned partnerships provide the volume certainty, quality consistency and traceability that compliance markets increasingly demand.

The North American launch positions the alliance to serve some of the largest near-term sustainable fuel demand markets, including United States Renewable Fuel Standard volumes and emerging SAF mandates across multiple states. The partners are likely to expand into additional geographies as production scale and processing infrastructure mature. The model could also serve as a template for similar collaborations focused on other intermediate oilseed crops or specialised low-carbon feedstocks.

 

Outlook for Intermediate Oilseed Crops

 

The Bayer and bp partnership signals a broader strategic direction in which agricultural innovation and energy sector demand are converging around the development of dedicated low-carbon feedstock supply chains. Continued growth in renewable diesel and sustainable aviation fuel demand is expected to drive sustained investment in seed development, agronomic research and processing infrastructure for crops such as camelina. The trajectory of the broader biofuels market will be closely tied to the success of these supply chain build-outs.

Whether camelina achieves the scale needed to meaningfully support the 40 billion gallon market projected for 2040 will depend on farmer adoption, seed innovation, processing capacity expansion and continued policy support for low-carbon fuels. Sustained execution by the Bayer and bp partnership would establish camelina as one of the more important emerging biofuel feedstocks of the next decade. The alliance also reinforces the strategic value of cross-sector partnerships in addressing the complex supply chain requirements of the energy transition.

 

Source: Bayer