- Mergers & Acquisitions
Neste acquires UCO collection and aggregation business in U.S.
Neste, the world’s leading producer of renewable diesel and sustainable aviation fuel produced from waste and residue raw materials, is acquiring Crimson Renewable Energy Holdings, LLC, a used cooking oil (UCO) collection and aggregation business in the United States.
The transaction includes shares in SeQuential Environmental Services, LLC, and Pure, LLC, as well as a UCO processing plant in Salem, Oregon.
The transaction is subject to the fulfillment of customary closing conditions and regulatory approval. Financial terms of the transaction were not disclosed.
“This acquisition further strengthens Neste’s presence and operations in the United States. We continue to execute our renewables growth strategy by expanding our renewable raw materials sourcing platform to the U.S. West Coast, which is also a location for our upcoming renewable diesel production joint operation in Martinez, California, and a key market for serving our customers. Together with Mahoney Environmental, this business will form a nationwide UCO collection and aggregation network,” says Matti Lehmus, president and CEO of Neste.
“I want to thank our SeQuential team for their invaluable efforts and contribution in building a leading UCO collection and aggregation business on the US West Coast. Joining Neste is a great opportunity for that team to develop its UCO business and operations further with a leading manufacturer of renewable fuels,” says Harry Simpson, president and CEO of Crimson Renewable Energy Holdings.
Through the transaction, Neste is acquiring a leading UCO collection and recycling business on the U.S. West Coast, covering the collection, logistics and storage of UCO in California, Oregon and Washington. Together with the previous acquisitions of Mahoney Environmental and Agri Trading in the United States, IH Demeter in the Netherlands, and Walco Foods in Ireland, the transaction continues to enhance Neste’s global raw materials sourcing platform and support Neste’s aim to serve the customers with the growing global need for renewable products.
Neste currently has a renewable products global production capacity of 3.3 million tons annually. Neste’s 50-50 joint venture for the production of renewable diesel with Marathon Petroleum, Martinez Renewables in Martinez, California, is expected to commence production in early 2023. Pretreatment capabilities are expected to come online in the second half of 2023, and upon completion, Martinez Renewables is expected to increase Neste’s renewable products capacity by slightly more than 1 million tons (365 million US gallons) per annum.
Neste’s ongoing Singapore refinery expansion project and Martinez Renewables will increase the total production capacity of renewable products to 5.5 million tons by the end of 2023. When completed, Neste’s Rotterdam refinery expansion project in the Netherlands will further increase the company’s total production capacity of renewable products to 6.8 million tons by the end of 2026.