Neste Oil expects high standards of corporate responsibility from its biofuel raw material suppliers

Neste Oil Corporation   
Press Release
24 April, 2008 at 4.20 pm (EET)

A commitment to sustainable development is a prerequisite to being a supplier of biofuel raw materials to Neste Oil, and the company actively supports efforts aimed at incorporating the principles of sustainable development into legislation and monitoring procedures covering all buyers and producers of organic raw materials. Neste Oil believes that the same rules and regulations should apply to all parties, regardless of where raw materials are produced or for what industry or what end-products they are used in.

Neste Oil currently produces its NExBTL renewable diesel at a plant in Porvoo, Finland. Raw materials include palm oil, rapeseed oil, and animal fat. A second NExBTL plant is under construction at Porvoo alongside the first one, and a third unit in Singapore.

Neste Oil knows its palm oil

The degree to which the palm oil can be considered sustainably produced has been the subject of some debate. Some 38 million t/a of palm oil were produced last year, of which food manufacturers used the great majority, around 80%, while Neste Oil used less than 0.2%.

Despite being a small user, Neste Oil has gone to extensive lengths to ensure that it knows more about where its palm oil comes from and how it is produced than any other user. Working with its supplier, Neste Oil has developed a monitoring system that ensures that its palm oil is separated from other palm oil from the field onwards. Neste Oil knows where the oil palms that produce its palm oil are grown, how they are cultivated, how the oil is extracted, and how it is transported all the way to its sites. Neste Oil and outside auditors check the monitoring system and the information that it generates on a regular basis to ensure its accuracy.

As its new NExBTL plants are completed and come on stream, Neste Oil will continue to aim to use as wide a range of inputs as possible and avoid being dependent on any single raw material.

Biofuels or fossil fuels?

The International Energy Agency (IEA) has estimated that the world’s energy consumption will grow by 50% by 2030, with around a fifth of this growth coming from traffic and transport. Mobility is essential for both people and goods in today’s world, for people in developing countries as much as anywhere else.

Given this growth in traffic and transport, the alternatives are either to continue using fossil fuels or to introduce innovatory new fuels. Adopting new, low-emission biofuels, and producing them in large volumes, will be essential to helping slow climate change.

Advanced biofuels that are produced sustainably have the potential to make an important contribution to reducing the environmental impact resulting from traffic and transport. Neste Oil’s NExBTL renewable diesel is one such product, and is capable of reducing greenhouse gas emissions, as calculated over the entire lifecycle of the product, by 40-60% compared to conventional fossil diesel fuel. Using NExBTL also helps improve overall air quality, as it generates less nitrogen oxide and particulate emissions as well.

Ongoing R&D

The bulk of Neste Oil’s current R&D effort is focused on developing new biofuel raw materials and making use of these non-food sources as soon as possible. Research is being carried out with over 20 universities and research institutions around the world, looking into a range of potential raw materials. Neste Oil has already tested jatropha oil, for example, and is developing ways of making use of forestry harvesting waste and algae.

The time required to develop and commercialize these raw materials, however, means that it will be some years before they become available. Up until then, vegetable oil and animal fat will continue to be the only alternatives for producing renewable diesel.

Neste Oil Corporation

Osmo Kammonen
Senior Vice President, Corporate Communications

Further information:
Deputy CEO and Executive Vice President, Renewable Fuels, Jarmo Honkamaa, tel. +358 (0)10 458 4758
Vice President, Renewable Fuels Simo Honkanen, tel. +358 (0)50 458 4170

Attachment:
Neste Oil’s Sustainable Development Principles

Neste Oil in brief

Neste Oil Corporation is a refining and marketing company concentrating on low-emission, high-quality traffic fuels. The company’s strategy is based on growing both its oil refining and premium-quality renewable diesel businesses. Neste Oil’s refineries are located in Porvoo and Naantali and have a combined crude oil refining capacity of approx. 260,000 barrels a day. The company had net sales of EUR 12,103 million in 2007 and employs around 5,100 people. Neste Oil’s share is listed on the Nordic Stock Exchange in Helsinki. www.nesteoil.com.

NExBTL in brief

NExBTL renewable diesel is an advanced fuel based on renewable raw materials that performs more efficiently and has a lower level of environmental impact than fossil diesel or FAME-type biodiesel. Neste Oil requires its raw material suppliers to observe a responsible approach to sustainability. Feedstock of this type ensures that NExBTL renewable diesel has a 40-60% lower level of greenhouse gas emissions over its entire lifecycle compared to fossil diesel. NExBTL renewable diesel can be blended with conventional diesel fuel or used as such, and is suitable for all diesel engines.