A briefing published by the environmental NGO Biofuelwatch claims that Finland-headed oil refiner and renewable fuel producer Neste Oyj, poised to become the world’s largest producer of aviation biofuels in 2019, relies heavily on palm oil. Palm oil is a leading cause of rainforest destruction says Biofuelwatch, and still, Neste cannot guarantee that its palm oil is not sourced from illegal plantations inside a national park.
In December 2018, Neste announced that it was going ahead with previously announced plans to increase renewable product production capacity at its Singapore biorefinery. Worth approximately EUR 1.4 billion, the investment will extend Neste’s renewable product overall annual capacity in Singapore by up to 1.3 million tonnes, bringing the total renewable product production capacity for the company close to 4.5 million tonnes annually in 2022.
According to the briefing, “Neste: The Finnish company preparing to put palm oil in aircraft fuel tanks” published by Biofuelwatch, a non-profit organisation based in the UK and US, Neste used almost 700 000 tonnes of crude palm oil (CPO) in 2017 as well as an “undisclosed amount of crude palm oil which the company claims to be ‘wastes and residues’, contrary to legislation in several European countries.”
Furthermore, the briefing suggests that Neste “relies heavily on palm oil, a leading cause of rainforest destruction, and still cannot guarantee that its palm oil is not sourced from illegal plantations inside a national park” referring to a chain-of-custody investigative report by NGO Eyes on the Forest (EoF).
The EoF report found that 21 of the 22 palm oil mills implicated for sourcing fresh fruit bunches (FFB) from illegal plantations to be among the direct or indirect suppliers of many of the world’s key traders and users with zero deforestation commitments including Neste.
Biofuelwatch’s briefing suggests that the oil palm plantations and mills supplying Neste are concentrated in Indonesian and Malaysian provinces with “particularly high deforestation rates” linked to palm oil and that the Singapore expansion means that palm oil will be used by Neste to produce aviation biofuels.
Neste’s investment in Singapore confirms our fears that aviation biofuels will rely on palm oil and therefore worsen deforestation and climate change. Far from guaranteeing transparency and sustainability, Neste continues to keep the amount of palm oil in its fuel a secret, it continues to source from regions with rampant rainforest destruction for palm oil, and it cannot even guarantee to keep palm oil from illegal plantations in a national park out of its supply chain, said Almuth Ernsting, Biofuelwatch and author of the report.
Responding to the report, Neste issued a statement saying that it is “not using palm oil as a raw material for renewable aviation fuel” but utilises a diverse portfolio of raw materials with an ever-expanding focus on waste and residue as sources of feedstock.
As highlighted in its 2017 Annual Report, this portfolio includes palm derived residues such as palm fatty acid distillate (PFAD) and palm effluent sludge (PES).
Waste and residue fats and oils account for nearly 80 percent of the renewable raw materials we use annually. Our main R&D focus is on finding new, even lower quality wastes and residues. We are currently even exploring ways to start utilizing liquified waste plastic as raw material, the statement said.
Furthermore, the decision to invest in building additional production capacity at its Singapore refinery “does not change our approach to raw materials; we will continue focusing on waste and residue raw materials” and the Singapore project will also include an additional capacity to pre-treat waste and residue raw materials.