Roger Cook has described the lack of a canola crushing and refining industry in WA as “nuts” as he outlined his desire for the State to do more with a product it exports around $1.2 billion worth of each year.

WA farms about 2.2 million tonnes of canola per year yet only crushes 60,000 tonnes while exporting 90 per cent of the crop overseas for processing, accounting for more than half of the nation’s canola exports.

A report released last month found while Western Australia was in a position to ramp up its canola production, the lack of local crushing or refining limited the potential economic benefits.

Speaking at a mining summit on Wednesday about fuel refineries, the Premier said it meant WA was missing out on the full value of its canola crop.

“Isn’t it nuts that we grow so much canola and we basically send it all overseas completely unrefined, probably buy some of it back as a refined product?” he said.

“We believe there’s a huge opportunity around biofuels or low-carbon liquid fuels and from that perspective we’re doing a lot of work to see what the opportunities for WA.

“In Western Australia we’ve done two things really, really well, we’ve grown crops and we’ve dug up rocks.

“What we’ve never been good at is refining those products, value adding, and then selling those products further on.”

Canola oil can be used in creating low-carbon biofuels, but is often refined in Europe.

Mr Cook said there was industry interest to advance domestic crushing.

“I’ve met with a couple of those companies that are looking for opportunities, specifically in the Great Southern region, where we’ve got a big canola capability and an agriculture sector,” he said.

“We need to continue to look at where the opportunities are, and my Government stands ready to get behind initiatives which will ensure that we can bring low carbon liquid fuels to the Western Australian economy.”

A report by Rabobank’s research division found the recent focus across the industry was predominantly to increase exports.

Report author and senior grains and oilseeds analyst Vitor Pistoia said WA was the ideal place for canola crushing expansion due to its “large, export-oriented surplus”.

“Kwinana, Albany, and Esperance stand out as the most reliable supply hubs, collectively exporting around 2.6 million tonnes in recent seasons, close to 45 per cent of national exports,” she said.

“Australia’s exportable canola surplus is overwhelmingly concentrated in WA, while New South Wales and Victoria already divert a significant share of production into domestic crushing.”