The (almost) green fuels challenge - Trends-Tendances sur PC

The (almost) green fuels challenge – Trends-Tendances sur PC

Rotterdam will become an important hub for the production of renewable fuel for aviation, which will soon be mandatory to reduce emissions. A factory of the Finnish company Neste is positioned as the first player in this emerging market.

Looking at a map, the Neste renewable fuel plant in Rotterdam is located offshore in the Maasvlakte (Meuse plain), a formidable advance built in 1973 to extend the huge port that felt narrow in the land. It is in this lost corner, on hectares of sand, that hundreds of thousands of tonnes of used cooking oil and other waste are transformed into renewable diesel fuel in high catalysts within the largest European plant of this guy. A slow ballet of ships brings in the raw materials and recovers the fuel. No truck participates in the process.

Looking at a map, the Neste renewable fuel plant in Rotterdam is located offshore in the Maasvlakte (Meuse plain), a formidable advance built in 1973 to extend the huge port that felt narrow in the land. It is in this lost corner, on hectares of sand, that hundreds of thousands of tonnes of used cooking oil and other waste are transformed into renewable diesel fuel in high catalysts within the largest European plant of this guy. A slow ballet of ships brings in the raw materials and recovers the fuel. No truck participates in the process. By 2026, this plant will expand, almost doubling its capacity, to 2.7 million tons processed, in particular to produce renewable fuel for aviation, SAF (sustainable aviation fuel), which companies airlines will soon be pushed to incorporate into kerosene, to reduce emissions. A European directive, called ReFuelEU, being finalized this year, will require the incorporation of this sustainable fuel into aircraft refuellings. Enough to develop a still embryonic market. The directive, voted and amended by the European Parliament, provides for a gradual mixing of SAF in aircraft kerosene: 2% in 2025, 6% in 2030 and so on up to 85% in 2050. It is part of the measures to for the EU to achieve carbon neutrality in 2050 (Green Deal). “It’s good, even if we wanted more ambitious goals,” said Thorsten Lange, Neste’s vice president of renewable aircraft fuels. The gain in CO2 will be slow even if it can be improved with the new generations of planes which emit 10% to 15% less. The company will greatly increase the production capacity of this fuel. “It now reaches 100,000 tonnes per year, and will be multiplied by more than 10 over 15 months, to reach 1.5 million tonnes. And I’m only talking about Neste.” The share of the Finnish energy company is considerable. “We now produce 100,000 tons in a global market of 300,000 tons, continues Thorsten Lange. We will strengthen this position and probably reach 50%.” Competition is growing. The Rotterdam plant, which produces sustainable diesel, will have a flexible process, which allows varying the share dedicated to SAF aviation fuel or renewable diesel, as much of the production of the two fuels is common. For this brand new air market, Thorsten Lange imagines supplying it in particular through the CEPS pipeline network which runs through central Europe, and passes near the airports of Brussels, Frankfurt and Amsterdam. “Supplying one major airport per country could be enough,” he said. The mixing of renewable fuel and kerosene is done in Ghent. Neste scored a symbolic point by successfully completing a test flight of a regional aircraft, a twin-engine ATR, powered solely by renewable fuel, in Sweden last June. A historic first. Proof is finally made that it is possible to fly only with 100% biofuel, which, according to Neste, means reducing CO2 emissions by 80%, over the entire process, from production to use. “To consider commercial flights powered by 100% renewable fuel, it would take another 5 to 10 years of certification”, tempers Thorsten Lange. Neste is a Finnish oil company converted almost entirely into renewable fuels. It is undoubtedly the most advanced tanker in this mutation, according to Bloomberg Report. “We lost a lot of money at the start. Now it’s a profitable business,” explains Peter Zonneveld, vice-president Sales renewables Europe & APAC. The majority of revenue (15 billion euros in 2021) comes from the sale of renewable fuel, currently mainly used for road transport. Neste produces a renewable diesel that can be used in its pure state in a car or truck diesel engine. This is marketed in some Q8 pumps in Belgium. This is HVO fuel (hydrotreated vegetable oil) sold under the Neste MY brand. Biofuels are renewable alternatives to fossil fuels. According to their sources, they reduce CO2 emissions over the complete cycle from cultivation to their use in combustion engines, and this by up to 90%, Neste claims, referring to his Neste My. The European Commission encourages the use of these fuels to achieve zero carbon by 2050 (Green Deal) with a step of -55% by 2030 (Fit for 55 plan). For the automobile, the Commission is betting on electrification, imposing the sale of zero-emission vehicles from 2035. For heavy goods vehicles and many other means of transport, the path is less clear. The electric truck is not yet on the road, nor is the hydrogen one. Same thing for planes. They could fly on green hydrogen, but it will take more than 10 years to see the first commercial flights. In the meantime, renewable fuels are a directly usable solution to significantly reduce emissions. In road transport, a directive on renewable fuels imposes the dilution of fossil fuels with biofuel. In Belgium, diesel at the pump contains 7% biofuel (B7 fuel). The federal government has decided to transpose it in the Kingdom, with a threshold of 13.9% by 2030. A disappointment for Neste, a supplier in this market. The Netherlands, Spain and France are aiming for 28%, 28% and 15% respectively on the same horizon. The European Commission is finalizing a new directive which would increase this obligation to 29% for road transport. Without these obligations, the task of the sellers of Neste and its competitors would be very difficult. Renewable fuels are more expensive than petroleum-based ones. For My Neste diesel, a liter sells for around 3 euros in Belgium. For renewable fuel for aircraft, it’s worse: a tonne of SAF sells for three to five times more than jet fuel (see box). Local or national public authorities can also play a role, through calls for tenders for construction or mobility services. “In the Netherlands, this kind of incentive exists, explains Peter Zonneveld. The use of a renewable fuel can be part of a public tender.” Around 700 buses operate in the country on HVO fuel. Voluntary approaches are not excluded. On the side of heavy goods vehicles, the additional cost of HVA diesel seems prohibitive, but in the air, some airlines are taking initiatives. “Air France and KLM charge an additional 2 to 12 euros for flights departing from Paris and Amsterdam in order to finance the use of SAF fuel, assures Thorsten Lange. Lufhansa offers this option to its passengers.” He hopes that the companies will exceed the minimum quotas of the Refuel EU directive. Next to the price, another barrier to biofuel is the raw material. Many NGOs have attacked the use of palm and soybean oils, appreciated for their moderate cost. They can compete with food crops and promote deforestation, which is contradictory to sustainability objectives, since trees absorb CO2. The European Commission intends to discourage this type of source. In Belgium, the Minister for the Environment, Zakia Khattabi, wants to prohibit the sale of energies requiring palm oil or soya. Also, the transposition of the new directive on renewable fuels being adopted by the federal government provides for the prohibition of biofuels based on these oils. Neste preferred to avoid controversy by seeking to dispense with these disputed sources. The annual report speaks, for 2021, of a supply coming from 92% of waste and residues rather than from crops. The goal is to reach 100%. The group had relied on palm oil when it first entered the market. To do this, it had opened a factory in Singapore, close to the crops, but has converted in its various factories (Rotterdam, Singapore and Porvoo, in Finland) to the use of waste and residues. The waste and residues currently used are cooking oil and waste from animals (slaughterhouses), which cannot be used in food. Eventually, to keep up with demand, the race is on to find other truly sustainable raw materials, without potential competition with food crops, such as algae, forest waste or fallow crops. In the less near future, energy companies are also betting on e-fuels, fuels produced from hydrogen or captured CO2, with the argument that they would be zero emissions. They still remain a subject of research and development. “We are working on it. The pilot projects you hear about only produce a barrel or two a day,” explains Thorsten Lange. Neste hopes to produce it from 2026 or 2027. These fuels can, on paper, power aircraft engines or road vehicles, but at what cost? The EU Refuel Directive takes them into account and imposes a minimum share in the renewable fuel quota. In 2050, refueling an aircraft could contain 85% renewable fuel, including 50% e-fuels.

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