Neste starts construction on renewable fuels plant

By Nicholas Zeman
Posted May 27, 2009, at 1:40 p.m. CST

Finland's Neste Oil held the official groundbreaking ceremony on Tuesday for a $940 million renewable diesel plant in Rotterdam, Netherlands. This facility, with a production capacity of approximately 240 MMgy, will be dedicated to producing the company's proprietary NExBTL fuel. It is slated to be the largest renewable fuels plant in Europe.

"We expect mechanical completion to take place sometime in early 2011," said Hanna Maula, director of corporate communications for Neste. "It will take additional time after this to ramp up production to full capacity."

A facility of this size is certain to increase the strain on the already sketchy feedstock supply situation in Europe, which is importing palm and soy oil for biodiesel refining. Some nongovernmental (NGO) associations such as Greenpeace and the World Wildlife Fund have protested the use of palm oil for biodiesel refining, saying that it is responsible for the deforestation of tropical areas in Indonesia and Malaysia. "Some NGOs do not support the use of palm oil in any capacity," Maula said. "But we do everything we can to ensure the sustainability of the palm oil we use to make renewable diesel."

Neste said it does understand that there are good players and bad players in the palm farming and production sector. "We can't be responsible for the actions of the bad players," Maula said. "But we try to trace our palm oil from the refinery back to the farm to make sure that it is produced in a sustainable way."

Neste Oil has also committed itself to only using palm oil certified by the Roundtable on Sustainable Palm Oil as it becomes available in sufficient volumes. In addition, most of Neste Oil's research spending, with an annual budget of nearly $37 million, is used in developing new renewable raw materials.

The Port of Rotterdam is an excellent location for a fuel refinery, located in central Europe, and where most shipments of virgin oils exported to Europe are destined. "Rotterdam is a very good location for us," Maula said. "It allows us to access raw material shipments and markets across Europe."

Neste Oil's refineries are located in Porvoo and Naantali, Finland, and have a combined crude oil refining capacity of about 260,000 barrels a day. The company had net sales of 15 billion in 2008 and employs about 5,200 people.