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Feedstock for Renewable Diesel -
Sustainability of the Production Chain and its
Verification
Biodiesel Congress, Beyond B5
27-29 July, 2011
São Paulo, Brazil
Tarja Myllymäki
Director, Product compliance
Tarja Myllymäki 2
Contents
• Neste Oil and HVO in brief
• Palm oil and other feedstock for renewable diesel
• Sustainability of the production chain and its verification
• Schemes for verifying sustainability
Tarja Myllymäki 3
Neste Oil in brief
• A refinery and marketing company concentrating on
delivering fuels for cleaner traffic
• Refining of 15 million tons of oil products per year
• Listed on the NASDAQ OMX Helsinki exchange
(stock symbol NES1V)
• Turnover of 11.9 billion euros in 2010
• Personnel 5,000
• State of Finland as primary owner (50.1% holding)
4
Biofuel legislation in Europe
•
Renewable Energy
Directive (RED)
Fuel Quality
Directive (FQD)
Identical
sustainability
criteria
• Renewable energy directive that came into
force in 2010 requires member states to
increase the energy content of transport fuels
from renewable raw materials to 10% by 2020.
• The use of biofuels should result in a clear
reduction of GHG emissions (compared to
fossil fuel) • 35 % savings from 2011 on
• 50 % savings from 2017 until 2020
• 60 % savings from 2018 on within those installations
that started production after Jan 1st, 2017)
• Technical specifications for fuel properties and
binding targets to reduce fuels’ greenhouse gas
emissions • The GHG emissions of gasoline, diesel and other fuels
should be reduced by 6% by 2020
Tarja Myllymäki 5
Neste Oil’s first biofuel is NExBTL renewable diesel,
a Hydrotreated Vegetable Oil (HVO)
NExBTL is a drop-in biofuel, i.e:
Same molecular structure as hydrocarbons
• Compatible with existing logistics
• Compatible with existing distribution systems
• Compatible with all engines & vehicle systems without any modifications
We are selling NExBTL as 10 % blend in Finland, Neste Greed Diesel
Tarja Myllymäki 6
HVO is fully compatible with fossil diesel
Technology Esteröinti
Esteri -
biodiesel
Biodiesel
FAME / RME HVO Fischer-Tropsch
Feedstock
End product
Biomassa Kasviöljyt
&
Eläinrasvat
Kaasutus &
Fischer-
Tropsch Vetykäsittel
y
Vegetable oils &
animal fats
(mainly
rapeseed oil)
Esterification
Ester-based
biodiesel
O
II
H3C-O-C-R
Flexible mix of
raw materials
(today:
vegetable oils &
animal fats)
Hydrogenation
Bio-based
hydrocarbon
CnH2n+2
Biomass
Gasification &
Fischer-Tropsch
Bio-based
hydrocarbon
CnH2n+2
Mineral Oil
Refining
Hydrocarbon
CnH2n
CnHn
CnH2n+2
Fossil diesel
Tarja Myllymäki 7
Photo:
Alliance for Synthetic Fuels in Europe
Regular
diesel NExBTL
The Burning Difference
8
NExBTL improves urban air quality vs. Fossil fuel
• Based on extensive research NExBTL
diesel contributes to a significant
reduction in exhaust emissions compared
to fossil diesel:
• Nitrogen oxide (NOx) 10% lower
• Particulates (PM) 28% lower
• Carbon monoxide (CO) 28% lower
• Hydrocarbons (HC) 50% lower
Emissions reduction figures are averages
based on numerous field and laboratory tests.
Tarja Myllymäki 9 9
NExBTL – next generation renewable diesel for
all modes of transport
Buses - public transport
Private cars
Heavy traffic
Aviation
Lufthansa started
commercial flights
15.7.2011
Can be used at
extremely cold
temperatures
Reduces
tailpipe
emissions
Performs
excellently at
100% content
Works perfectly
in trucks and
buses
Tarja Myllymäki 10
NExBTL Production sites
LOCATION CAPACITY INVESTMENT COMPLETED
1. Finland #1 190 000 tons € 100 million 2007
2. Finland #2 190 000 tons >€ 100 million 2009
3. Singapore 800 000 tons € 550 million 2010
4. Rotterdam 800 000 tons € 670 million 2011
Tarja Myllymäki 11
NExBTL renewable diesel can be produced without
blend requirements from a mix of vegetable oils and
waste animal fats, sourced via fully sustainable and
traceable methods
NExBTL Feedstock
Tarja Myllymäki 12
Current raw materials, sourced from fully
sustainable and traceable methods
Palm oil, stearin,
palm fatty acid distillate
(PFAD)
Waste animal fat in
the food industry Rapeseed oil
Tarja Myllymäki 13
Raw materials in the near future
Soybean oil Camelina oil Waste oil from the fish
processing industry Jatropha oil
Tarja Myllymäki 14
Long-term options for raw materials
Microbial oil Algae oil Biowax produced
from forest
harvesting waste
Tarja Myllymäki 15
Raw material development
Vegetable oils and
animal fat
E.g. by-products of oil
plants and fish oil
E.g. algae and microbial
oils, biomass and waste
streams
today < 5 years 5<x<15 years
• Neste Oil is working with over 20 research institutions around the world
• Production of NExBTL from microbial and algae oils is already possible
in a laboratory setting
Tarja Myllymäki 16
Neste Oil’s criteria for selecting new raw
materials • Applicability
• Features of sustainable development
• Carbon foot print (greenhouse gas emission balance)
• Water foot print
• Nutrients
• Land use
• Traceability
• Availability for industrial scale production
• Economical perspectives
17
Key sustainability criteria for fuel producers
contained in the EU Renewable Energy Directive
Land use Change
Traceability
Greenhouse Gas
Balance
Sustainability
Verification
Tarja Myllymäki 18 18
EU member states have three ways to verify
sustainable production
• National approval
• EU-approved voluntary system and
• Multilateral agreement with the EU
• Neste Oil has developed a voluntary scheme to show
renewable energy and fuel quality directive compliance.
• Will be verified by a third party (is already pre-
verified)
• Covers the entire supply chain - from procurement
through production to distribution
• Keeps up Neste Oil’s high operational standards and
adds the steps needed to verify regulatory
compliance
19
Example: Traceability of Neste Oil’s palm oil
supply chain
PLANTATIONS MILLS NESTE OIL’S
REFINERY HARBOUR
PALM OIL
REFINERY
CUSTOMER
AUTHORITY
Supplier
Crude Palm Oil (CPO)
PFAD
RBD stearin
Plantation - Mill
•Approved mills
(Appendix of the agreement
including name of plantation,
Previous land use, plantation history
and establishment year)
•Truck loading/discharging (FFB)
documents
Mill - (Refinery) - Harbour
•Summary of plantations of
origin for each barge
•Summary of discharging of barges
•History of shore tanks of harbour
Supplier - Neste Oil
•B/L
•Shoretanks measurement (+)
•CoC report (++)
•Certificate of quantity (+)
•Certification of quality (+)
•Certification of origin/T2L
•RSPO certificates
•Ullage report (+)
Neste Oil - Customer
•Customer specific reports
•B/L
•Shoretanks measurement (+)
•CoC report (++)
•Certificate of quantity (+)
•Certification of quality (+)
•Certification of origin/T2L
•RSPO certificates
•Ullage report (+)
Neste Oil - Authority
•Authority report
PFAD = Palm Fatty Acid Distillate
RBD stearin = Refined Bleached and Deodorized stearin
Neste Oil
Tarja Myllymäki 20
Greenhouse gas (GHG) emissions over the
entire lifecycle of the product
GHG emissions over the product life cycle
Fossil diesel
NExBTL from palm oil
NExBTL from rapeseed oil
NExBTL from animal fat
83.8
40.15
41.01
18.82
GHG emissions reduction
52%
51%
78%
Fossil diesel
NExBTL palm oil
3.3
32.09
0.8
2.89
8.6
5
0.17
0.17
70.93
0
GHG emissions in g CO2 eq/MJ
+ +
+ +
+
+ +
+
Tarja Myllymäki 21
First EU sustainability schemes for biofuels
get the go-ahead
On 19 July 2011, the EU Commission has recognised seven voluntary
schemes:
1. ISCC (International Sustainability and Carbon Certification)
2. Bonsucro EU
3. RTRS EU RED (Round Table on Responsible Soy EU RED)
4. RSB EU RED (Roundtable of Sustainable Biofuels EU RED)
5. 2BSvs (Biomass Biofuels voluntary scheme)
6. RSBA (Abengoa RED Bioenergy Sustainability Assurance)
7. Greenergy (Greenergy Brazilian Bioethanol verification programme)
This recognition applies directly in 27 EU Member States.
Tarja Myllymäki 22
EU: Voluntary Schemes approved on July 19th, 2011
Name Feedstocks Geographies Remarks
International Sustainability &
Carbon Certification (ISCC) All feedstocks All regions Neste Oil Porvoo and Singapore certified
Bonsucro Sugarcane All regions Not recognized for Article 17(3)(c) on
highly biodiverse grassland*
Roundtable on Responsible Soy
(RTRS) Soy non-EU
First certificates in 2011, Neste Oil is
member
Roundtable of Sustainable
Biofuels (RSB) All feedstocks All regions Neste Oil is member
2BS Verification System
(French system)
All feedstocks All regions Bureau Veritas led project
Abengoa "RED Bioenergy
Sustainability Assurance"
(RBSA)
All feedstocks All regions
Greenergy Brazilian Bioethanol
verification program Sugarcane Brazil
Not recognized for Article 17(3)(c) on
highly biodiverse grassland*
* this criterion is not yet defined by a Commission Decision Source: Commission
Tarja Myllymäki 23
Alternative ways to verify RED compliance:
Some existing national and voluntary schemes:
Scheme Operational status Compliance
Status
Notes
Neste Oil
voluntary
scheme
Has been used by Neste Oil for
several years
Under assessment by
the European
Commission
Expected to be
recognised by the
end of 2011
REDcert Running, several hundreds
rapeseed producers
Approved in Germany
Roundtable on
Sustainable
Palm Oil (RSPO)
Operational, several hundreds
certifications (vol > 3.5 Mtons)
No formal approvals Neste Oil
Porvoo/S’pore chains
certified
NTA 8080, Dutch
system
Running, five certification bodies
accredited, two certificates
issued
Approved in the
Netherlands
Dutch national
assessment protocol
for sustainability
schemes
Carbio*, biofuel
consortium in
Argentina
Two certification bodies
nominated, no data on
certifications
Approved in Argentina
Tarja Myllymäki 24
Summary
• NExBTL renewable diesel is a hydrotreated vegetable oil (HVO) and
it is available in commercial scale
• There is no blend wall for NExBTL – it can be blended in fossil
diesel at any ratio and used even as 100 % - B10, B20 is not a
problem!
• NExBTL improves urban air quality
• Neste Oil uses only fully traceable feedstock
• Neste Oil has registered its own voluntary scheme to the EU and
expects it to be recognised by the end of this year
Tarja Myllymäki 25
Sumário
• O gasóleo renovável NExBTL é um óleo vegetal tratado com
hidrogénio (HVO), um hidrocarboneto que corresponde à
composição química do gasóleo convencional
• NExBTL já esta disponível comercialmente
• NExBTL pode ser utilizado nos motores a gasóleo, a 100 % ou
misturado com gasóleo fóssil (0 – 100 %) – B10, B20 não é um
problema
• NExBTL melhora a qualidade de ar
• O esquema voluntario proposto por Neste Oil está sendo analisado
pela Comissão Europeia e espera ser reconhecido até final deste
ano
