Canada canola to qualify for U.S. biodiesel: group

WINNIPEG, Manitoba (Reuters) - Approval of Canadian crops such as canola and corn for use in U.S. biofuels is "imminent" the head of the Canola Council of Canada said on Thursday.

Canola Council president JoAnne Buth said she expects the U.S. Environmental Protection Agency on Thursday or Friday to formally approve Canadian crops as a renewable biomass.

That designation will allow Canadian canola and corn to receive a renewable identification number so U.S. biofuel makers can collect tax credits for using them, she said.

"I suspect we will see more canola moving into the U.S. now," Buth said in an interview.

ICE Canada canola futures were up 1.5 percent around midday and one trader said talk of an imminent approval for use in U.S. biodiesel may have given it the support.

Last year, the EPA placed canola oil on an equal footing with soyoil, ruling that it emits low enough greenhouse gas levels to qualify for the U.S. mandate to increase renewable fuel production.

That decision allowed biodiesel makers to get credits for using U.S. canola, but Canadian crops did not qualify.

Approval as a renewable biomass would follow assurances from the Canadian government that Canadian crops have not brought new land into production since before 2008, Buth said.

A spokeswoman for the EPA could not immediately comment on requirements for canola's use in U.S. biodiesel.

Canada is the world's top exporter of canola, a rapeseed variant that is used mostly for vegetable oil and livestock feed.

It is normally a net importer of corn.

The U.S. Congress has set a goal of blending 36 billion gallons of renewable fuel into transportation fuel by 2022.

(Reporting by Rod Nickel; Editing by David Gregorio)