Neste says market for renewable diesel fuel moves to positive territory
Finland’s Neste Oil said it will boost output for renewable diesel fuel in the second half, predicting a healthy full-year output for 2013, amid expanding market demand.
“The market is exceptionally strong in Q3, especially in North America, but also in Europe,” said Chief Financial Officer Jyrki Maki-Kala. “We are expecting higher volume production in the second half of the year.”
Neste’s renewable diesel has a pricing advantage over its rival renewable fuels and demand is rising due to the biofuel mandate in the U.S., he said.
In August, the U.S. Environmental Protection Agency (EPA) finalized the volumes that will be required under the country’s Renewable Fuel Standard (RFS) program. The final 2013 overall volumes and standards require 16.55 billion gallons of renewable fuels to be blended into the U.S. fuel supply.
“They need to fill the mandate either through ethanol, bio or renewable diesel,” said Maki-Kala. “They can’t fill the mandate from ethanol because the demand is not growing in North America, so they need to use renewable diesel.”
Neste Oil reported total production of 15.4 million metric tons (MT) for 2012, up from 15.0 million MT for 2011. Renewable diesel fuel accounted for 1.8 million MT of that total in 2012, 1.5 times higher than the year-ago figure of 0.7 million MT.
The company has total renewable diesel fuel production capacity of 2 million MT against total global capacity of 2.7 million MT, from two plants in Singapore and Rotterdam, each with 800,000 MT annual capacity, and two production units in Finland, with each producing 190,000 MT per annum.