Neste rejects NGO claim that its renewable aviation fuel includes palm oil
Neste and Air BP agreed in October 2018 to explore opportunities to increase the supply and availability of sustainable aviation fuel for airline customers
Wed 30 Jan 2019 – Renewable fuel producer Neste has rejected a report by NGO Biofuelwatch that claims the Finnish company is using palm oil in its aviation product. Neste is the world’s largest producer of renewable diesel and the world’s largest company producing renewable fuel from waste and residue raw materials. It is also said to use between one and two per cent of the world’s palm oil production, although since 2013, the company has only used crude palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO). However, reacting to the report, Neste says it is not using palm oil as a raw material for its renewable aviation fuel. Meanwhile, it is reported elsewhere the Malaysian aviation industry is supporting government efforts to promote the country’s palm oil industry.
According to the Biofuelwatch report, Neste relies heavily on palm oil – both crude palm oil and an extract called palm fatty acid distillate (PFAD) – which the company says is guaranteed to be ‘sustainable’ and ‘deforestation-free’. The claim is disputed by the NGO, which also argues the 100% sustainability RSPO certification applies only to crude palm oil and not to PFAD, which it says Neste classifies as ‘wastes and residues’.
However, says Biofuelwatch, the UK government does not allow PFAD to be classified as a residue for biofuel purposes and Sweden, Finland and Norway also state that PFAD should not be counted towards renewable energy targets as a waste or residue. The report says Neste does not disclose what proportion of PFAD is in its products and says Neste’s description of PFAD as a residue is misleading. PFAD is treated as a food-based biofuel under legislation in several European countries, it adds.
A PFAD page on the Neste website, on the other hand, says annual production of PFAD is around 2.5 million tonnes, or about 4-5% of the total after refining of palm oil. It says PFAD fully meets the EU Renewable Energy Directive criteria for processing residues and is recognised by many countries as a residue and accepted for use as a renewable raw material in biofuels production. In addition to biofuels, Neste says PFAD is used to produce, for example, candles, soaps, other oleochemical products and animal feed.
Neste is the world’s largest producer of hydrotreated vegetable oil (HVO) and the report says the company plans to start producing significant quantities of jet fuel from upgraded HVO, to the extent of producing more renewable jet fuel than all other providers combined in 2019. Biofuelwatch claims Neste has decided to locate its aviation biofuel production in Singapore – noting that the location was in the centre of the world’s largest palm oil producing region – rather than in its refineries in Porvoo, Finland or Rotterdam, the Netherlands.
Neste currently has a renewable products production capacity of 2.7 tons annually, with 1 million tons produced in Singapore, the same amount in Rotterdam and the rest in Porvoo. It is aiming to increase this capacity to 3 million tons by 2020 through eliminating production bottlenecks.
Last month, Neste announced it was making a significant €1.4 billion ($1.6bn) investment in increasing its overall production capacity in Singapore by up to 1.3 million tons per annum, bringing the total annual renewable product capacity close to 4.5 million tons in 2022, when it expects to start up the new production line.
“The investment will strengthen our competitive advantages which are based on the global optimisation of our production and waste and residue raw material usage,” commented Neste CEO Peter Vanacker at the time. “With our proprietary NEXBTL technology, renewable products can be refined flexibly from a wide variety of lower quality waste and residues while the end-products retain their high quality. We will leverage the experience gained at our existing sites in Singapore, Rotterdam and Porvoo, and thanks to our continuous process and technology development, the new production line will be the best in class worldwide.”
Almuth Ernsting of Biofuelwatch and author of the report said: “Neste’s investment in Singapore confirms our fears that aviation biofuels will rely on palm oil and therefore worsen deforestation and climate change. Far from guaranteeing transparency and sustainability, Neste continues to keep the amount of palm oil in its fuel a secret, it continues to source from regions with rampant rainforest destruction for palm oil, and it cannot even guarantee to keep palm oil from illegal plantations in a national park out of its supply chain.”
Last week, Neste announced it had been placed third on the Corporate Knights 2019 Global 100 Most Sustainable Corporations list and the number one ranked energy company in the world. It was also the only energy company to achieve a place among 126 companies in the annual CDP Climate Change ‘A List’ for its sustainability performance in 2017. The company noted its products had helped reduce global greenhouse gas emissions by 8.3 million tonnes that year.
In its statement responding to the Biofuelwatch report, the company said: “Neste is not using palm oil as a raw material for renewable aviation fuel. As stated consistently in previous communications, Neste utilises a diverse portfolio of raw materials with an ever-expanding focus on waste and residue as sources of feedstock for our renewable products. Waste and residue fats and oils account for nearly 80% of the renewable raw materials we use annually. Our main R&D focus is on finding new, even lower quality wastes and residues. We are currently even exploring ways to start utilising liquefied waste plastic as raw material.
“Our announcement in December 2018 to invest in building additional production capacity at our Singapore refinery does not change our approach to raw materials; we will continue focusing on waste and residue raw materials. The project in Singapore will also include additional capacity to pre-treat waste and residue raw materials.
“We believe sustainable biofuels have a significant role to play in meeting ambitious climate goals, particularly in those segments of the transportation sector that are difficult to decarbonise, such as heavy transport, aviation and marine.
“We will review the Biofuel Watch report in depth.”
Meanwhile, news portal Free Malaysia Today reports that local airline and airport representatives met with Malaysia’s Minister for Primary Industries, Teresa Kok, to offer their support for a government campaign to promote Malaysian palm oil. The representatives from Malaysia Airports (MAHB), Malaysia Airlines, Malindo Airways and AirAsia said they would communicate the ‘Love MY Palm Oil’ campaign through digital screens, in-flight magazines, entertainment systems and product displays.
The campaign is a response to growing Western opposition, particularly in Europe, to importing palm oil for use in biofuels from the region over sustainability and deforestation fears. The EU is Malaysia’s third biggest palm oil customer, much of it imported to produce biofuels, but last April the European Parliament voted to ban the use of palm oil in all European biofuels by 2020. A subsequent compromise with EU member states allows for a complete phase out of transport biofuels produced from food or feed crops with high indirect land-use change (ILUC) risk by 2030.
The final agreed text of the Renewable Energy Directive (RED II) does not single out palm oil or particular crops. The agreement called for the European Commission to report by 1 February 2019 on the status of production expansion of relevant food and feed crops worldwide.