MOSCOW (MRC) -- Neste announced in March 2020 an intention to increase its renewable products production capacity in Europe, according to the company strategy, reported Hydrocarbonprocessing.
The company has now concluded a thorough study phase concerning the two possible locations, Porvoo, Finland and Rotterdam in the Netherlands. Neste has existing sites in both locations. While there are many positive drivers for both sites, the difference between the costs is significant in favor of Rotterdam.
“I appreciate the open dialogue we have had with the authorities both in Finland and in the Netherlands throughout the study phase. We have witnessed a constructive approach to find the best solutions to support our future growth”, says Peter Vanacker, President and CEO of Neste.
“Based on the thorough studies and calculations, the overall cost of the investment is significantly lower in Rotterdam. Our decision relies on ensuring our future competitiveness and our renewables’ growth strategy execution”, continues Vanacker.
The criteria for site selection include current markets and regulatory framework supporting market growth, raw material sourcing opportunities, investment and operating costs, infrastructure and low carbon utilities as well as local synergies and incentives.
The key aspects contributing to the overall cost difference are logistics costs, site-specific construction costs and availability of low-carbon hydrogen supply. Further, Porvoo site is more complex which leads to a higher execution risk level and longer construction schedule. Rotterdam, in turn, benefits from the proximity of new markets for Renewable Aviation and Renewable Polymers and Chemicals as well as proximity to raw material sources.
Neste aims at creating readiness for a final investment decision by the Board of Directors towards the end of 2021 or early 2022. In any case, the company is investing significantly in Finland, and to the Porvoo site, driven by the commitment to reach carbon neutral production by 2035. Further, Neste is accelerating its investments also into future technologies and raw materials. Finland is, and continues to be, the company’s Research, Development and Innovation hub.
As MRC informed previously, Neste has recently announced that it would acquire Bunge Loders Croklaan's refinery plant in Rotterdam, the Netherlands. The refinery plant is located next to Neste’s existing biorefinery and it consists of a pretreatment facility, tank farm, jetties and has a pipeline connection to Neste’s site. The acquisition has been approved by regulatory authorities, and the transaction has been completed on 1 March 2021. The transition of operations and employees will be implemented in phases with the refinery plant’s full and modified pretreatment capacity available for processing Neste’s feedstock by the end of 2024.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
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