Singapore (Platts)--18May2009

It will still take 7-10 years before new feedstocks for biodiesel are
developed to commercial scale, even as biofuel producers look to diversify
their feedstock base away from vegetable oils, Simo Honkanen, Neste Oil's
senior vice president for sustainability said over the weekend.
The only industrial scale feedstocks that are available for biodiesel at
present are vegetable oils.
"Our view is that the new technologies will not only be a great potential
for sustainably produced industrial scale renewable energy but they are
necessary," Honkanen said in an email to Platts.
The Finnish refiner has more than 20 agreements on research collaboration
for new feedstocks such as algae and other type of microbes. For instance, it
has a joint venture with Finnish-Swedish pulp and paper manufacturer Stora
Enso to gasify wood residues and study the use of biomass and gasification
technologies to produce liquid fuels, he said.
On palm oil, Honkanen said it was very good feedstock when the production
was managed according to sustainable procedures.
Last week, forest campaigner Greenpeace said in a press statement that
Neste Oil had refused to provide any evidence of traceability in its entire
supply chain from the plantation to the refinery, and that it also failed to
provide any indication of where it intended to source future palm oil supply.
In his email response, Honkanen said: "We are in a process to negotiate
for future palm oil supplies with potential suppliers at the moment and
therefore the details are not even available."
He also cited global production of 40 million mt of palm oil in 2007,
with Neste consuming only 0.3% of that quantity, saying the company's
technology was not feedstock dependent.
"We can use almost any type of vegetable oil and animal fat based
feedstock in the production without any impact on the product quality," he
said. "Therefore we are screening, for instance, [the] global [rendered]
animal fat market. We are currently using also animal fat and some rape seed
in the production in Finland."
Neste Oil is building an 800,000 mt/year biodiesel plant in Singapore's
Tuas industrial zone, which it hopes to bring on stream by the end of 2010.
The company, which requires its suppliers to comply with the
sustainability criteria created by the Kuala Lumpur-based Roundtable on
Sustainable Palm Oil, said last year it would buy most of the palm oil
feedstock for its Singapore biodiesel plant from Malaysian plantation company
IOI Corp.
--Weilyn Loo, weilyn_loo@platts.com