Neste's biofuels business was seeded more than 20 years ago
In December 2018, our President and CEO Peter Vanacker wrote about Neste’s role in helping to tackle the climate change challenge. He framed his thoughts within the context of both the Special Report published by the Intergovernmental Panel on Climate Change and Neste’s own transformation.
“In line with our vision, we will continue working to increase our positive climate impact in the years to come as we introduce more bio-based and recycled feeds into Neste’s own production processes and products,” he stated.
In April 2019, we renewed our strategy and set new climate targets to reduce our customers’ GHG emissions with our renewable and circular solutions by at least 20 million tons CO2eq annually by 2030, and to reduce the carbon footprint of our own production ahead of EU’s climate and energy targets.
Independence from non-renewable raw material
It is worth noting that forward planning and high ambition level have been characteristics of Neste since our earliest days. In fact, in the editorial of Neste’s annual Environment, Health and Safety report published in 1998, we wrote:
"Climate change, the Kyoto convention and sustainable development are global issues which are difficult to reconcile with the use of non-renewable raw materials. The need for transportation and mobility is not going to diminish, but the types of fuels and energy used may change... Dependence on non-renewable raw materials should be reduced as expertise is gained and technology developed."
At the time, Neste and IVO had just merged into the energy company Fortum. The then head of oil refining Risto Rinne often discussed the importance of climate change and felt the company needed some kind of a bio-component in addition to “non-renewable raw materials”.
Neste's strong R&D filed a patent application for the hydrogen treatment technology (NEXBTL) as early as 1996. This renewable diesel patent rested idle over the turn of the millennium.
In 2004, the oil business was renamed Neste Oil after the demerger from Fortum. Led by Rinne as CEO, the company reformed its strategy. The board supported the bold strategy aiming for growth in the renewable fuel business.
This courageous strategy was implemented through rapid investment decisions. First, two smaller renewable diesel plants were built in Porvoo, Finland, then bigger ones in Singapore and Rotterdam. After some years, these new sites started to bear fruit.
Neste’s renewable products business provides two-thirds of the company’s financial profit
At present, Neste has its “bio-component” with which it has created a novel area for growth. In fact, Neste’s renewable products business provides two-thirds of the company’s financial profit. Neste is the world’s leading producer of renewable diesel as biofuels and electric vehicles appear to be the winning means to enable the transition towards more sustainable mobility.
The conclusion in our report text from two decades ago – “Dependence on non-renewable raw materials should be reduced as expertise is gained and technology developed” – remains valid, and most societies are working towards that goal.
Early awareness of climate change, together with a visionary view and durable management commitment, has proven to be an excellent business concept that creates value for Neste's stakeholders. We want to sustain this momentum.
We are working to broaden Neste’s end markets to aviation and polymers. Moreover, we want to become a solution provider for chemical recycling of plastic waste, expand Neste’s unique global feedstock platform, and continue our leadership in renewables production capacity.
Our aspirations are high and we will move faster and bolder to realize them.
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