September 11, 2023 [Varo]- VARO Energy (“VARO”) today announces the construction of a large-scale Sustainable Aviation Fuel (SAF) manufacturing facility at the Gunvor Energy Rotterdam site, investing $600m with the aim of helping its airline customers decarbonise. This facility alone is expected to contribute up to 7% of the EU’s 2030 SAF target.
The 100% VARO-owned facility features a world-class pretreatment unit, guaranteeing renewable feedstock flexibility and production optimisation capability. The facility will have a total feedstock capacity of 350 kt p.a., with a SAF production capacity of 245 kt p.a. alongside a mixture of bio-naphtha and bio-propane.
Aviation is a vital part of the global economy, connecting people and businesses around the world. But the industry is also one of the fastest growing sources of greenhouse gas emissions. Through this investment VARO is supporting the aviation sector’s decarbonisation by manufacturing the SAF that airlines need to meet their targets. This is at the heart of the ‘Customer Lighthouses’ which have been established by VARO to support customers in the ‘hardest to abate’ industries, such as aviation, in their energy transition. The first of these was announced with Lufthansa and VARO in February.
Made from waste and renewable biomass sources, SAF is a viable and scalable low carbon solution for the aviation sector. This investment by VARO will provide more airline customers with access to SAF, which can be used in the current generation of aircraft and utilises the current fuelling infrastructure.
According to the IEA, European jet fuel demand is set to grow by more than 20% over the next five years. Located in Rotterdam at the centre of one of the world’s major aviation hubs, VARO’s new SAF manufacturing facility will be well positioned to meet this demand growth. As well as benefiting from close proximity to major markets the facility is also located alongside port infrastructure, wastewater treatment, as well as existing road, rail and pipelines, enabling SAF production and distribution.
Production is expected to commence by Q4 2026, enabling VARO to contribute to the significant growth in European SAF demand expected in the coming years. In a scenario of European SAF demand hitting 3.5 mt p.a., this manufacturing facility alone could provide up to 7% of the EU’s 2030 SAF mandated target of 5% by 2030.
SAF is part of VARO’s biofuels business, one of the company’s five strategic growth pillars under its ONE VARO Transformation strategy alongside biomethane and bio-LNG; hydrogen; e-mobility; and carbon removals. These five pillars play to VARO’s traditional strengths while offering some of the most attractive low carbon growth potential offered by the energy transition.
Dev Sanyal, CEO of VARO, said:
“The development of a large-scale SAF manufacturing facility in Rotterdam, at the centre of one of Europe’s most significant aviation hubs, is an important milestone in the development of the ONE VARO Transformation strategy. This $600 million investment strengthens our leading position in biofuels in Europe by adding SAF production to our portfolio of solutions and will provide our airline customers with an important route to decarbonization. With the potential to produce around 245 kt p.a. of SAF when it comes onstream in 2026, this new manufacturing facility alone will provide up to 7% of the EU’s 2030 SAF target. I would like to express my appreciation to Gunvor for the excellent cooperation and we look forward to working with them.”
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