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Neste to build $814 mln Singapore biofuel plant

Finland’s Neste Oil said on Friday it would spend €550 million ($814 million) to build the world’s largest biodiesel plant in Singapore to meet the growing but controversial demand for biofuels.

The plant will have a design capacity of 800,000 tons a year, making it the largest facility producing diesel fuel from renewable feedstocks anywhere. The investment forms part of Neste Oil’s strategic goal of becoming the world’s leading renewable diesel producer. The use of biofuels made from crops such as maize, sugarcane and vegetable oils (NExBTL technology is the first commercial new-generation renewable diesel production process) is expected to rise rapidly in developed economies and is seen by many as a way to cut emissions of greenhouse gases and provide an alternative fuel source to crude oil, which has been pushing $100 a barrel this year.

The end-product, NExBTL Renewable Diesel, is a premium-quality fuel that outperforms conventional fossil diesel fuel and can be used as such in existing vehicles and be distributed in existing logistics systems. NExBTL Renewable Diesel is also a good performer in environmental terms. When produced from sustainable sourced raw materials, its total lifecycle greenhouse gas emissions are 40-60% less than those of conventional diesel fuel. In addition, NExBTL has lower tailpipe emissions, contributing to better air quality. The main raw material planned for the Singapore plant will be palm oil.

Neste Oil has committed itself to only using palm oil certified by the Roundtable on Sustainable Palm Oil as soon as sufficient quantities are available. Palm oil complying with the RSPO certification system, which was approved in November 2007, will probably be available from the early part of 2008 onwards. Some environmentalists, however, dispute the greenhouse gas emissions benefits of biofuels and are alarmed by deforestation to increase palm oil output and the effect on food prices of the additional demand.

Singapore is the world’s third-largest center of oil refining, and occupies a central location in terms of product and feedstock flows and logistics. This also gives Singapore excellent potential to develop into a center for Asian biofuel production. Singapore is a signatory to the Kyoto Protocol and has committed itself to reducing greenhouse gas emissions. The government of Singapore has played an important role in promoting Neste Oil’s investment, and the Singapore Economic Development Board (EDB) has assisted Neste Oil at every stage of the preparations for the project. The EDB will also support the investment through e.g. R&D support and assistance with recruiting and training personnel.

Construction of the Singapore plant will begin in the H1 of 2008, and the facility is due to be completed by the end of 2010. The plant will be built in the Tuas industrial zone in the southwest of the island, around 30 minutes from the centre of Singapore. The plant will be integrated into the area’s existing industrial infrastructure, and will make use of local site utilities and port and storage services. When operational, the plant will employ around 100 people. (oilvoice)