Finland’s Neste Oil said on Friday it would build the largest biodiesel plant in the world in Singapore, investing 550 million euros ($814 million). Neste said the plant would have a design capacity of 800,000 tonnes a year, and use mostly palm oil as its raw material, though it can use also other feedstock.
“The investment forms part of Neste Oil’s strategic goal of becoming the world’s leading renewable diesel producer,” the firm said in a statement.
“The use of biofuels … is predicted to increase rapidly in developed economies over the next few years.”
Biofuels, mainly produced from agricultural crops such as maize, sugarcane and vegetable oils, are seen by many as a way to cut emissions of greenhouse gases and to boost energy security at a time when oil output may be at or near its peak.
Neste started its first biodiesel plant, with an annual capacity of 170,000 tonnes, earlier this year in Finland and its second NExBTL biodiesel unit is scheduled to start operations in 2009.
Neste Oil said construction of the Singapore plant would begin in the first half of 2008, and the facility is scheduled to be completed by the end of 2010.
The biofuels sector has also faced growing public concern over whether they really help to reduce greenhouse gas emissions and whether they may have contributed to a sharp recent rise in food prices.
Neste said it committed itself to only using palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO) as soon as sufficient quantities were available.
Palm oil complying with the RSPO certification system, which was approved in November 2007, will probably be available from the early part of 2008 onwards, Neste said.