(EnergyAsia, March 14 2011, Monday) — Brushing aside profitability concerns and controversy over the use of food palm oil for making fuel, Finland’s Neste Oil Corporation officially launched its 800,000-metric-tonne renewable diesel plant in Tuas at the industrial south-western part of Singapore last week.

The company said the 550-million-euro plant had started up last November after it was completed on-schedule. (US$1=0.72 euro).

Using proprietary technology, the company said the plant produces premium-quality NExBTL renewable diesel that outperforms both conventional biodiesel and fossil diesel, reducing greenhouse gas emissions by over 50% over the product’s entire life cycle when compared to fossil diesel. Its lower tailpipe emissions also make a valuable contribution to enhancing overall air quality.

Neste said NExBTL is suitable for all modern diesel engines without any modification as such or blended with fossil diesel, and is also fully compatible with existing distribution and logistical systems and requires no additional investments in this area. The bulk of the plant’s output will be exported to Europe and North America.

Palm oil will form up to half its feedstock while waste animal fat from Australia and New Zealand, and stearin, a palm byproduct, will each provide another 20-25%.

In the face of criticisms from Greenpeace and other environmental groups, the company has vigorously defended its use of palm oil by insisting that it only procures feedstock that is produced responsibly and sustainably.

Neste said the plant was recently certified by the International Sustainability & Carbon Certification (ISCC), confirming that the NExBTL renewable diesel produced at the refinery meets the European Union’s (EU) strict sustainability criteria and is suitable for the bio-content mandates of the German market.

The ISCC system is approved by the German Federal Office of Agriculture and Food (BLE). Neste Oil’s Porvoo refinery in Finland had already been ISCC-certified in November 2010.

Speaking at the opening ceremony, Neste President and CEO Matti Lievonen said:

“Although the ISCC certification is specific to the German market, it reinforces Neste Oil’s sustainability commitment and offers third party verification for the sustainability of our production chain and our NExBTL renewable diesel.”

Joko Arif, a Greenpeace campaigner, told EnergyAsia:

“Neste Oil’s new plant … is going to significantly increase the demand for palm oil putting further pressure on Southeast Asia’s and especialy Indonesia’s rainforests either directly (in terms of new supply) or indirectly by driving competition between land available to grow palm oil for food and palm oil for biofuels, thus leading to further palm oil expansion into rainforests and peatlands.

“By sourcing from Malaysia, does not mean that Neste Oil can run from the indirect deforestation that is happening in Indonesia and even in Africa because of the expansion of palm oil plantations.

“Despite our repeated requests, Neste Oil has not published information on its palm oil suppliers or location of the production areas. In the name of transparency we would urge them to do this as a matter of urgency.”

Mr Arif said Neste Oil is one of many large companies driving the clearance of rainforest for palm oil cultivation, and directlty or indirectly threatening rainforests and peatlands.

“In addition to threatening rainforests, using palm oil for biofuels also have significant implications for food security as biofuels significantly increase the competition between land available to grow palm oil for food and palm oil for biofuels.”

He said Greenpeace would continue to make clear that all companies involved in rainforest and peatland destruction need to clean up their acts and ensure they are not driving rainforest and peatland destruction directly or indirectly.

Deputy Prime Minister Teo opens plant.

Among the 200 industry members in attendance at the Neste Oil ceremony were guests-of-honour Teo Chee Hean, Singapore’s Deputy Prime Minister and Minister for Defence, Jyri Hakamies, Finnish Minister for Ownership Steering, and Neste senior executives including Matti Lehmus, executive vice president for oil products and renewables, and Petri Jokinen, managing director of Neste Oil Singapore Pte Ltd.

Mr Lievonen said: “Only two years ago we were here to lay the cornerstone of our renewable diesel plan. The rather empty piece of land has since been turned into the world’s biggest renewable diesel plant.

“As a location, Singapore has fulfilled all our expectations. It is the world’s third-largest center of oil refining, and occupies a central location in terms of product and feedstock flows as well as logistics. Talent pool in Singapore is absolutely first-class.

“The government of Singapore has played an important role in promoting Neste Oil’s investment, and the Singapore Economic Development Board has assisted Neste Oil at every stage of the project.”

The construction project required close to 14 million man-hours of work from employees and contractors from 13 countries. Over 300 km of piles were put into the ground to prepare the site for heavy structures, followed by more than 90 km of pipe work.

The facility employs approximately 120 people, the majority of which are from Singapore and the nearby countries.

Neste Oil, which expects to start up a similar-sized plant in Rotterdam in mid-2011, owns and operates two other renewable diesel plants in Porvoo with a combined capacity of 380,000 metric tons per year. With the Rotterdam plant, Neste Oil said it will have two million metric tons per year of renewable diesel capacity.

Listed on the Helsinki Stock Exchange, Neste is a refining and marketing company concentrating on low-emission, high-quality traffic fuels. It produces a comprehensive range of major petroleum products and is the world’s leading supplier of renewable diesel.