Neste Oil to set up biodiesel joint venture in Austria
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The Finnish oil refining company Neste Oil has signed a letter of intent with the Austrian oil and gas company OMV for the construction of a new generation biodiesel production plant linked with OMV’s refinery in Schwechat.
The plant, based on biodiesel technology developed by Neste Oil, is to start up in late 2008 at the earliest. It could eventually produce 200,000 tonnes of diesel fuel from biological sources each year.
The ownership structure of the plant and the joint venture that will operate it have not yet been ironed out.
The final structure of the joint venture will also determine how the investment costs are to be divided between Neste and OMV. The division of the output will also be divided according to the ownership ratio.
The parties are also not disclosing the size of the investment that the installation will require. A similar plant, with an annual capacity for 170,000 tonnes of biodiesel, is being built at the Neste refinery in Porvoo, at a cost of EUR 100 million.
According to Jyrki Ignatius, the Neste Oil manager responsible for biological fuels, there is demand for the second-generation biological process being developed by the company; there are several projects under development that are similar to the planned joint venture with OMV.
The European Union is encouraging its member states to increase the use of biological fuels in transport to 5.75 percent by 2010.
The target is demanding: it would require investments for two million tonnes of biodiesel in this decade. The EU countries are making decisions at different speeds on proposals to increase the use of biological substances for fuel.
"In Austria, local legislation requires a rapid increase in the proportion of biological fuel, and OMV is a forerunner in the field. We are looking for a share in the rapidly-growing business, as no competing solutions are on the market yet", Ignatius says.
Nearly all known types of vegetable oils and animal fats can be used as raw materials for the new type of biodiesel. NExBTL diesel fuel, developed from fatty acids, can be added to fossil-fuel-based diesel as an additional component.
The first generation of biodiesel production, before the new technology developed by Neste, was based on a technology which is not suitable for all fatty acids.
Currently, most biological diesel production methods are based on rape-seed oil. The new fuel, which can be made from a wider variety of fatty acids, has proven to work better in cold weather, and to have fewer emissions.
Ignatius says that NExBTL works best in diesel engines as such, but under current conditions of production, the fairly expensive fuel is feasible for use only in special applications.
Under existing plans, the fuel produced at the Porvoo plant, which is to open next summer, is to be exported. However, Ignatius says that recent moves by the Finnish government to increase the use of biodiesel mean that there could also be a Finnish market for the output.
Helsingin Sanomat
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| 28.3.2006 - TODAY |
 Neste Oil to set up biodiesel joint venture in Austria
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