"Neste’s ability to source, treat, and process a wide range of waste and residues is one of our key competitive advantages and we have developed a very efficient global sourcing operation."
Neste announced the single largest investment in the company’s history to expand its renewable solutions’ production capacity in Singapore. Why is this investment important?
In late 2018, we took the decision to invest into expanding our production capacity in Singapore. The investment is expected to be approximately €1.5 billion and will extend our production capacity by up to 1.3 million tonnes/ year (t/y) in Singapore, bringing our global capacity close to 4.5 million t/y in 2023, when the project is completed. The added capacity is in response to the greater push towards emissions reductions, and it will also provide Neste with the option to supply sustainable aviation fuels at a larger scale. This new facility will also increase our capabilities to process and pre-treat lower-quality waste and residue raw materials. This investment is testimony to Neste’s vision to lead the way towards a sustainable future together and our purpose to create a healthier planet for our children.
Could you tell us about Neste’s ambition in providing sustainable aviation fuel, and Neste’s footprint in other industries?
Neste’s sustainable aviation fuel (SAF) annual capacity is currently 100,000 t/y. With the Singapore refinery expansion on the way, and with possible additional investment in Europe, Neste will have the capacity to produce about 1.5 million t/y of SAF in 2023.
On top of renewable diesel and sustainable aviation fuel, Neste has built new business around renewable polymers and chemicals. Together with polymers producing partners, we have already produced the world’s first industrial scale volumes of bio-based polypropylene and polyethylene for uses in several plastics applications. With several plastics value chain partners, Neste is developing technologies and capacity to chemically recycle plastic waste into drop-in raw material for high-quality new plastics and chemicals. During fall 2020, we successfully completed our first industrial scale processing run at our refinery in Finland to produce commercial volumes of more sustainable feedstock for new high-quality, high-performance polymers and chemicals from liquefied waste plastic. Chemical recycling will complement conventional mechanical recycling of plastic and enable upcycling of those plastic waste streams that cannot currently be recycled, such as colored, multilayer and multi material plastic packaging.
Could you tell us more about Neste’s upstream integration in the value chain of renewable feedstock?
Neste’s ability to source, treat, and process a wide range of waste and residues is one of our key competitive advantages and we have developed a very efficient global sourcing operation. In recent years, we have accelerated our work to capture a greater share of waste and residue streams through strategic acquisitions. For instance, in 2018 we acquired a majority stake in animal fat trader Demeter, based in the Netherlands, and in 2020, we acquired 100% of Mahoney Environmental, a US collector and recycler of used cooking oil. Such acquisitions enable us to integrate deeper into the raw material value chain. In 2019, we opened offices in China and Australia to focus on renewable raw material sourcing in the region. It is important for us to establish a local presence in the regions we source our raw materials from to ensure control over the quality of the materials and more importantly, the sustainability of the sourcing process. I want to highlight that sustainability is at the core of Neste’s business and we only select suppliers that meet the highest requirements on sustainability and human rights.
We have used several data sources for analyzing the availability of waste and residues globally and expect that the global availability of waste and residue oils and fats suited for our current production technology will grow to over 35 million tons by 2030. While we continue to work towards increasing the availability of these raw materials, we are also developing innovative technologies to enable us to also process other types of raw materials, such as agricultural and forestry residues and municipal solid waste, among others. Currently, waste and residues account for over 80% of our renewable raw material inputs globally and we expect them to be close to 100% by 2025.
How is demand for biofuels changing, and what is the role of policy in driving this change?
We have seen a growing global awareness of the need and urgency to fight the effects of climate change. Many countries are adopting, or planning to adopt, carbon neutrality targets, such as the European Union (by 2050), Finland (2035), Sweden (2045), Japan (2050), and China (2060). These are targets more ambitious than those prescribed by existing regulations in Europe and North America such as the Renewable Energy Directive (RED II), the Renewable Fuel Standards (RFS) and Low Carbon Fuel Standards (LCFS).
Could you share a final message?
Neste’s strategy is called ‘’Faster, Bolder and Together’. It reflects the understanding that there is no time to lose in combating climate change or helping to tackle the waste plastic challenge. In order to succeed, we need to act, innovate new solutions and deliver them faster and bolder than ever before – together.