Neste Oil could buy 2.4 million to 2.5 million tonnes of vegetable oils for four biofuel plants, putting the Finnish refiner on par with consumer goods giant Unilever as a top vegetable oil buyer.
The bulk of Neste Oil’s vegetable oil purchases will come from palm oil, currently the cheapest in the world.
Here are some facts about Neste Oil and its growing palm oil use.
- Neste Oil has developed biofuel technology that allows flexible use of any vegetable oil or animal fat for producing its NExBTL fuel. The fuel does not need to be blended with fossil diesel and can be used as it is for the transport sector.
- Palm oil will make up the bulk of the refiner’s feedstock. Analysts say this may narrow palm oil’s discount to soyoil below $100 a tonne.
- In Finland, Neste Oil has two plants producing NExBTL, which has been marketed as the world’s cleanest fuel. The combined capacity of the factories stand at 350,000 tonnes.
- Neste Oil has invested a combined 1.22 billion euros to build one biofuel plant in Singapore and another in Rotterdam that each have a capacity of 800,000 tonnes. The Singapore plant will be completed in 2010 and the Rotterdam factory in 2011.
- The firm is part of the Roundtable on Sustainable Palm Oil (RSPO) — a grouping of planters and consumers who have developed a certification system that includes commitments to preserve wildlife and forests when expanding estates.
- Neste Oil, which has committed to use only certified palm oil by end-2015, will still make its own greenhouse gas assessments on crude palm oil sourced through the RSPO.
- The Finnish refiner now applies the segregation method to its supply chain system that allows for the mixing of certified green palm oil with those produced by non-RSPO plantations.
- It may go over to mass-balancing its supply chain, which means Neste Oil will administer the mixing of these two type of palm oil available so that they know the conditions and the farming methods of their suppliers.
- Neste Oil dropped to an underlying operating loss in the fourth quarter due to weak margins and said it expected 2010 to be challenging.