Neste Oil, Stora Enso shelve plans for renewable diesel plant

By Erin Voegele | August 22, 2012

Neste Oil and forest products company Stora Enso are abandoning plans to build a renewable diesel plant. The two companies had applied for funding under the E.U.’s NER 300 program, but the project was not selected for an award by the European Commission.

“We have calculated the cost of the project very carefully and realistically. It would have represented a very significant investment and we concluded that we would not have gone ahead in any case, even if we had won public funding,” said Neste Oil’s President & CEO, Matti Lievonen, and Stora Enso’s CEO, Jouko Karvinen in a statement.

Neste Oil and Stora Enso first announced plans to cooperate on the development of biofuel in 2007. A jointly-owned demonstration plant was developed under the agreement, which successfully converted woody biomass into biobased diesel fuel.

The demonstration-scale plant was inaugurated by the companies in 2009. The plant featured a 12 MW gasifier and evaluated all stages of biofuel production, from biomass drying, through gasification, gas cleaning and the testing of Fisher-Tropsch catalysts. At that time, Neste Oil and Stora Enso also announced the development of a 50/50 joint venture named NSE Biofuels Oy.

In October 2010, the joint venture commenced an environmental impact assessment of two commercial-scale biorefineries. The companies estimated that the initial commercial-scale plant would represent an investment of at least EUR500 million ($624 million).

Although Neste Oil and Stora Enso will no longer pursue development of a commercial-scale plant, the companies noted that trials carried out at the joint venture pilot plant between 2009 and 2011 proved very successful. The two companies will also continue to work together to develop other products.

“Technically speaking, our work was a great success and we are very satisfied with what we achieved. Cooperation between the two companies has also been very smooth and will continue in the future in the area of other bio-based products,” said Lievonen and Karvinen.

Neste Oil already produces NExBLT renewable diesel at several locations, including the Port of Rotterdam, Netherlands and Porvoo, Finland. Those facilities take in fats and oils as feedstock.