3 July, 2020
As a response to the recent public criticism focused on Neste’s usage of palm oil as a renewable raw material, we wish to clarify some of the issues that have arisen.
Biofuels remain one of the key means to reduce fossil oil use to combat the climate crisis. In Europe, all fuels sold as biofuels are required to provide at least 50% smaller greenhouse gas emission over the lifetime of the fuel than those resulting from fossil fuel use. This applies to all biofuels in Europe, no matter which raw materials are used.
Neste is a very responsible buyer of raw materials and uses approximately 10 different renewable raw materials each year. Instead of virgin vegetable oils, such as palm oil, Neste focuses on waste and residue raw materials and works towards increasing their share from the current 80% to 100% of all renewable raw material inputs by 2025. This means that the use of vegetable oils, palm oil included, would be replaced entirely by wastes and residues.
In recent years, Neste has continued to use also palm oil due to preferences in some markets. All of the palm oil we have used has been fully traceable to the plantation level since 2007, and 100% certified since 2013. In 2019, palm oil represented less than 20% of the company’s annual renewable raw material inputs.
The palm oil that we source provides a 69% greenhouse gas (GHG) reduction on the average when refined into Neste’s renewable diesel and when the fuel's emissions over its entire life cycle are compared to similar emissions from fossil diesel use (calculation method: Renewable Energy Directive, EU RED). Approximately 29% of the palm oil we sourced in 2019 came from mills where methane is captured or its formation is reduced with other methods.
We select our renewable raw material suppliers very carefully and all of our contracts with them include strict terms on sustainability. We also engage in proactive sustainability work to mitigate the risk of, for example deforestation and human and rights violations. Neste strictly follows all the applicable regulations in all our markets on biofuels and renewable raw materials.
We organize training and webinars for our suppliers on topical sustainability issues. This work has been recognized as having a positive impact beyond our own supply chains. We continuously develop our grievance process and address all suspected shortcomings linked to our supply chain once we become aware of them.
We acknowledge the fact that there are sustainability concerns linked to the palm oil industry. This is why we continuously monitor our supply chains with organizations specialized in various areas of sustainability, e.g. deforestation. We transparently publish data on our palm oil and PFAD supply chains on our website to enable other experts to help in this work.
We take all allegations on suspected sustainability violations and shortcomings seriously and investigate the cases, such as those mentioned in the recent Chain Reaction Research report. In the case of investigating credible serious allegations against our suppliers, we put all further purchases from those suppliers on hold, which has been done with the supplier identified in the Chain Reaction Research report.
Ensuring sustainability is central to Neste and we are committed to continuously improve our sustainability performance. We do not accept any sustainability violations in our own operations or within our supply chains.