Neste Oil’s move to fats feedstocks may tighten EU oleochemicals

19 October 2011 21:10  [Source: ICIS news]

VIENNA (ICIS)--Finland-based Neste Oil’s use of fats and oils as biodiesel feedstocks in Europe could soon tighten oleochemical feedstock supply such as tallow, an official with major European oleochemical producer Oleon said on Wednesday.

Neste’s renewable diesel technology can use any fats and oils for feedstock.  The company successfully started Europe’s largest renewable diesel plant in Rotterdam, the Netherlands, in September, with capacity of 800,000 tonnes/year.  

Neste Oil also produces renewable diesel at two plants in Porvoo, Finland, which came on stream in 2007 and 2009.  The two facilities have combined capacity of 380,000 tonnes/year.

All three plants have been using palm oil, palm stearin, palm oil fatty acid distillate and rapeseed oil for feedstock.

But Neste and other biodiesel producers are now knocking on animal renderers’ doors for potential use of animal fats as feedstock to take advantage of EU government credit incentives, said Eddy Feijen, marketing and sales director at Belgium-based Oleon.

Tallow, a key oleochemical feedstock in Europe, gets double tax benefits within the European Union, which makes it more attractive to biofuel producers, he said.

Feijen spoke at the ICIS 8th Global Oleochemicals conference.

“We know that European biofuel producers, not only Neste, have been shopping for animal fats for feedstock use, Feijen said.  “Unfortunately, we are seeing that this trend has already been impacting the fatty acid market in Europe.”

The premium for European tallow against oleochemical feedstock palm oil imported from southeast Asia has been widening for months, according to Oleon.

“This has placed European oleochemical producers at great disadvantage. The industry has been suffering for several months now,” added Feijen.

Neste Oil’s facilities in Europe can consume as much as 1.4m tonnes/year of fats and oils feedstock when operating at full capacity, according to Neste Oil data.

The oleochemical conference ends on Thursday.

By: Doris de Guzman
+1 713 525 2653

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