Neste Corporation, News, 7 October 2019
The recent report “Destination Deforestation” by the Rainforest Foundation Norway raises some concerns that the Finnish government policies to promote biofuels in aviation could result in deforestation.
Neste is not using palm oil as a raw material for renewable aviation fuel. Neste utilises a diverse portfolio of raw materials with an ever expanding focus on waste and residue as sources of raw material for our renewable products.
70% of global palm oil production goes into the food industry. When oil palm fruit are handled, normal bruising occurs causing the fat in the fruit to start degrading. This is how free fatty acids are formed. They are undesired from the food production's perspective and need to be removed by distillation in the palm oil refining process before the oil meets the food industry’s quality standards.
Refining food grade palm oil yields approximately 3.5–5% of palm fatty acid distillate (PFAD) as a processing residue. The palm oil refiners are trying to prevent its creation as its value is lower than that of palm oil. Therefore, its use does not drive palm oil production or expansion of oil palm cultivation. Situation is similar with saw dust: nobody cuts down trees to produce sawdust. Instead, trees are harvested for logs that can be processed to planks at a saw mill. Saw dust is generated as an undesired residue, which however has value and can be used for useful purposes.
Neste does not accept deforestation or any other actions leading to biodiversity loss
Neste buys raw material, PFAD included, only from those suppliers that are committed to sustainable working practices and meeting strict sustainability criteria embedded in the regulation on biofuels. These criteria include a proactive approach to preventing deforestation and mitigating its risk. The PFAD that Neste uses is traceable to the point where it is removed from the main production stream at the palm oil refinery.
In 2017, Neste committed to go beyond this requirement. We set a public target to work towards mapping the food industry supply chains - from the end of which PFAD residue is sourced - to oil palm plantations by the end of 2020. This mapping and added transparency into the supply chain significantly surpasses the current regulatory requirement for residue raw materials to be traceable to the place of origin, in PFAD's case to the palm oil refinery. Working towards our 2020 target has required us to map large parts of previously unmapped food industry’s palm oil supply chains with good progress.
The Finnish government is not incentivising the use of PFAD. Instead, it treats all sustainably-produced biofuels equally. It has set a lower CO2 tax for fuels produced from waste and residues based on the fact that their greenhouse gas emissions accumulated over their life cycle are lower than those from virgin raw materials, such as vegetable oils. PFAD fully meets the EU RED definition of "processing residues":
By replacing fossil fuels in road transport and aviation with renewable alternatives we can cut greenhouse gas emissions immediately. Switching fossil diesel to waste and residue based renewable diesel reduces CO2 emissions from road transport by 90% on the average, while with renewable jet fuel the reduction could be as high as 80%.
The climate crisis is already happening. We need all available solutions to tackle it. With renewable materials we can reduce the consumption of fossil crude oil and thereby the emissions released into the atmosphere. Sustainably produced biofuels have a big role to play.