AbstractEpoxidation of canola oil was carried out using a peroxyacid generated in situ from hydrogen peroxide and a carboxylic acid (acetic or formic acid) in the presence of liquid inorganic acid, H2SO4, as catalyst. Acetic acid was found to be a better oxygen carrier than formic acid as it gave about 11% more conversion of ethylenic unsaturation to oxirane than that given by formic acid under otherwise identical conditions. A high temperature of above 65 °C is significantly unfavourable for achieving high oxirane numbers, as the selectivity to oxirane ring opening reaction increases. Higher concentrations (above 0.5 mol/mol of ethylenic unsaturation) of acetic acid, formic acid or hydrogen peroxide are also detrimental (mainly, the carboxylic acids) but much less than that of the temperature effect. From a detailed process developmental study, the parameters optimised were a temperature of 65 °C, acetic acid‐to‐ethylenic unsaturation molar ratio of 0.5, hydrogen peroxide‐to‐ethylenic unsaturation molar ratio of 1.5 and sulphuric acid loading of 2%. A relative conversion to oxirane of 81% and an iodine value conversion of 86.5% were obtained under the optimum reaction conditions. The formation of the epoxide as well as ring‐opened product of canola was confirmed by FTIR and 1H NMR spectral analysis. From a kinetic analysis, the activation energy of this commercially important reaction was determined to be 10.7 kcal/mol. The findings of this study show that hydroxylated canola oil can be used as a starting material for the lubricant formulations. Copyright © 2010 Curtin University of Technology and John Wiley & Sons, Ltd.