How has Neste developed its capacity in renewable diesel and sustainable aviation fuel over the years?
Neste began developing renewable diesel around 1997, with investments in production facilities starting in the mid-2000s in Porvoo (Finland), followed by Singapore and Rotterdam. Currently, Neste stands as the world's largest producer of renewable diesel, sustainable aviation fuel and renewable feedstock for polymers and chemicals. At the beginning of last year, Neste had a production capacity of approximately 3.3 million tons, which will increase toward 5.5 million tons in 2024. With ongoing expansions, particularly in Rotterdam, the capacity is projected to reach 6.8 million tons by the end of 2026.
In 2022, Neste's products enabled customers to achieve greenhouse gas savings of around 11 million tons, with an ambitious target to surpass 20 million tons each year by 2030. These figures underline Neste's commitment to creating a more sustainable world and de-fossilizing the chemical industry. The renewable molecules produced by Neste, primarily derived from waste and residues, can be utilized in the chemical industry, offering a pathway to reduce the reliance on fossil resources.
What differentiates Neste from other companies in the industry and from other companies you have worked for?
I was drawn to Neste's commitment to sustainability and its mission to create a healthier planet for future generations.
Neste's focus on helping customers reduce their greenhouse gas emissions sets it apart. This dedication is reflected in Neste's consistent recognition as one of the most sustainable companies globally, as evidenced by high rankings e.g. by CDP or Corporate Knights, among others.
How does Neste add value to sustainable solutions, particularly in the chemicals industry?
Neste is not only the largest producer of renewable diesel and sustainable aviation fuel but also pioneers in using these renewable molecules to produce plastics and other chemicals.The key advantage of our products is that they are almost identical to their fossil counterparts in terms of properties but have a significantly lower environmental impact. This means customers can reduce their carbon footprint without needing to modify engines, aircraft, trucks, or plastic manufacturing processes.
Why hasn't the sustainable solution offered by Neste been more widely adopted across the chemicals industry?
The primary obstacle to wider adoption of sustainable solutions like those offered by Neste is the low cost of fossil products. Despite the clear environmental benefits of renewable products in combating climate change, the external costs of using fossil products—such as increased temperatures, crop failures, and flood damage—are not reflected in their price. This discrepancy makes fossil-based products more appealing due to their lower cost. To address this, global regulation and alignment in industry KPIs towards sustainability are crucial, alongside incentives to shift towards more sustainable options.
How do you respond to the view that regulation, especially cross-state, hinders innovation in the US?
The assumption that regulations inherently prevent innovation is a misconception. From my perspective, regulations have, historically, actually driven innovation by mandating stricter emissions standards and safer environmental practices. While it's true that regulations can create cost disparities when not uniformly applied across regions, smart regulations, when thoughtfully implemented, can stimulate innovation. For example, the Inflation Reduction Act (IRA) in the United States has been a catalyst for innovation and growth. Hence, rather than stifling innovation, the right regulatory framework can indeed propel industries forward, contributing to both environmental sustainability and economic growth.
How can countries like the US adopt sustainable practices and innovation models from countries like Finland?
Looking at environmental regulations, for example, we see that stringent standards have led to significant advancements in reducing toxic emissions, benefiting both the environment and industries. The key is to design regulations that account for global competitiveness. Such regulations should not only aim to protect the environment but also drive innovation and economic growth. The Finnish model, which emphasizes sustainability and innovation, could serve as an inspiration for the US and other countries to adopt industry-supporting mechanisms, ultimately leading toward a healthier planet and a robust economy.
What are the challenges and misconceptions around decarbonizing the chemical industry?
Decarbonization in the context of the chemical industry often leads to misunderstandings, as the term suggests eliminating carbon, which is not feasible since carbon is a fundamental component of most chemicals or polymers. The focus should instead be on de-fossilizing the industry by shifting the carbon source from fossil to sustainable alternatives like renewable materials and, eventually, atmospheric carbon capture. This transition involves challenges such as cost, technological advancements, and the establishment of a circular economy where waste is seen as a valuable resource. Achieving a fully de-fossilized chemical industry requires a multifaceted approach, including both mechanical and chemical recycling, as well as innovation in feedstock sourcing.
What is the biggest hurdle in transitioning to a more sustainable chemical industry?
The primary obstacle in moving towards a more sustainable chemical industry is the cost competitiveness of fossil-based feedstocks. The low price of these materials discourages the shift to more expensive, sustainable alternatives. At the same time, a paradigm shift is needed, also when it comes to how we value and manage waste, treating it as a resource rather than discarding it. Regulatory interventions, such as deposit schemes for plastic bottles, have proven effective in dramatically reducing waste within short periods. Such measures, alongside a broader reevaluation of resource valuation and waste management practices, are crucial for encouraging recycling and supporting the transition to a sustainable chemical industry. By combining both recycling and renewable solutions, we can move the industry away from fossil resources and also combat plastic waste pollution.
What excites you about Neste's future, especially looking towards 2024 and beyond?
The urgency to address climate change and waste management issues means we cannot afford to wait for regulatory adjustments; immediate action is required. What excites me about Neste's future is our commitment to driving sustainable change, not just in words but through tangible actions and innovations. Our efforts to double renewables production capacity, lead in chemical recycling, and explore new avenues like power-to-X technologies, demonstrate our role as trailblazers in sustainability. I am particularly proud of our team's relentless pursuit of solutions that contribute to a sustainable future, reflecting our commitment to making a significant impact on the industry and the planet.
