25 February 2024

GreenAir News

Reporting on aviation and the environment

Neste opens expanded Singapore refinery with 1Mt SAF capacity as government urges global collaboration

Renewable fuels producer Neste has officially opened its expanded refinery in Singapore, increasing annual production capacity to 2.6 million tons, of which up to 1 million will be sustainable aviation fuel. The company has also established an integrated SAF supply chain to enable blended fuel to be delivered to airlines at Singapore’s Changi International Airport. It has also conditionally agreed to acquire a minority shareholding in Changi Airport Fuel Hydrant Installation Company (CAFHI), the airport’s fuel storage and infrastructure joint venture. The Singapore government, which is developing the city state as a sustainable aviation hub, welcomed the Neste development as “a significant move”, but said it was insufficient to meet soaring demand for SAF. Transport Minister S Iswaran told an APAC Transport Minsters’ Meeting in Detroit on May 15 that Singapore was considering both incentives and mandates to increase demand and lower the cost of SAF, but warned ‘feedstock nationalism’, through which countries limited the supply of SAF ingredients, threatened to further constrain availability of the fuel.

Neste’s CEO and President, Matti Lehmus, said the €1.6 billion ($1.7bn) upgrade of the Singapore plant, completed in April and officially commissioned this week, was an important milestone in the company’s strategy to increase production of renewable fuels. “It’s a remarkable achievement given the complexity of the project, and that it was carried out during a global pandemic,” he said.

The development initially will increase Neste’s SAF production capacity up to 10-fold per year from 100,000 tons to as much as 1 million, with further expansion to 1.5 million tons by the end of this year when the company completes modifications of another refinery in Rotterdam, and 2.2 million tons in the first half of 2026 when further development of that plant is completed.

Sami Jauhiainen, acting EVP for Neste’s Renewable Aviation division, said neat SAF was produced at the refinery in Singapore’s Tuas region, then sent to a blending facility to be combined with conventional fuel and certified to meet jet fuel standards, before final delivery to airlines at Changi Airport. The company predominantly uses waste oils, fats and other residues to produce its SAF, but is exploring other feedstocks. As well as increasing production capability in Singapore, the upgrade will increase the Tuas plant’s raw material pre-treatment capacity, enabling it to process a broader range of waste and residue raw materials for conversion to sustainable fuels.

“Singapore is a leading aviation hub in the Asia-Pacific region,” said Jauhiainen. “In addition to being a global hub for Neste’s SAF production, we have established an integrated SAF supply chain to Changi Airport to make our product available to an increasing number of regional and international airlines.”

Subject to “fulfilment of customary closing conditions”, the supply chain expansion will include a minority shareholding by Neste in the CAFHI fuel storage and infrastructure joint venture in the airport.

Changi Airport is the latest in a global network through which Neste supplies blended product direct to airlines. Other locations include San Francisco and Los Angeles on the US west coast, and the European cities of Amsterdam and Neste’s corporate base, Helsinki. As well, to broaden distribution, Neste is supplying SAF to a range of fuel marketing companies outside its airports network, including in Japan and New Zealand, as it builds presence in the Asia-Pacific region.  

“Singapore has world-class logistics connectivity enabling efficient transportation of the renewable raw materials as well as final products globally,” added Lehmus. “Also, its world-class education supports the availability of future talents to be part of our production and commercial operations, as well as to enhance research and development in our recently-established Innovation Centre.”

The formal launch of Neste’s Singapore development project coincided with a speech by the country’s Transport Minister, S Iswaran, at the SAF Investment Summit, held as part of the APEC Transport Ministers’ Meeting in Detroit (see article). “There is generally a consensus that this is one of the areas which is going to yield maximum outcomes for us in the near term, in terms of reducing the carbon footprint of aviation,” he said. “The real question is the ‘how’.”

He highlighted supply chain initiatives, strengthening demand-side signals and stronger global collaboration as key areas of focus, adding: “It is quite clear that initiating things on a pilot scale is not a problem. Scaling, because of the cost, is the issue, and we need to deal with this.”

The Minister said Singapore considered it highly important to establish a scientifically-based process to validate the sustainability of feedstock, and alluded to the high availability but low global acceptance of palm oil in Asia. “Presently, the type of available feedstock differs across regions, and despite being recognised by ICAO’s CORSIA regime, some abundant feedstock in the Asia-Pacific region may not be as widely accepted in certain parts of the world, due to perceived higher environmental risks. This variation is understandable, but what we think is important is to establish a process that can validate this consistently.”

Iswaran said Singapore was working closely with Boeing, the Roundtable on Sustainable Biomaterials (RSB) and other stakeholders to assess how member countries of the Association of South East Asian Nations (ASEAN) could leverage potential feedstock supplies across the region to help produce SAF.

“To reduce logistical challenges and stabilise the cost of SAF, we must guard against feedstock nationalism,” he warned.  “Currently the Hydroprocessed Esters and Fatty Acids (HEFA) pathway is the most widely commercialised and viable SAF production option.” Without detailing specific examples, he added: “If the flow of biomass is restricted by countries, the supply of SAF will be further constrained.”

He urged governments to “catalyse investment into more nascent SAF production pathways and technologies” by supporting research and development of processes including alcohol-to-jet and power-to-liquid. “Establishing regional or global green financing networks can also enable us to tap into the growing green financing and carbon trading markets to drive R&D into SAF,” he said.

He reported the Civil Aviation Authority of Singapore was considering both incentives and mandates to drive up the use of SAF, as well as a ‘corporate buyers’ club’, designed to encourage early adopters of more sustainable air travel to act collectively, “thereby aggregating the demand, creating the scale and sending the signals that the industry needs.”  

Strong international collaboration was also essential to support SAF supply and demand initiatives, he said, adding: “One area is harmonising polices and mutually recognising a common set of standards and frameworks on SAF accounting and use. If we do not have that, then we really will have a patchwork of solutions around the world, and for airlines and industry players I think this is going to be a challenge.”

Top and below photos: Neste’s newly expanded refinery in Singapore

Below: Channel News Asia (CNA) report on the opening of the expanded refinery:

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