$953m diesel plant to open by year-end

Neste Oil expects Tuas facility to meet demand for renewable diesel
Dawn Zeng Straits Times 27 May 10;

SINGAPORE will soon be home to the world's largest renewable diesel plant when Neste Oil's €550 million (S$953 million) facility comes on stream at the end of the year.

Construction is on track and into its final stages of completion, said Neste senior executives at an on-site preview in Tuas yesterday. The plant is over 90 per cent complete with production slated to start in the fourth quarter. Recruitment of more than 100 employees has also been completed.

Mr Petri Jokinen, managing director of Neste Oil Singapore, was confident that the facility would run at full capacity from the get-go and be able to help meet the anticipated high demand for its renewable diesel.

The management noted a key demand driver: the European Union directive on renewable fuels which sets a 10 per cent minimum target on the use of biofuels in transport by 2020. The plant, based on Neste's own technology, will have an annual capacity of 800,000 tonnes.

The Finnish company is setting up a plant of similar scale in Rotterdam which is expected to start up mid-next year, at a cost of €670 million. Neste also has a plant in Porvoo, Finland, producing at 380,000 tonnes a year.

'We see Singapore developing into the Asian centre for biofuels, and Neste Oil's investment here will contribute to this development,' said Mr Matti Lievonen, president and chief executive of Neste Oil Corporation. The Asia-Pacific region is a major source of feedstock for the firm, which sources palm oil from Malaysia and Indonesia.

There are concerns that an EU move to give a lower value to savings of greenhouse gas emissions deriving from palm oil could disqualify the commodity as a biodiesel source for use in Europe.

Greenpeace has also levelled allegations at some planters for clearing forests and contributing to global warming.

Neste is reportedly investigating one of its major palm oil suppliers but remains upbeat and estimates the potential market for its renewable diesel to be at least 35 million tonnes in 2020.

'The world needs new and cleaner fuels now, and we are at the forefront of delivering renewable energy with NExBTL, the cleanest renewable diesel fuel available today,' said Mr Lievonen.

Vegetable oil or animal fat is used in the Neste production process and, unlike conventional biodiesel, this renewable diesel is compatible with existing diesel vehicles and logistics systems.

Mr Lievonen's own car runs on Neste Green 100 diesel - a second-generation biodiesel made entirely out of renewable raw materials that the company started putting on trial last month.