Ensuring sustainability is central to Neste – company statement to correct and clarify some issues raised in the recent articles by The Guardian
Neste Corporation, News, 11 May 2022 (updated 12 May 2022)
As a response to the recent articles published by The Guardian on Neste’s collaboration with Coldplay and Neste’s renewable raw materials sourcing, we wish to provide more accurate information to correct and clarify the statements in the articles.
Neste is the leading producer of renewable diesel and sustainable aviation fuel, focused on waste and residues as raw materials when refining its renewable products. For the recent years, multiple types of waste and residue oils and fats have accounted for over 80% of our renewable raw material sourcing globally. In 2021, they accounted for 92%. Neste has developed a robust system to ensure its renewable products, and the raw materials it uses in its production, always meet the legal sustainability requirements set by local authorities in our markets. This includes that we always only use those renewable raw materials that are accepted in the local legislation.
One of the articles stated that “Neste declined to say what percentage of the jet fuel mix is made up by palm fatty acid distillates (PFADs)”. The claim is false as we had specifically communicated to the journalist that Neste MY Sustainable Aviation Fuel is only produced from used cooking oil and animal fat waste.
With regards to the article’s claim that Neste’s palm oil suppliers had been involved in significant deforestation between 2019 and 2020, we responded to these concerning claims in public already when they were first presented in 2020. Neste has a clear stand against any actions that would cause deforestation. We are committed to preventing deforestation in our own supply chains, and we require the same from all our raw material suppliers.
The claims on Neste's suppliers being linked to deforestation were, however, proven not to be true in lengthy investigations involving also satellite imaging and third party experts. We issued a follow-up statement in early 2021 after our investigations found no evidence to support allegations on serious sustainability violations within Neste's raw material supply chain. Although our investigations on these allegations have all been completed, we continue to monitor the palm oil industry players mentioned in the claims.
For our collaboration with Coldplay, conventional palm oil or other virgin vegetable oils were not used as raw materials for the supplied renewable fuels. As we transparently communicate on our website, we do use sustainably-produced vegetable oils, such as 100% certified and traceable palm oil to produce renewable products for specific markets according to their preferences. The share of conventional vegetable oils, including conventional palm oil, of Neste’s renewable raw materials inputs globally has, however, decreased significantly over the past decade; they accounted for approximately 8% in 2021. Neste plans to reduce the share of conventional palm oil to 0% of its global renewable raw material inputs by the end of 2023.
The articles criticize the use of used cooking oil and animal fat waste as raw materials for renewable fuels, yet we would like to highlight that during the climate crisis, replacing fossil resources with sustainably-sourced renewable and recycled raw materials is key to reducing greenhouse gas emissions and combating climate change. Both used cooking oil and animal fat waste are among the many legally approved waste and residue raw materials for biofuels production e.g. in Europe and not competing with food uses. Efficient utilization of wastes and residues, widely available via multiple sources around the world, is additionally one of the cornerstones of the circular economy. Producing high-quality products from waste and residue raw materials is an example of efficient use of resources. It also provides one of the key means to reduce the pressure to clear new areas of land for the cultivation or production of virgin raw materials for various uses. The shift towards renewable energy, renewable fuels included, contributes also to reducing reliance on fossil energy imports.
Animal fat waste is, indeed, waste. It comes as a result of the food industry's meat processing and is a widely available raw material due to the abundance of meat production around the world. Animal fat waste is derived from the material that is left over after the meat for food uses has been removed, and remaining waste is rendered to remove any pathogens.
Used cooking oil (UCO), on the other hand, consists of oils and fats that have been used by the food industry and restaurants to cook food for human consumption. UCO is no longer fit for human consumption for food hygiene reasons; hence it is collected for recycling and further use e.g. as raw material for renewable fuels. Neste sources UCO from collectors and aggregators in many different countries around the world, and has invested in a leading UCO collector and recycler Mahoney Environmental in the US, among others, to build a global waste and residue raw material platform that can keep pace with the world’s growing demand for renewable products. To sell something else as UCO e.g. for the European biofuels industry – as the article seems to suggest – would be considered criminal activity, a fraud, hence such claims are always investigated thoroughly by authorities.
If such claims of fraud or any other sustainability violations or shortcomings would be related to Neste’s raw material supply chains, we always take all allegations on suspected sustainability violations and shortcomings seriously and investigate the cases, even when they are not directly related to our sourcing of raw materials but indirectly concern our suppliers, for example through their subsidiaries or owners. In the case of investigating credible serious allegations against our suppliers, we put all further purchases from those suppliers on hold. We transparently publish information about grievance cases (see our website: https://www.neste.com/sustainability/sustainable-supply-chain/renewable-raw-material-grievances) and our actions as soon as we have received sufficient information from the actors in our supply chain. We also actively monitor events outside our own supply chain and strive to support remediation measures.
In case we learn about shortcomings in our renewable raw material supply chains, engagement and cooperation with the supplier is our primary way of action: we believe they provide the most efficient means to resolve any problems. If the investigations reveal that the sustainability criteria and requirements included in our contracts with our suppliers have been verifiably breached and the nature of these is considered serious and progress to resolve those issues is not made in a reasonable time, we can terminate our contract with the supplier in question – which we have done in the past. More details on how we aim to ensure sustainability can be found on our website: https://www.neste.com/sustainability/sustainable-supply-chain
It is a good thing that there are multiple uses for various wastes and residues and they have a value. During the climate crisis, it is important that such waste and residue materials can be turned into biofuels to effectively combat e.g. road transport and aviation sector emissions. Neste’s renewable fuels can provide as much as 75% to 95% reduced greenhouse gas emissions when all emissions over the entire life cycle of the fuel – including those related to raw materials and all logistics – are compared with fossil fuels and calculated according to the methodologies provided by relevant legislations (such as EU Renewable Energy Directive II 2018/2001/EU in Europe and US California LCFS in the US).
In addition to requiring specific, verifiable and significant greenhouse gas emission reductions above 50% compared to fossil fuels over the life cycle of the fuel, the European legislation for biofuels, i.e. EU Renewable Energy Directive II 2018/2001/EU, contains also other strict sustainability criteria that must be verifiably met before the fuel can be sold in the European market as a renewable fuel. The Directive, for example, requires the biofuel producers to source raw materials only from traceable sources and prohibits the use of raw materials from cultivation sites that have been established by clearing natural forests or other land with high biodiversity value after 2008. This helps mitigate the deforestation risk but also protects the habitats of endangered species.
All Neste-produced renewable fuels fully comply with all the sustainability criteria mentioned. If all sectors applied sustainability requirements to their raw material sourcing similar to those in the biofuels industry, there would be no deforestation associated with the sourcing of raw materials.
We very much agree with the statement that alternative fuels are only part of the solution to tackling transport-related emissions. While society needs to reduce any unnecessary travelling and harness electrification efficiently, we also need to reduce emissions with all available solutions while continuing to develop new, future solutions, such as those based on power-to-X technologies, which also Neste is active in. Alternative fuels, such as those produced by Neste are, however, a solution with which we can decrease emissions and simultaneously reduce our reliance on fossil fuels already today. It is very important to make such a positive impact and scale up all existing solutions as quickly as possible. We are hoping that good partnerships can encourage others to take action to move towards more sustainable practices. We also wish that those that are brave enough to pioneer such sustainability improvements, such Coldplay, should be encouraged in their efforts.
Ensuring sustainability is central to Neste. Similarly to Coldplay, we acknowledge that sustainability is a journey; hence, we welcome constructive dialogue and suggestions for further improvements as we aim to continuously improve our sustainability performance. Neste’s efforts to continuously improve have been recognized with Neste’s inclusion in the Dow Jones Sustainability Indices for 15 consecutive years, while in the Corporate Knights 100 most sustainable companies for 16 consecutive years, within which we are ranked as the most sustainable company in our sector. Neste has also disclosed its climate change prevention measures over the past 15 years in CDP; in 2021, Neste reached a Leadership level in CDP's Climate Change assessment, and we have achieved a Leadership level (A or A-) for five consecutive years since the current assessment system was introduced in 2016.
We are very sorry to see Coldplay, one of the forerunners of their industry, criticized for their concrete actions towards reducing their touring-related carbon emissions. We had detailed discussions with Coldplay and their sustainability experts prior to entering into this partnership, also related to some of the cases now referred to in The Guardian articles. We remain humbled and grateful for Coldplay’s trust in Neste as a partner in making their world tour more sustainable. We remain committed to ensuring that our operations and our sustainability performance remain worthy of all our customers and stakeholders' trust. We also remain very focused on our sustainability journey, always aiming to improve our performance, while helping our customers and partners to do the same.
Neste in brief
Neste (NESTE, Nasdaq Helsinki) creates solutions for combating climate change and accelerating a shift to a circular economy. We refine waste, residues and innovative raw materials into renewable fuels and sustainable feedstock for plastics and other materials. We are the world’s leading producer of sustainable aviation fuel and renewable diesel and developing chemical recycling to combat the plastic waste challenge. We aim at helping customers to reduce their greenhouse gas emissions with our renewable and circular solutions by at least 20 million tons annually by 2030. Our ambition is to make the Porvoo oil refinery in Finland the most sustainable refinery in Europe by 2030. We are introducing renewable and recycled raw materials such as liquefied waste plastic as refinery raw materials. We have committed to reaching carbon-neutral production by 2035, and we will reduce the carbon emission intensity of sold products by 50% by 2040. We also have set high standards for biodiversity, human rights and supply chain. We have consistently been included in the Dow Jones Sustainability Indices and the Global 100 list of the world’s most sustainable companies. In 2021, Neste's revenue stood at EUR 15.1 billion. Read more: neste.com