December 22, 2023 [Reuters]- Finland’s Neste (NESTE.HE) said on Wednesday it plans to invest some 2.5 billion euros ($2.74 billion) to convert its Porvoo crude oil refinery into a biofuels production facility as it seeks to exit fossil fuel production over the long term.

Neste has grown rapidly in recent years after investing in making renewable fuels from waste and residue, as industries and transport operators worldwide seek to cut their emissions.

“The goal of our change programme is to create a globally significant production capacity for renewable and circular economy solutions, up to three million tons,” Neste CEO Matti Lehmus told Reuters.

In addition to fuels, Neste produces renewable polymers and chemicals from recycled plastic and other waste materials, which it calls circular solutions.

Neste said it aims to complete the conversion of its Finnish Porvoo refinery by the mid 2030s. It plans to increase its total renewables production capacity to 9.3 million metric tons by the this time, whereas previously it had targeted 6.8 million tons by the end of 2026, Lehmus said.

Around half of Porvoo’s planned renewables capacity, 1.5 million tons, is to be dedicated to sustainable aviation fuel (SAF) production, he added.

The International Air Transport Association (IATA) said earlier this month that global SAF volumes reached more than 600 million litres or 0.5 million tons in 2023, doubling from the year before, but called for more investments.

Neste, which already produces SAF in Porvoo, is ramping up production at its expanded Singapore refinery while also modifying its existing Rotterdam refinery in the Netherlands to start SAF production there in early 2024.

Lehmus said completing the programme will require more individual investment decisions.

The changes entail Porvoo’s annual output will drop from its current level of 12 million tons, of which 10 million tons were crude oil in 2022.

Lehmus said cutting output was necessary due to demand shifting from fossil fuels to renewables and that it would not mean reduced cashflow.

“We are talking specifically about a long-term change programme with which we will offer solutions that will be in demand,” he said.

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